It's happening elsewhere ,and there have been suggestions by some law makers that it could happen here.
European nations begin seizing private pensions - CSMonitor.comQuote:
People’s retirement savings are a convenient source of revenue for governments that don’t want to reduce spending or make privatizations. As most pension schemes in Europe are organised by the state, European ministers of finance have a facilitated access to the savings accumulated there, and it is only logical that they try to get a hold of this money for their own ends. In recent weeks I have noted five such attempts: Three situations concern private personal savings; two others refer to national funds.
The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.
It goes on to say that similar grabs are happening in Bulgaria, Poland, France and Ireland.
As I have posted ,a proposal to do something similar was floated by economics professor at 'The New School 'in New York ,Teresa Ghilarducci ,in testimony to the House Committee on Education and Labor in 2008.
It's complicated ,but the essence of the plan is to seize the assets of private 401k plans and pool them into government run 'Guaranteed Retirement Accounts '(GRAs). Then it would be mandatory for all American workers to register into the GRA.Workers contributions would be no less that 5 % of their income which would be invested entirely in government bonds with returns of 3% a year. 401k accounts invested in the stock market would necessarily be liquidated and invested in these Treasuries.
Upon retirement a worker would have their combined GRA and Social Security converted into life annuities that would pay out a fixed benefit .
This proposal is in the works. Joe Biden's task force on the Middle Class has proposed studying this option also.
http://www.whitehouse.gov/sites/defa...ddle-class.pdf (page 28)Quote:
“Some have suggested the creation of Guaranteed Retirement Accounts (GRAs), which would give workers a simple way to invest a portion of their retirement savings in an account that was free of inflation and market risk, and in some versions under discussion, would guarantee a specified real return above the rate of inflation.”
... “free of inflation and market risk”meaning they would be under the absolute control of the Federal Bureaucracy.
This has moved under the radar a lot further than is realized. Last year it made it into the Federal Register as a proposal .
Internal Revenue Bulletin - March 15, 2010 - REG-148681-09Quote:
“While defined contribution plans have some strengths relative to defined benefit plans, participants in defined contribution plans bear the investment risk because there is no promise by the employer as to the adequacy of the account balance that will be available or the income stream that can be provided after retirement.”... “The Agencies are considering whether it would be appropriate for them to take future steps for them to facilitate access to, and use of, lifetime income or other arrangements designed to provide designed to provide a stream of income after retirement.”
In other words ,'employers are not to be trusted to manage your private retirement account... we think we can do a better job'.
Yeah ;they've demonstrated that with a history of mismanagement of Social Security .
Social Security was supposed to be held in the famous Al Gore described 'lock box'. Instead they have added the funding to the general revenue and have used the numbers to massage the real government debt. History shows that any funds they plunder from private accounts will be simularily mismanaged.
