In response to yet another misguided article that supports creation of government-sponsored retirement programs, NAIFA-NYS sent a strong letter to the New York Times editor on February 17, making clear that the alleged benefits of such government-created plans are illusive.  The letter is the latest NAIFA-NYS effort to illustrate the problems with these programs and to prevent creation of them in New York.

To the Editor:

One more time the New York Times gets wrong the issue of state-sponsored retirement plans. (“Who’d Want to Limit Retirement Plans,” Editorials, February 14, 2017). Instead of the reflexive posture of 1) assuming that government has the answer for all problems, 2) not assuming that government could actually be contributing to the problem of low retirement plan participation, and 3) criticizing the opposition to such plans simply because it comes from Republicans in the House, the Times would do well to dig deeper into the issue before rendering a blanket support for state-sponsored retirement plans.

The National Association of Insurance and Financial Advisors─New York State supports legislation recently introduced in Albany, which would create a task force to assess the need for a state-sponsored retirement plan in the context of financial products and services already in the market. The task force envisioned would determine such things as whether people will actually take advantage of it if created, the adverse effect upon the financial products market (which could hurt both advisers and customers of such products), and the possibility of aggregating too much retirement risk in the hands of too few investment managers.

Contrary to your assertion, there are some corners of Wall Street that would be delighted to get their hands on ‎large swaths of the working class’ retirement money through the political process. How naive are you to think that such programs would be instantly transparent just because they are blessed by the State?  It’s already difficult to assure true transparency for pension funds currently under government’s control, i.e. public pension funds.  And many of those funds have rightly been accused of cronyism for steering big pots of investment funds to politically connected managers.

Further, your notion that the small business market has been ignored by financial professionals is ludicrous. There are thousands of insurance agents and financial advisors who specialize in small business needs and, more importantly, the financial security needs of all those entrepreneurs and the employees who make those small businesses run.  Just maybe the problem is that after the myriad burdens upon these businesses, primarily from government mandates, there just is not enough money to fund retirement plans.

Not that the Times has ever thought to ask, but one answer to the retirement conundrum just might be in the relaxation of government regulation on investment products, and promotional tax policy to encourage the purchase of private market financial products along with resources for educating all citizens to become better financial product consumers.

“We are the government and we are here to help” may just not work in this case, and the House is right to make an issue here.

Lawrence Holzberg, LUTCF

NAIFA-NYS President