When it comes to retirement, states are the innovators
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According to the preamble of the Republican Party’s platform, one of the basic tenants of the GOP is a belief that “…federalism…must be preserved un-compromised for future generations." In the preamble of the platform of the Democratic Party, there is an entire section labeled “Ensuring a Secure and Dignified Retirement”.

If these truly are foundational beliefs of both parties, why is Congress working to limit the ability of state governments to help their own citizens retire decently?

Recent actions in Congress to limit promising retirement savings initiatives by the states have made clear that many lawmakers apparently believe middle-class and working-class families have had it too good, for too long.


In Pennsylvania, 44 percent of workers between the ages of 18 to 64 do not have access to an employer-offered retirement plan. Nationally, 1 in 3 Americans do not have a single dollar saved for their retirement.

At this rate, the golden years of many workers will look more like scrap metal.

So states like Pennsylvania have been working hard, on a bipartisan basis, to find solutions that would give private sector employees a convenient and accessible retirement savings options. Auto-IRA plans, that would enable regular and automatic paycheck deductions for employees who do not choose to opt out of the program, are one potential option.

These plans, which do not require an employer contribution, simply give workers a convenient way to save their own money, and actually benefit, rather than burden, small businesses.

Solutions like this have been shown to dramatically increase retirement savings for workers. These programs have already been enacted successfully in states like California and Illinois, with others like Maryland, Washington, and New Jersey following looser models.

More than half of all 50 states are in some stage of enacting or exploring such new options. And different states are taking different paths — appropriate to our system in which the states are the laboratories of democracy.

Yet while these states experiment with innovative ways to help citizens retire with dignity, many in Congress are busy trying to make that innovation harder.

In 2016, the Department of Labor issued a rule that made it easier for these types of state-based solutions to be implemented.  

In 2017, hearing the non-existent cry of workers to have less access to solutions for retirement, many in Congress got right to work using the obscure powers of the Congressional Review Act to undo the rule.

The resolution to overturn the rule has already passed the House of Representatives, in record time and with little debate. While the Senate has not yet voted on overturning the rule, it appears poised to do so.

Let’s be clear: overturning the DOL rule would run counter everything both parties are supposed to stand for. For Democrats, portable retirement solutions like PA-IRA would help to protect vulnerable citizens, by making it easier for workers to save and avoid suffering from poverty in retirement. For Republicans, allowing states to experiment with policy options to assist their citizens — especially options that simply involve making it easier for workers to save their own money — are the very heart of what federalism is all about. It helps solve a problem without major involvement or investment from the federal government.

Republicans and Democrats alike should support these solutions because of what the state laws can do. By making it easier for workers to save their own money for retirement, states can reduce the need for expensive government programs to aid future retirees that end up living in poverty. Furthermore, little state money is needed to administer these programs, and workers have the ability to opt out anytime they choose.

State-level retirement solutions like portable IRAs have the potential to serve as a powerful force to financially empower workers. With the decline of traditional pensions in recent decades, a fresh approach is desperately needed to help millions of employees on the path toward saving for their retirement.

Due to the commonsense nature of these solutions, members of both parties should be clamoring to make it easier, not harder, for workers to provide themselves with a brighter future.

As for Congress? All we ask is that they stay out of the way.

Retired Ambassador Joe Torsella is the treasurer of the Commonwealth of Pennsylvania. A Rhodes Scholar and former president and CEO of the National Constitution Center in Philadelphia, Joe is executing an ambitious agenda of bringing a fresh approach to government through ethical, effective reforms to financially empower nearly 13 million Pennsylvanians.

The views expressed by contributors are their own and are not the views of The Hill.