Yes, slowly but surely it is happening. In a federal notice filed earlier, the DOL and Treasury are soliciting a response on what has been on many investors' mind, namely the process of converting 401(k)s into annuity-like products. To wit:
The Department of Labor and the Department of the Treasury (the "Agencies") are currently reviewing the rules under the Employee Retirement Income Security Act (ERISA) and the plan qualification rules under the Internal Revenue Code (Code) to determine whether, and, if so, how, the Agencies could or should enhance, by regulation or otherwise, the retirement security of participants in employer-sponsored retirement plans and in individual retirement arrangements (IRAs) by facilitating access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement. The purpose of this request for information is to solicit views, suggestions and comments from plan participants, employers and other plan sponsors, plan service providers, and members of the financial community, as well as the general public, on this important issue.
A cursory read of the document does not seem to ask about a flat out regulatory requirement for annuitization. We point your attention to item 13:
13. Should some form of lifetime income distribution option be required for defined contribution plans (in addition to money purchase pension plans)? If so, should that option be the default distribution option, and should it apply to the entire account balance? To what extent would such a requirement encourage or discourage plan sponsorship?
For readers who feel compelled to respond to this increasingly socialistic and ludicrous development, we suggest you voice your anger at the following address:
* e-ORI@dol.gov. Include RIN 1210-AB33 in the subject line of the message
Your Retirement Plan Will Soon Become Washington's ATM Machine
Today over $15 trillion is sitting in tax-favored retirement plans, including $4 trillion in IRA accounts. Retirement savings make up 35% of all private assets. Washington is broke, the deficit is soaring and Congress simply canât wait for Americans to retire so they can start taxing these funds. The politicians are tired of waiting; they need your money now.
The Trojan Horse
The nationalization will begin with a modest proposal to increase retirement security and basically create a new, third level of mandatory retirement benefits in addition to private plans and Social Security. This will be described as a Guaranteed Retirement Annuity or Account. Teresa Ghilarducci is the author of this leftist plan which first appeared in 2007 at the Economic Policy Institute: Agenda for Shared Prosperity. In 2008, she became the new Director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research. In her book When Iâm 64: The Plot Against Pensions and the Plan To Save Them, she hypes her retirement solution for millions who do not have adequate retirement savings. Her ultimate solution is to confiscate most of the retirement assets of successful and wealthy Americans.
In the proposal, the government will even make an annual contribution to every citizenâs account of around $600 annually, covering the unemployed, under-employed and all working Americans. The initial problem for productive, successful Americans is that Washington will require, in exchange for their contribution, that all working Americans contribute 5% of their annual salaries or income into this new "guaranteed account" managed and run by the hard-working bureaucrats at the Social Security System. Successful Americans will of course complain about losing the deduction for this contribution, which is little more than a new 5% tax on income. But this is just the beginning of the problem for Americans with substantial retirement savings and outstanding benefits.
Quote from clacy:
I won't say never, but I can't envision a serious attempt at this without resulting in a full fledged revolution.
Quote from Clubber Lang:
After watching a glorified community activist with a socialist agenda who was mentored by a white-hating nigger preacher get elected as president of the United States, nothing surprises me anymore.
Looks like the hard working taxpayers are going to take it in the ass again when Obama redistributes their retirement accounts to ACORN and the illegal immigrants.
Wake up people.
Obama/Pelosi/Frank need to be stopped!!!!!!!!!!
Quote from ipatent:
Get ready to bend over...
http://www.zerohedge.com/article/tr...eedback-regarding-proposed-annuitization-401k
Well, now it is more than just blog rumors...
The Treasury Is Soliciting Your Feedback Regarding The Proposed Annuitization Of 401(k)
A cursory read of the document does not seem to ask about a flat out regulatory requirement for annuitization. We point your attention to item 13:
For readers who feel compelled to respond to this increasingly socialistic and ludicrous development, we suggest you voice your anger at the following address:
* e-ORI@dol.gov. Include RIN 1210-AB33 in the subject line of the message