Thursday, July 7, 2011

Another Do Good Government Intervention Does More Harm Than Good: Automatic 401(k) Enrollment Law Decreases Retirement Savings

From The Wall Street Journal, "401(k) Law Suppresses Saving for Retirement" by Anne Tergesen:
A 2006 law designed to boost employees' retirement-savings is having the opposite effect for some people.

Under the law, companies are allowed to automatically enroll workers in their 401(k) plans, rather than require employees to sign up on their own. The measure was intended to encourage more people to bulk up their retirement nest eggs—a key goal in a country where millions of people aren't saving enough.

But an analysis done for The Wall Street Journal shows about 40% of new hires at companies with automatic enrollments are socking away less money than they would if left to enroll voluntarily....
Read the complete article here.

The do-gooder control freaks who think they are wiser than the general public and who think they know what is best for everyone never learn that their push for legislative and regulatory mandates just about always creates more harm and negative consequences than the situation they are trying to fix.

What we need are not more mandates, but a way to prohibit do-gooders from imposing their will on the public under the guise of helping the defenseless irrational public.

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