While workers used to be able
to rely on Social Security to live on after retirement, those days are gone.
Last year, retired workers got, on average, just over $1,100 a month in
benefits. But many people don’t have retirement savings to supplement that
amount.
Senate Bill 437 would allow
the state to set up Voluntary Employee Retirement Accounts, or VERAs. This
program is designed to get more people saving for retirement, by giving workers
without an employer-sponsored retirement plan a way to automatically deduct
money from their paychecks.
The measure is supported by
groups as diverse as the AARP and the conservative Heritage Foundation, where
David John is a senior fellow.
“This is an especially
valuable bill because all it really does is to enable small employers, who
typically are not going to be able to find an easy way to have a payroll
deduction retirement savings plan, to essentially buy the retirement version of
group life insurance,” John said.
Right now, even those without
traditional pension or retirement accounts through their employer can go into a
bank and sign up for an IRA. But people aren’t doing that. Ted Boettner is the
Executive Director of the West Virginia Center on Budget and Policy, which also supports the bill.
He says half of West
Virginia’s
workers don’t have any retirement savings.
“In the state of West Virginia, too, you have small businesses--only about a quarter
of small businesses below 25 employees offer retirement pension programs to
their employees,” Boettner said. “So this would help bridge that gap. Because
we’re trying to get people to save more, to think ahead and to make sure
they’re not a drain on state resources later down the road.”
The program would be operated
by the state treasurer’s office, and would cost $1 million initially, but the
costs would be recouped by participation fees.
Committee Chairman Dan Foster
questioned why the Heritage Foundation supported a bill which is essentially a
program that would lead to further government involvement in the private
sector.
“This is an opportunity,”
John replied. “Because this program would be contracted out, it would actually
be managed by the private sector. What this does is to put us in a situation
where we don’t eventually have millions of Americans reaching retirement in
poverty and demanding yet another federal or state program to help make up the
difference.”
The one Republican on the
committee—Sen. Mike Hall (R-Putnam) voted in favor to move the bill, but it met
resistance from a Democrat. Sen. Michael Oliverio (D-Monongalia).
Despite testimony from Diane
Stout, the treasurer’s general counsel, who said that according to the bill, if
the program is not self-sufficient, it would terminate, Oliverio says he could
see the program placing a burden on the state.
“I’m always very sensitive to
what is the role of government, a lot of times people come to us with a
problem, and they want government to always solve the problem,” he said. “And
invariably that costs taxpayer dollars. This is a program that I think could
clearly be solved by the private sector. There are organizations that can
provide retirement plans for individuals, and I just don’t think that the state
of West Virginia should be involved in providing retirement plans for
employees that don’t work for the state.”
A number of bills were
introduced on Wednesday; among them one repeals a part of the state’s code that makes
adultery, fornication and co-habitation between an unmarried man and woman
illegal.
Sen. Doug Facemire
(D-Braxton) is the bill’s lead sponsor. He says the bill isn’t a morality
issue, but rather a case of a drastically outdated law that should be removed.
“For instance, there’s a law
on the books that says if you ride a horse through town and it drops manure in
the street and you don’t pick it up, you can be fined $5 and barred from riding
your horse in the town,” Facemire said. “And at one time that was probably a
very important law, but they’re outdated. And that’s what we’re trying to do
here, just clean up a bunch of the old laws that are outdated and don’t really serve
a purpose anymore.”
According to the code from
1931, the punishment for adultery and sex between unmarried people is twenty
dollars; for “lewd and lascivious
cohabitation,” the fine is fifty dollars and up to six months in jail.