# Will the Government nationalize your 401k retirement account?



## Melensdad

Not sure if 'nationalize' is the correct term, seizure may be more accurate?

*Republicans Sound Alarm on Administration Plan to Seize 401(k)s*
by Connie Hair (more by this author)
Posted 05/04/2010 ET
Updated 05/04/2010 ET
http://www.humanevents.com/article.php?print=yes&id=36823

In February, the White House released its “Annual Report on the Middle Class” containing new regulations favored by Big Labor including a bailout of critically underfunded union pension plans through “retirement security” options.

*The radical solution most favored by Big Labor is the seizure of private 401(k) plans for government disbursement -- which lets them off the hook for their collapsing retirement scheme.*  And, of course, the Obama administration is eager to accommodate their buddies.

Vice President Joe Biden floated the idea, called “Guaranteed Retirement Accounts” (GRAs), in the February “Middle Class” report. 

In conjunction with the report’s release, the Obama administration jointly issued through the Departments of Labor and Treasury a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options” in the form of a notice to the public of proposed issuance of rules and regulations. (pdf)

House Republican Leader John Boehner (Ohio) and a group of House Republicans are mounting an effort to fight back. 

The American people have become painfully aware over the past year that elections sometimes have calamitous consequences.  Republicans lack the votes (for now) to reign in the Obama administration’s myriad nationalization plans for everything from health care to the automobile industry.

Now the backdoor bulls-eye is on your 401(k) plan and the trillions of dollars the government would control through seizure, regulation and federal disbursement of mandatory retirement accounts.

Boehner and the group are sounding the alarm, warning bureaucrats to keep their hands off of America’s private retirement plans. 

Just when you thought it was safe to come up for air after the government takeover of health care.

The entirety of the House GOP Savings Recovery Group letter outling the issue that was sent last night to the Labor and Treasury secretaries:

The Honorable Hilda L. Solis
Secretary
U.S. Department of Labor
200 Constitution Avenue, NW
Washington, DC  20210

The Honorable Timothy Geithner
Secretary
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW 
Washington, DC  20210

Dear Secretaries Solis and Geithner:

As members of the Republican Savings Solutions Group, we write today to express our strong opposition to any proposal to eliminate or federalize private-sector defined contribution pension plans, such as 401(k)s, or impose burdensome new requirements upon the businesses, large and small, who choose to offer these plans to their employees.

In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts, (GRAs)” which would provide for protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” -- presumably at taxpayer expense.  In the Report, the Vice President recommended “further study of these issues.”

The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary -- again, with a government subsidy.  These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen.  This despite data showing that 90 percent of households have a favorable opinion of the existing 401(k)/IRA system.

In light of these facts, we write today to express our opposition in the strongest terms to any effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or disfavor the private 401(k) system in favor of a government-run retirement security regime.

Similarly, and more recently, the Departments of Labor and Treasury have jointly issued a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options.”  While we appreciate the Departments’ seeking guidance and information from all parties and stakeholders in advance of regulatory activity, we strongly urge that the Departments not proceed with any regulation in this area before they have carefully and thoroughly considered all of the information received.

More specifically, we urge that the Departments take no action to mandate that plan sponsors -- often, small businesses -- include a “lifetime income” or “annuitization” option if they choose to offer a 401(k) plan to their employees, or that beneficiaries take some or all of their retirement savings in such an option.  Data shows that 70 percent of Americans oppose the concept of a mandated annuity or government payout of their 401(k) plan. On a more fundamental level, Congress should not be in the business of choosing “winners” and “losers” among retirement security stakeholders.  Instead, we urge the Departments to make it easier for employers to include retirement income solutions in their savings plans and to help workers learn more about the value of their retirement savings as a source of retirement income.  Finally, to the extent new mandates and bureaucratic red tape from Washington push small employers out of the business of offering these plans to their employees, we would submit such an effort weakens, rather than strengthens retirement security. 

We appreciate your consideration of our views in these important matters and stand ready to work with you and the Administration to promote secure and adequate retirement savings for all Americans. 

Sincerely,

House Republican Leader John Boehner (R-OH)
Rep. John Kline (R-MN) 
Rep. Dave Camp (R-MI) 
Rep. Sam Johnson (R-TX) 
Rep. Dean Heller (R-NV) 
Rep. Brett Guthrie (R-KY) 
Rep. Michele Bachmann (R-MN) 
Rep. Pat Tiberi (R-OH) 
Rep. Bob Latta (R-OH) 
Rep. Erik Paulsen (R-MN) 
Rep. Lynn Jenkins (R-KS) 
Rep. Ed Royce (R-CA) 
Rep. Buck McKeon (R-CA)​


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## XeVfTEUtaAqJHTqq

It's a really scary thought.  I mean really, really scary.  Where can a person put their money so that it is safe from the government?


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## mak2

No body's money is ever safe from the government.


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## XeVfTEUtaAqJHTqq

mak2 said:


> No body's money is ever safe from the government.



Sigh.  I guess you are right.


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## darroll

For about a year I have been trying to move my 401-K to a IRA.
They will not talk to my bank at all about this.
I was doing this because when you turn 70 ½ the government starts taking money out of it.
This crap is getting old.


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## Cowboy

PBinWA said:


> It's a really scary thought. I mean really, really scary. Where can a person put their money so that it is safe from the government?


 

In the ground  It may not make anything , But its damn sure safe


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## mak2

Money is not even safe in the ground.  The governemnt and the economy can  make all the money you can bury worthless (inflation).  Gold might retain some value, but you cant eat it.  no, money nor life for that matter is safe.  If it was it would be no fun.


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## darroll

When they first came out with this law companies did away with their own retirement plans. (most)
People that were not savvy in this new plan invested in woops stock and have nothing in their retirement account. Brokers took advantage of them.
I was against this 401 crap when it was started but it’s a little late now.
My company laid off hundreds of people when they ended the traditional retirement plans.
Another cluster Fck.


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## Doc

I don't understand what the heck it all means.  If they nationalize / seize the 401k's and I have 500k in mine ...will I still earn interest on it and get the full amount back ...or are the proposing to take a percentage of everyone 401k.  I know it sounds bad, but how they can even consider doing this baffles me.  They must be considering their elections already lost so they are saying screw em.


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## XeVfTEUtaAqJHTqq

Doc said:


> I don't understand what the heck it all means.  If they nationalize / seize the 401k's and I have 500k in mine ...will I still earn interest on it and get the full amount back ...or are the proposing to take a percentage of everyone 401k.  I know it sounds bad, but how they can even consider doing this baffles me.  They must be considering their elections already lost so they are saying screw em.




What it means is that instead of a Bank/Brokerage company having the actual funds you invested that the government will take that money, "honor" the commitment and then use the cash reserves to pay off debt.  Which of course works like a ponzi scheme.  You'll be fine if you die fairly soon but feel sorry for the people left to clean up the mess when the government piddles away that pile of cash.


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## tommu56

PBinWA said:


> It's a really scary thought.  I mean really, really scary.  Where can a person put their money so that it is safe from the government?



mattress

The RIO is low though

tom


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