THE FREE MARKET WORKS BEST WHEN YOU ELIMINATE PEOPLES' CHOICES:

Make Saving Easier (Ramesh Ponnuru, February 9. 2009, National Review)

Companies that have new employees participate in 401(k)s unless they opt out tend to have higher participation than companies that adopt the opposite default setting. Some companies have also boosted contribution rates by setting them to increase gradually over time — again, with opt-outs. But state regulations are an obstacle to these practices. Governors and state legislators should remove them.

Mark Iwry of the Brookings Institution and David John of the Heritage Foundation have proposed creating “automatic IRAs.” Businesses that do not want to administer 401(k) programs or match employee contributions to them could serve as a conduit for automatic paycheck deductions into tax-advantaged savings accounts. Employees would get some of the main benefits of a 401(k) without burdening businesses. (The proposal has been designed so that it will not prompt companies to drop their 401(k)s for the new program.)