IRA Provider Insights

Will the President Trump State-Run IRAs?

Posted by Dana Sheehan on Dec 15, 2016 11:04:39 AM

Last week President-elect Donald Trump announced his pick for Secretary of Labor, fast-food executive Andrew Puzder. During the campaign, both Trump and Hillary Clinton stated they would support state-run IRA programs once in office. Does the appointment of Puzder change this?

"Andy will fight to make American workers safer and more prosperous by enforcing fair occupational safety standards and ensuring workers receive the benefits they deserve, and he will save small businesses from the crushing burdens of unnecessary regulations that are stunting job growth and suppressing wages."
- Donald Trump, in a statement announcing Puzder as Secretary of Labor

 

Donald Trump IRAs.pngOf course, we don’t have a crystal ball that will tell us what to expect from The Department of Labor under Puzder. We do, however, have some clues as to how Puzder may advise Trump’s position on state-run IRAs.

Puzder has long been an advocate for business growth. In the book Job Creation: How It Really Works and Why Government Doesn’t Understand It, which Puzder co-authored with David Newton, the authors argue, “Government's misguided attempts to orchestrate labor markets and the economy through higher taxes, increased regulatory requirements, and wealth distribution are antithetical to both job creation and American free enterprise,” (emphasis added) according to the description on Amazon.

Puzder further disagrees with a federal plan to increase minimum wage because it will hurt small businesses and hurts employees who would work better and rise higher under a salaried position. Similarly, he strongly opposes a recent joint employer doctrine that holds parent companies liable for franchises and contractors when employment laws are violated.

Another look at Amazon’s description of his book, “Centralized government planning and federal intrusion into the private sector have long track records of consistent failure.” His disagreement of these lies on the side of federal regulations, specifically those that hinder businesses rather than help them.

State-run IRA programs are intended to assist private sector businesses, and in many cases, smaller businesses that don’t already offer an IRA program (I recently finished a series on state-run IRAs that you can view in the archives). These programs are intended to minimize the labor required by small businesses in order to offer their employers a retirement option, and in most cases the only requirement is that they automatically deduct the specified amount from paychecks and submit it to their retirement account. Beyond setting up the accounts for new employees (after the initial set up for all employees at the beginning of the program), the program runs virtually automatically.

This implies that a state-run IRA would be supported by Puzder. By offering a retirement program, smaller business can become more competitive with larger businesses, and competition is essential for growth in a capitalist society. Then there’s the fact that state-run IRA programs are just that-state-run. They allow each state to determine the options that work best for them, instead of creating federal regulations. By keeping the IRA programs within the states, it keeps federal regulations leaner.

A leaner federal government is the goal of both Trump and Puzder, and with that in mind, the future for state-run IRAs looks to be positive.

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Topics: State Run IRAs, Payroll IRAs

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