I don't think I would trust the fiduciary responsibility of politicians in California and Oregon to handle my retirement savings.
Even if it's exactly the same as an IRA?
I stopped reading the article after a while, but I wasn't overly fond of it. These funds have a "low ER" of 1%, because they're managed funds. It was also vague on if you could choose the funds, or if you could later move the funds to a financial institution.
I don't think the state should be in the business of managing funds. I believe TSP (the for federal workers) offers mostly index funds, which is fine with me. They also allow you some choice.
Since it's auto-enrollment, putting it into something with 1% expense ratio seems like it could lead to cronyism. If it was put into a cash account or a standard low cost index, that would be fine with me.
I also don't understand how it is auto-enrolling. Is it adding a withholding from your paycheck?
The article goes into detail that there is a problem, but not what the proposed solution is.
In Iowa, the financial industry has proposed other retirement options that involve less government intervention. The state could, for example, set up a marketplace where workers could shop for lower-cost investment options.
I'm all for something like this, to me it sounds like the financial industry has the better position from the limited details I saw.