Star Tribune
Minnesota’s auto-IRA can help workers save for retirement even without employer plans
The standard advice when saving for retirement is: “Start early and save regularly” to harness the power of compound interest.
Yet many Americans have saved little for retirement, and that’s not because they’re financially illiterate. Instead, about half of the private-sector workforce works for companies that don’t offer a retirement savings plan. Few workers save without one, and that’s a major reason why about 30% of retired households solely rely on Social Security for income. The lack of access to an employer-sponsored retirement plan is concentrated among lower-wage workers without college degrees.
Several administrations of both parties have proposed initiatives to expand coverage nationally, but the efforts have gone nowhere. Frustrated at the lack of progress, eight states stepped into the breach and created auto-IRAs, and at least eight more states are in the wings, including Minnesota. The Secure Choice Retirement Program — Minnesota’s auto-IRA — should become effective next year.
The state auto-IRA plans share a similar model, although the details can differ. Employers without a retirement savings plan must auto-enroll employees in an IRA (often a Roth-IRA). Workers can opt out of it. There is no company match. The default after-tax contribution rate is 5%. The first $1,000 goes into a money-market fund. Contributions above that threshold invest into an age-based target date fund.
Will these state-sponsored plans make a difference? Yes, at least according to a paper presented at a recent retirement conference in Washington, D.C., by two economists from Boston College. They took the basic auto-IRA blueprint, made some assumptions and peered into the future. One baseline number: Median household assets in 401(k)s and the like at ages 51-56 are zero on average among employees with high school or less education. (The study offers projections for workers by education. I’m focusing on less-educated employees.)
They assume about one-third of this group will opt-out. Participants who cycle in and out of the program and use the money for emergencies will accumulate a median balance at ages 51-56 of more than $25,000. The same group would have almost $44,000 with no withdrawals. These modest sums are better than zero. Workers from this cohort who are continuously enrolled throughout their careers in the program accumulate sizable balances.
Making sure all workers have access to a retirement savings plan at work matters, especially early in their career so they can take advantage of compound interest.
Chris Farrell is senior economics contributor, “Marketplace”; and a commentator for Minnesota Public Radio.
Star Tribune
Man charged in shooting, armed standoff with police at south Minneapolis apartment building
A 40-year-old man was charged Thursday with three felony assault counts for allegedly shooting up his south Minneapolis apartment building last weekend, prompting a standoff with police before an officer shot and disarmed him.
According to the criminal complaint, Nathan Mellstrom Matz fired numerous shots with an AK-47 rifle sometime before 4:30 a.m. Saturday at the apartment building, in the 4000 block of Minnehaha Avenue in the Longfellow community. Several 911 calls summoned the police, who evacuated residents before finding Matz in a stairwell holding the rifle.
An officer gave Matz a minute and 20 seconds to drop the gun before firing a single shot at him. The suspect was taken by ambulance to the hospital, where he was expected to survive his wound. No one else was injured in the episode.
One resident told police he heard gunfire, stepped out in the hall and ran back into his apartment when he saw the gunman down the hall, who fired and nearly hit him. Another resident said he heard gunshots through his floor and found bullet holes there. A homeowner across the street said her house was hit by bullets and that she believed it was targeted during the shooting.
Matz is charged with three counts of second-degree assault with a dangerous weapon, but prosecutors may seek an aggravated sentence because, among other things, the shooting occurred in a densely populated area.
During the hearing, the Mille Lacs Band backed away from its original route and aligned with the Upper Sioux Community, which proposed an even longer route but also stated that it preferred the pipeline never be reopened.
The Yankton Sioux Tribe and the Flandreau Santee Sioux Tribe also opposed the project.
And on Thursday, Nina Berglund, a member of the Northern Cheyenne and Oglala Lakota tribes brought a sample of pipestone for the commission to see as they deliberated in a downtown St. Paul hearing room. She shed tears as the monument superintendent described the significance of the area.
“To have it be able to represent itself in a room where everyone’s talking about it and no one knows what it looks like,” Berglund said of the pipestone.
Nina Berglund, a member of the Northern Cheyenne and Oglala Lakota tribes and a Minneapolis resident, holds a piece of pipestone from Pipestone National Monument and a bunch of sage on her lap during a Minnesota Public Utilities Commission meeting at the Metro Square building in St. Paul, Minn. on Thursday, Sep. 12, 2024. The commission discussed options surrounding a permit for Magellan Pipeline Company to build a pipeline near Pipestone National Monument. ] ALEX KORMANN • alex.kormann@startribune.com (Alex Kormann/The Minnesota Star Tribune)
Brusven said granting a route permit would make it easier for Magellan to survey the route because they would be less reliant on landowners granting them access to look for items of cultural significance.
Tuma said if Magellan runs into anything, including catlinite, they would have to route the pipeline to avoid it. He drove the site personally as he researched the issue and was confident the ruling will bring a “thorough examination” of the route before construction.
The Hennepin County Attorney’s Office said Thursday that sheriff’s deputies were legally justified when they killed a man in Minnetonka during a shootout at his home.
Clint Lavelle Hoyhtya, 28, was shot multiple times during the firefight late in the morning of April 10 at a home in the 13400 block of E. Crestwood Drive. Two deputies at the scene were shot and survived their wounds.
Deputies were serving an arrest warrant when gunfire erupted. Hoyhtya died at the scene. Dispatch audio and a law enforcement source also confirmed that Hoyhtya was not the subject of Wednesday’s warrant.
County Attorney Mary Moriarty said that her office reviewed the state Bureau of Criminal Apprehension’s (BCA) investigation and office found no evidence of unlawful conduct by law enforcement during its encounter with Hoyhtya.
Two of the four deputies who shot at Hoyhtya were wounded during the firefight. Christopher Heihn was hit multiple times, was taken to HCMC for treatment and has since been released. Keith McNamara was treated at the scene after being hit by shrapnel.
Moriarty said her office determined that the deputies acted lawfully, initially retreating to find cover, calling for a negotiator and attempting to persuade Mr. Hoyhtya to stop shooting. She said the deputies exercised restraint and did not resort to deadly force until it became necessary, namely when Mr. Hoyhtya shot at them.
“In our review of the BCA’s investigation, we found no unlawful conduct by law enforcement,” a statement from Moriarty ready. “This was a terrifying incident that left [a sheriff’s] deputy hospitalized with a gunshot wound, endangered the lives of several other deputies and community members, and led to the death of Mr. Hoyhtya.”
