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<p>A recent experience in the trenches of the retirement plan business reminded me of the roach motel ("You can check in, but you can't check out"). In this case, it had to do with the sticky wicket of a company that employed some illegal immigrants.</p><p>We performed our usual educational exercise of explaining to employees why a 401(k) was such a powerful way to accumulate value and gain a level of financial gratification. Later, in the individual meetings we had with employees, we learned that some had Social Security numbers that "might not work." What would happen if they deposited money into our plan?</p><p>What a conundrum. They could deposit the money with no problem, but when it came time for us to distribute the funds, we would have to report the distribution on a form that includes the Social Security number. If the form had the number for someone else, that person somewhere else in the country would be taxed on the money coming out of the plan.</p><p>Up until about 1998, this would not necessarily have become a problem. For example, one of our clients back in the '90's had become the poster child for the INS. The policy was to call the immigration office and have them run a check on every new hire to make sure that the Social Security number was valid.</p><p>At the same time, this company posted a sign on its front door in English and other languages saying that anyone without a valid Social Security number should not apply for work. The problem of undocumented workers was non-existent. We did their 401(k) plan's administration and can vouch for the fact that no distribution ever "went sideways."</p><p>In or about '98, a strange thing happened. The INS said to my client, "Don't call us anymore. We're through checking numbers." From syndicated columnist Cynthia Tucker, I now learn that this coincided with the efforts of Saxby Chambliss, the U.S. senator from Georgia who accused the INS at the time of using "bullying tactics." The "bullying" involved nothing more than applying a simple, cost-effective screening technique to enforce the law -- a law that still exists but with eviscerated enforcement.</p><p>Not surprisingly, the effective enforcement or "bullying" was adversely affecting the bottom line of some onion growers and other big business interests in Georgia. Chambliss, who was then a powerful congressman, was able to halt what was proving to be an effective enforcement procedure leveled against the people who really create the problem -- business owners that break the law.</p><p>In place of what existed as a system as simple as swiping a credit card at a supermarket, we are now spending billions on a fence and using National Guard troops to assist in the enforcement of our borders.</p><p>We are being sold down the river by legislators that really don't want to change anything that would annoy large contributors from the meat-packing and agricultural industries. Instead, they want to create the illusion of solving a problem by throwing money -- our money -- at an effort that will be expensive and futile.</p><p>Personally, I think the money would be better spent on the $600 million that it will cost to operate the technology that can scan containers for explosives coming into our ports. That was voted down recently because it would cost too much money.</p><p>If we won't raise taxes to pay for something this important, we should borrow the money. After a trillion spent in Iraq, what's another $600 million for protection here at home?</p><p>Meanwhile, back in the retirement plan arena, undocumented workers present real problems for major companies who hire them and have to operate retirement plans. What will happen to all that money at Fidelity and other financial institutions that major companies have deposited for undocumented workers who have used bogus Social Security numbers?</p><p>I don't know the answer, but I do know that we had a system that contributed to a solution, and it was gutted. We should recognize that fence for what it really is -- a smoke screen.</p>

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