Hidden in the wolf’s guise of compassionate concern, the Obamanation is now looking at how they can get their hands on your retirement savings. It is their affirmatively-graduated Ivy League opinion that we, the great unwashed masses, simply aren’t saving enough money to carry us through our retirements so the wishlist for the Secretary of Labor includes taking a look at how to regulate (read: force) retirees to convert portions of their 401k plans into annuities.
Here is the actual text:
Department of Labor (DOL)
Employee Benefits Security Administration ( EBSA ) RIN: 1210-AB33
Priority: Other Significant
Agenda Stage of Rulemaking: PreRule
Unfunded Mandates: Undetermined
CFR Citation: Not Yet Determined (To search for a specific CFR, visit the Code of Federal Regulations http://www.gpoaccess.gov/cfr/retrieve.html)
Legal Authority: 29 USC 1135; ERISA sec 505
Legal Deadline: None
Title: Lifetime Income Options for Participants and Beneficiaries in Retirement Plans
Abstract: This initiative will explore what steps, if any, that the Department could or should take, by regulation or otherwise, to enhance the retirement security of American workers by facilitating access to and use of lifetime income or income arrangements designed to provide a stream of income after retirement.
Statement of Need: With a continuing trend away from defined benefit plans to defined contribution plans, employees are not only increasingly responsible for the adequacy of their retirement savings, but also for ensuring that their savings last throughout their retirement. Employees may benefit from access to and use of lifetime income or other arrangements that will reduce the risk of running out of funds during the retirement years. However, both access to and use of such arrangements in defined contribution plans is limited. The Department, taking into consideration recommendations of the ERISA Advisory Council and others, intends to explore what steps, if any, it could or should take, by regulation or otherwise, to enhance the retirement security of workers by increasing access to and use of such arrangements.
Let’s get this into perspective, shall we? The Fed, led by tax-cheat “Turbo-Tax Timmy” Geithner, rather deliberately crashed the market, causing retirees (and everyone else) to lose significant chunks of their investment portfolios, and now they want to help by possibly forcing Americans to buy from Wall Street investment firms bailed out by our hard-earned tax dollars because WE are the stupid ones?
Cue those frantically flying pigs. From Business Week:
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
“There’s a real desire on a lot of people’s parts to try to encourage something other than just rolling over a lump sum, to make sure this money will actually last a lifetime,” said [David] Certner, legislative counsel for Washington-based AARP, the biggest U.S. advocacy group for retirees.
There is “a tremendous amount of interest in the White House” in retirement-security initiatives, Borzi, who heads the Labor Department’s Employee Benefits Security Administration, said in an interview.
In addition to annuities, the inquiry will cover other approaches to guaranteeing income, including longevity insurance that would provide an income stream for retirees living beyond a certain age, she said.
“There’s been a fair amount of discussion in the literature taking the view that perhaps there ought to be more lifetime income,” Iwry, a senior adviser to Treasury Secretary Timothy Geithner, said in an interview.
“The question is how to encourage it, and whether the government can and should be helpful in that regard,” Iwry said.
Promoting annuities may benefit companies that provide them through employers, including ING Groep NV (INGA:NA) and Prudential Financial Inc. (PRU), or sell them directly to individuals, such as American International Group Inc. (AIG), the insurer that has received $182.3 billion in government aid.
One proposal raised by Iwry as co-author of a paper while at the Retirement Security Project, before joining the administration, has reached Congress. A bill requiring employers to report 401(k) savings both as an account balance and as a stream of income based on an annuity was introduced on Dec. 3 by Senators Jeff Bingaman, a New Mexico Democrat, Johnny Isakson, a Georgia Republican, and Herb Kohl, a Wisconsin Democrat.
What Americans choose to do with their money is nobody’s business but their own. Certainly people should be encouraged to save for their retirement but when those who do so have their money stolen by the government through alleged regulation and oversight, the answer is not more government regulation and oversight. Social Security was intended to be an adjunct to our personal retirement savings, not the end-all into which it has morphed (mainly through the progressive liberal-encouraged spread of entitlement mentality derangement syndrome), and the government’s management of it has never been as originally intended so despite being a Ponzi scheme in the first place, it’s broke. The AARP benefits from the sale of insurance policies so their support must be seen as self-serving and therefore suspect.
Bottom line: To give the government any more control is just another step towards the nanny-state they so desperately desire.