(A) Democratization: Let everyone participate as individuals on a freshly equalized playing field that was previously so slanted they couldn't even try.
(B) Democratization: Encourage lots of small disorganized weaker players into the market as unwitting prey for existing interests that have already established themselves with regulatory or competitive edges that they retain/maintain indefinitely.
In this case I'm not focused on whether individuals can act wisely, but rather that such plans often means replacing an insurance policy with an investment account. Those two kinds of financial instruments have extremely different features, benefits, and risks!
So even if believe that's a great idea, be be suspicious of anybody who seems to be trying to hide that aspect of their plan from the public, since it means they're trying to get voters to make an uninformed choice.
Except it does. A soldier with a gun in your face can take your insurance payout just as easily as they can take your bank balance.
With respect to a kleptocracy, neither option protects you.
> take my money away from me
Ah, this is the place where you've confused an apple for an orange: The premiums collected for "destitute in a ditch" insurance is not "your money", because that's not how insurance works.
Similarly if you buy "house burns down" insurance and your house is fine until the day you sell it, then you get zero dollars back from the insurance company and nobody blinks an eye. Your payout is potential, conditional, and generally non-transferable, and that's normal, because an insurance policy is not an investment account.
There was never a discrete "your money" pile sitting around in the insurance-company vault waiting for you to reclaim it. (Well, aside from in the minds of criminals plotting insurance fraud.)
However, if you don't let smaller players into the market then they'll be fleeced using some other mechanism (for example, taxed and then handouts given to the wealthy). If access to markets is expensive then small players won't be able to save at all since any method that lets people invest exposes them to risk, and once risk is involved larger players will outmanouver smaller ones.
Damned if you do, damned if you don't but giving people easy access gives people the best shot at achieving prosperity.
Ultimately maybe only something market-based is realistic. Yet if we must do that then I'd prefer gov workers be forced to use the same system. Also 401Ks being born out of a carve out for executives feels like an awkward fit for regular employees. Perhaps a unified system not tied to employment could be the best of both worlds.
I've also heard things that sound like they tend to have sharp eligibility cutoffs or amount calculations. There aren't issues with a 401k if I keep changing employers every few years. And you can't play stupid games with taking lots of overtime for your final year to boost retirement benefits beyond what they "should" be.