US Federal Govt wants private retirement assets?

[Fern]

Where to guys come up with this shit :biggrin:

The only scary thing is that some of you might actual believe your own ass dribble

Looks to me like they got it from the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) and the Department of Labor (DoL).

In public statements, EBSA has sounded a disingenuous alarm that employees "are increasingly responsible for assuring the adequacy of their retirement savings." Federal bureaucrats and politicians now feign concern that retirees not covered by defined benefit plans are put at undue risk because they receive their "retirement savings in a lump sum payment" which unjustly compels them to be "responsible for ensuring that their savings last throughout their retirement." The government is working diligently to rectify this wrong.

EBSA recommends government intervention "to enhance retirement security for employees," so it is considering an alternative program that facilitates "access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement."

In February, the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), in collaboration with the Department of Treasury, announced a "request for information" to study the Lifetime Income Options for Retirement Plans and asked "for ideas on how to help reduce the chances that workers will run out of funds during their retirement years."

Link to DoL RFI:

http://www.dol.gov/ebsa/newsroom/fslifetimeincomeoptions.html

There are two main points in the concerns they claim:

1. Forcing conversion of retirement assets into "Treasury Retirement Bonds" ("TRB"). "In the October 2008 hearings, it was proposed that these bonds pay a 3% interest rate".

Of course this would be highly attractive to the government because it gives it a huge funding source (use retirees instead of the Chinese gov.)

There are several ways to do this conversion: (1) force the conversion of existing retirement assets (I have a lot of trouble seeing this happen) (2) Modify existing tax laws on retirement plans to allow or require the funds be invested in TRB's (3) If annuities are required upon retirement (instead of the current lump-sum distribution) just mandate that the annuities are based upon TRB's. (All annuities are based upon an underlying asset. By requiring retirement account distributions to be invested in an TRB annuity retirement assets will be converted into TRB's.)

2. Forcing plan distributions to be invested in annuities. Boy, would the brokerage industry love this; annuities carry a high commission fee. And upon the death of the annuitant and surviver, any remaining funds revert back to the annuity company (or possibly the gov if some type of TRB annuity.)

Since we're only talking about Qualified Retirement Plans, and not all investment/stock accounts, the government could easily do this by changing the tax laws on Qualified Retirement Plans (401K's, IRA's etc).

BTW: These two agencies (EBSA and DoL) have a lot of power over Qualifed Retirement Plans. One might expect those rules to come from Congress via the tax code, but many rules are issued directly by these 2 agencies without passing through Congress.

I can not see any conversion being implemented abruptly, but can image it being done so incrementally. The requirement to invest in annuities could easily be done immediately.

It is true that almost no one is covered by Defined Benefit Plans anymore (Congress facilitated this with the creation of Defined Contribution Plans, so if it's a problem it's of their own making). Also, you are responsible for managing your assets in a plan or after retiring and rolling it over into an IRA (as most do). However, it's flat out insulting for the gov to claim that you are too stupid to manage your assets. Of course, if they fvck up again and create another '2007' they'll have fewer complaints about a crashing stock market since retirees wouldn't be it anymore (instead invested in TRB's). I.e., they may be looking for a way to insulate themselves from their own incompetence.

Fern

 

[BoberFett]

That whole article is speculation at best. Would I put it past congress? Not really. But wake me when they actually float a bill to do it, until then it's just fearmongering.

 

[Fern]

That whole article is speculation at best. Would I put it past congress? Not really. But wake me when they actually float a bill to do it, until then it's just fearmongering.

To be fair, I think it's more than mere speculation. These gov agencies have obviously been seriously exploring this for at least 2 years (and are continuing to do so). So, it's not like somebody is running wild after hearing an off-hand comment by a politician.

Normally, I agree with not getting worked up about something until it at least appears in a proposed bill. However, recently this Congress has shown a habit of passing bills which are unpublished and unread. This whole "We have to pass the bill so you know what's in it" crap means interested parties need to be far more proactive. I.e., make your opposition known when the idea first pops up.

Also, as I mention above, these two agencies could issue rules implementing this without ever passing through Congress.

Fern

 

[First]

^ Seriously Fern, you're beyond transparent. Why the hell would anyone not research something before proposing it in a bill? It makes no sense to be scared about people researching ideas. If they come to the conclusion that it's a bad idea (and it certainly looks like a terrible one based on the limited information we have), then it won't even be proposed in Congress. Hell, if it were proposed and got shot down by a 95%-5% majority, no one should really care all that much then either.

 

[First]

Also, as I mention above, these two agencies could issue rules implementing this without ever passing through Congress.

Fern

Huh? I missed this gem before. Please explain in detail which laws gives a gov't agency the ability to pass legislation without going through Congress. This should be funny.

 

[Nemesis 1]

To be fair, I think it's more than mere speculation. These gov agencies have obviously been seriously exploring this for at least 2 years (and are continuing to do so). So, it's not like somebody is running wild after hearing an off-hand comment by a politician.

Normally, I agree with not getting worked up about something until it at least appears in a proposed bill. However, recently this Congress has shown a habit of passing bills which are unpublished and unread. This whole "We have to pass the bill so you know what's in it" crap means interested parties need to be far more proactive. I.e., make your opposition known when the idea first pops up.

Also, as I mention above, these two agencies could issue rules implementing this without ever passing through Congress.

Fern

Good replies . But ya know what I don't want this government handling my wifes money. I see what they did with SS noway do I trust this government . I trust Russia more. If I was young I would move there.

 

[woolfe9999]

^ Seriously Fern, you're beyond transparent. Why the hell would anyone not research something before proposing it in a bill? It makes no sense to be scared about people researching ideas. If they come to the conclusion that it's a bad idea (and it certainly looks like a terrible one based on the limited information we have), then it won't even be proposed in Congress. Hell, if it were proposed and got shot down by a 95%-5% majority, no one should really care all that much then either.

Sorry Fern, but this article is total bunk. It is excremental. What you are discussing are possibilities for the federal government regulating retirement accounts in certain ways. That we could have an intelligent discussion about. What the article says is that the government will SEIZE our money and give us a pittance in return. It is fearmongering nonsense. Heck, it isn't even clear that the stuff you've cited is even close to being implemented. Is there even a pending bill?

- wolf

 

[Fern]

^ Seriously Fern, you're beyond transparent. Why the hell would anyone not research something before proposing it in a bill? It makes no sense to be scared about people researching ideas.

"Scared" is your term, and you appear to use it to be dismissive. I think I've adequately explained why concerned people should be voicing their opposition, as opposed to waiting.

If they come to the conclusion that it's a bad idea (and it certainly looks like a terrible one based on the limited information we have), then it won't even be proposed in Congress. Hell, if it were proposed and got shot down by a 95%-5% majority, no one should really care all that much then either.

Who is the "they" you are referring to?

Clearly, the EBSA and DoL think it's a good or they wouldn't be spending all this time over these past years exploring it.

Fern

 

[First]

"Scared" is your term, and you appear to use it to be dismissive. I think I've adequately explained why concerned people should be voicing their opposition, as opposed to waiting.

So far you've danced around the issue and claimed that gov't agencies can pass, um, laws without Congress' approval? When have the EBSA and DoL done so?

Who is the "they" you are referring to?

Clearly, the EBSA and DoL think it's a good or they wouldn't be spending all this time over these past years exploring it.

Fern

I can't help but laugh at someone who thinks he knows two gov't agencies love the ideas cited in the OP because they happen to be spending a lot of time researching them. Do you have any direct knowledge of the conclusions they've drawn or revisions they've made to the ridiculous assertions that the gov't will seize retirement funds in exchange for smaller ones? Anything, at all?

 

[Fern]

Huh? I missed this gem before. Please explain in detail which laws gives a gov't agency the ability to pass legislation without going through Congress. This should be funny.

I believe it was in the Employee Retirement Income Security Act of 1974 (ERISA).

There's nothing unusal, unique or even "funny" about government agencies effectively making new law via their ability to issue regulations.

FFS, the Obama Admin had been (or perhaps still is) publicly exploring using the EPA to effectively get cap-n-trade if Congress is unable to pass it.

Here's an example of the DoL issuing rules for retirement plans.
http://www.prudential.com/media/managed/Small_Cashout_Rollovers_PruPA.pdf

Using google you can find more easily.

I happen to be personally familiar with the DoL rule making ability because as a tax CPA I have been prevented from implementing some investment plans
for clients' IRA's, not because of rules in the tax code (passed by Congress)which permitted it btw, but because of rules issued by the DoL.

So far you've danced around the issue and claimed that gov't agencies can pass, um, laws without Congress' approval? When have the EBSA and DoL done so?

Really?

It's you who obviously have no idea, whatsoever, what you're talking about.

Nor have I "danced around" anything. You seem to need a better dose of reading comprehension.

Fern

 

[DaveSimmons]

Facts in the article:
House Democrats listened to an idea about replacing new contributions to 401ks with a "government-created guaranteed retirement accounts" for every worker:
http://money.usnews.com/money/blogs...8/10/23/would-obama-dems-kill-401k-plans.html

OP title:
OBAMA's A-COMIN' FOR MY FISHIN' POLE!!!!!

 

[Fern]

Sorry Fern, but this article is total bunk. It is excremental. What you are discussing are possibilities for the federal government regulating retirement accounts in certain ways.

What I'm demonstrating is how the government can rather easily implement the concerns the article raises.

That we could have an intelligent discussion about. What the article says is that the government will SEIZE our money and give us a pittance in return. It is fearmongering nonsense. Heck, it isn't even clear that the stuff you've cited is even close to being implemented. Is there even a pending bill?

- wolf

"Seize" may be a questionable term. But it is not entirely unreasonable. Forcing conversion of retirement plan assets into TRB, is quite simply the gov taking (seizing) your assets. The value of your assets is transfered to teh Treasury, is it not? The promise of them paying you an annual 3% on those assets (until your death) would be seen as a "pittance" by some/many. I certainly would feel so, if only because that 3% doesn't seem to be inflation adjusted.

I've already addressed the "pending bill" matter. As I said, since Congress has a new habit of passing unpublished and unread bills, waiting to see the proposal b4 complaining no longer applies, that paradigm no longer applies. It was only very recently that we were told by Pelosi that "We have to pass the bill so you know what's in it". So how can one reasonable rely upon waiting to see a proposed bill anymore?

Most of you act as though Congress would be passing a bill entitled "Seizure of Retirement Plan Assets". That's niave. Congress' SOP is to come at things 'sideways' with a stealth approach and mis-leading labels. And if Congress was gonna make some changes it will likely be buried in a 2,000 page bill.I recall tahthe 1099 reporting requirement changes were not made known until well after passageof the HC bill. And if anybody thinks that change isn't HUGE they don't what they're talking about. (Even the IRS was stunned and wants that reversed.)

Furthermore, as I have demonstrated above, these agencies holding the hearings have the ability to issue rules on retirement plans, therefor they could implement changes along these lines without the necessisity of a Congresssional bill.

I'm not predicting that these changes will, in whole or part, be made. But to claim that any concerns that changes along these lines might happen should be dismissed out-of-hand is unreasonable.

Fern

 

[DaveSimmons]

The Republicans might be planning to declare Sarah Palin President for Life if they take back power. It's unlikely, but we've seen in Argentina that a determined group can do something like this. Given the Patriot Act, any dissent could be labeled as terrorism and the objectors could be arrested.

It could happen.

 

[PeshakJang]

"government-created guaranteed retirement accounts"

Yeah... nothing could possibly go wrong with that.

 

[woolfe9999]

What I'm demonstrating is how the government can rather easily implement the concerns the article raises.



"Seize" may be a questionable term. But it is not entirely unreasonable. Forcing conversion of retirement plan assets into TRB, is quite simply the gov taking (seizing) your assets. The value of your assets is transfered to teh Treasury, is it not? The promise of them paying you an annual 3% on those assets (until your death) would be seen as a "pittance" by some/many. I certainly would feel so, if only because that 3% doesn't seem to be inflation adjusted.

I've already addressed the "pending bill" matter. As I said, since Congress has a new habit of passing unpublished and unread bills, waiting to see the proposal b4 complaining no longer applies, that paradigm no longer applies. It was only very recently that we were told by Pelosi that "We have to pass the bill so you know what's in it". So how can one reasonable rely upon waiting to see a proposed bill anymore?

Most of you act as though Congress would be passing a bill entitled "Seizure of Retirement Plan Assets". That's niave. Congress' SOP is to come at things 'sideways' with a stealth approach and mis-leading labels. And if Congress was gonna make some changes it will likely be buried in a 2,000 page bill.I recall tahthe 1099 reporting requirement changes were not made known until well after passageof the HC bill. And if anybody thinks that change isn't HUGE they don't what they're talking about. (Even the IRS was stunned and wants that reversed.)

Furthermore, as I have demonstrated above, these agencies holding the hearings have the ability to issue rules on retirement plans, therefor they could implement changes along these lines without the necessisity of a Congresssional bill.

I'm not predicting that these changes will, in whole or part, be made. But to claim that any concerns that changes along these lines might happen should be dismissed out-of-hand is unreasonable.

Fern

Keep trying to defend an article that says "socialist liberals" are going to "seize your retirement funds." That sort of tone is basically a disaqualfier for rational discussion so far as I'm concerned. All that stuff you posted up there in the thread? Nope, it's not in that article. The author it content to oversimplify and fearmonger the issue instead.

As to your predictions, we'll see. The trouble with these kinds of predictions is that if it comes true, you can come back and say, "see, I told you so" but if it doesn't, you're never proven wrong because it could always happen at some time in the future. For myself, I seriously doubt that even the scenario you lay out will happen, and I don't see something this major passing through by stealth if for no other reason that it would provoke debate between the two parties, and possible fillibuster.

- wolf

 

[bruceb]

It is my money. I earned it, invested it, saved it. It is mine to do what I see fit with it. I do not intend to "redistribute it to those in need" .. Nobody gave it to me.
And I agree, we will see a revolution again here in the USA .. just a matter of WHEN but I say, probably in the next 15 - 20 years at most.

 

[Fern]

I haven't made any predictions.

If slanted verbiage (unneccessary adjectives etc) disqualified articles alone, there'd be no need for for the Left to even bother to write. I haven't noticed a lot of dispassionate articles, eschewing unneccessary adjectives, from their side.

I doubt anybody (editor) would want to include the details I mentioned. Nobody wants to hear about ERISA etc, and they'd just "lose the forrest for the trees'. I don't think the point is how the government would go about possibly implementing these changes, but rather broadly what changes they are discussing and consdering.

Fern

 

[woolfe9999]

I haven't made any predictions.

If slanted verbiage (unneccessary adjectives etc) disqualified articles alone, there'd be no need for for the Left to even bother to write. I haven't noticed a lot of dispassionate articles, eschewing unneccessary adjectives, from their side.

I doubt anybody (editor) would want to include the details I mentioned. Nobody wants to hear about ERISA etc, and they'd just "lose the forrest for the trees'. I don't think the point is how the government would go about possibly implementing these changes, but rather broadly what changes they are discussing and consdering.

Fern

Slanted verbiage + lack of detail to support the over-simplified, slanted verbiage is a disqualifier, yes. Heavy handed conclusions require evidential support.

- wolf

 

[Darwin333]

The moment a bill that does this is brought up for a vote, millions of people will pull all of their money out of their retirement accounts and store it in overseas accounts. Who cares about a 10% penalty when you get to keep some of your money.

Nope, not how it would go down if they ever decided to do it.

It would go something like this:

1. Big market crash, peoples 401Ks are hosed.
2. .Gov offers to give people their pre-crash (or somewhere around) "value" if they voluntarily swap their 401Ks for the new .gov "guaranteed plan"
3. Massive amounts of people will jump in, especially considering the recent pain they remember combined with the pain of the crash that sets it off
4. .Gov profits


Any other way would bring the shotguns out and simply won't happen. Over the longer term they can use the tax code to move people out of 401Ks and into whatever else the .gov wants them too. However, I just don't see them taking the lions share of the "retail investor" out of the market unless they absolutely couldn't get the cash anywhere else. If you take the retail investor out of the market the banksters don't have anymore uneducated "bagholders" and the banksters own our government.

 

[Darwin333]

Huh? I missed this gem before. Please explain in detail which laws gives a gov't agency the ability to pass legislation without going through Congress. This should be funny.

Congress has already granted agencies of the Federal Government the ability to make and enforce "rules". The EPA regulating CO2 due to Congress's failure to pass cap and trade is a very recent example.

 

[piasabird]

A lot of people have their assets for retirement in an IRA and they buy and sell stocks to make it grow faster. So what kind of return you gonna get on a government retirement ponsie skeam???