By the way, here's something else that I believe we should count as a Bush
win, but in the longer run, it's a much bigger win for every worker in the
United States.
Try the news here (from The Washington Post):
Way Is Cleared for Default Enrollment
The gist of this news -- employees can be automatically enrolled in their
employer's 401(k) plans and be automatically set to put their money into any of
3 specific areas without the employer fearing legal liability. In the
past, employers were concerned that they could be sued for having invested their
employee's money poorly so many didn't auto-enroll their employees in their
401(k) plans and as a result many employees that could have been growing their
own retirement accounts weren't.
Another important change here is that the standard will be switching to one
where employees must OPT-OUT of auto-enrollment in 401(k) plans. Again, in
the past employees had to opt-in (partly because of fears of liability I
believe) and many didn't. They may not have understood the implications of
participating in or not participating in a 401(k) plan, or they may have felt
that they needed to keep more of their own money in their pocket now rather than
thinking about their longer term financial stability.
I'm glad to see these changes made. The more employees we have
participating in 401(k) plans the better. 401(k) plans have proven to be
an invaluable tool for retirement planning and too many employees have missed
opportunities to be setting aside money and having it grow at a pace several
times that of the meager returns that money that is collected for Social
Security does. Employees that invest just a few thousand dollars early in
their career, and continue to invest over time, benefit from compound interest
and growth in the prices of the stocks and other securities that they hold in
these plans. As more workers put more money into these plans, and have it
grow over their career, more people will have a real secure source of money in
their future, rather than relying upon the hopes that Congress will continue to
band-aid up the pyramid scheme that is known as Social Security.
I'm sure that there'll be bleeting from those on the liberal side of the
aisle that this could wind up leading to eventual privatization of Social
Security. One should only hope so. (And there might be bleeting
about the idea that employees are being forced into participating in 401(k)
plans against their will, but that would just show a mis-understanding of what
the principle of 'opt-out' really means...)
