Posted on 08/12/2010 5:58:45 AM PDT by PMAS
Senator Jeff Bingaman, a New Mexico democrat, introduced the Automatic IRA Act of 2010 last week. The new legislation would require all firms with 10 or more employees that don't already offer a retirement plan to automatically enroll workers in an IRA. Workers who don't wish to participate would need to take action to opt out or change the default contribution amount and investments. Here's a look at how this bill, if passed, would affect you: Standardized 3 percent savings rate. Employees age 18 and older who have been employed for at least three months would be automatically enrolled in an IRA. The bill currently sets 3 percent of a worker's paycheck as the default amount that would be withheld and directly deposited into an Automatic IRA account.
(Excerpt) Read more at finance.yahoo.com ...
This plan is very similar to the Chilean plan. If it were combined with a ten year phaseout of Social Security it would be a total winner.
you may wish to learn more about it first...
“The 401(k) will turn out to be the greatest systemic financial hoax ever perpetrated on an unsuspecting public.”
- William Wollman, The Great 401(k) Hoax
http://www.bitsofnews.com/content/view/7938/
http://market-ticker.org/archives/1830-401kIRA-Screw-Job-Coming.html
http://www.businessweek.com/news/201...et-losses.html
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.
Promoting annuities may benefit companies that provide them through employers, or sell them directly to individuals, such as AIG-American International Group Inc., the insurer that has received $182.3 billion in government aid.
If It’s Just a Matter Of Requiring an Additional Choice, That’s OK, But REQUIRING IT is unconstitutional. Without a signature from the owner, I don’t believe they could legally TAKE the money and convert it into anything without violating the constitution. Therefore, before anything would actually happen, a lot of legal hurdles would have to be overcome.
I’m trying to visualize how this government seizure might take place:
Obviously, these are just my thoughts:
1. Employers would be required to offer annuity conversion of all 401k balances.
2. The govt would only allow tax deduction on contributions converted to an annuity. All contributions made to any 401k account, (not set up as an annuity status), would not be tax deductable and would not qualify as contributions that could be matched by an employer.
3. In the event that the indiviual didn’t want to convert to annuity status, he would not be able to receive any distributions as lump-sum payments and limits would be placed on the size of any distribution. (this would cover people who are just about to take distributions at age 59-1/2). It would also prevent anyone from rolling over their 401k before age 59-1/2.
4. Once the indiviual reached a certain age, (say, 70-1/2), he would be required to set up the 401k as an annuity. (this would cover people who are already taking distributions at age 70-1/2). This is the part I would think would be extremely difficult to implement unless the constitution were modified. They can’t simply make you sign your own property away unless there is some kind of imminent domain precedent, but that only relates to property such as land or buildings. I can’t see how you could be forced to hand over your cash unless it fell under some kind of confiscation law already on the books.
I suppose, some of all 401k balances is legally OWNED by the Federal Government as taxes have not yet been paid. It seems to me the only legal right they have would be to require an immediate payment of all taxes owed. This would be an accounting nightmare, as in each tax year the balance was under a status of “401k funds”, varying taxes and capital gains were not paid. Also, loans and money removed for education etc. would add to the impossible tax calculations.
Of course, the reason for this is inheritance. The govt. wants the principal when you die. The annuity would cover a spouce, but I’m sure it could not be passed on to a son or daughter or any living relative named in a will.
Retirement plans, including 401(k) accounts, held $3.6 trillion in assets at the end of the second quarter of 2009, while annuity investments of all kinds totaled about $2.3 trillion, according to figures from the Washington-based Investment Company Institute, a trade association for asset managers.
This is going to be one of the most contested battles to ever take place in US history if this becomes reality. Afterall, the net worth of the nation is at stake.
I seem to remember that too...
Very faintly similar. The main "feature" of this is that the default investment option will be a Treasury bond. All the easier for Congress to run up deficits!
wasn’t his wife asst AG in the Clinton admin?
Neah. This is a TAX: “You WILL buy our worthless bonds.”
It also allows them to look at further gutting Social Security by turning into Social Security “Insurance:” “We don’t care how much you paid in, you ain’t gettin’ anything out, ‘cause you’re not poor enough.”
His wife Ann was an assistant to Janet Reno. She got a gig with Global Crossing to do their FCC paperwork, just prior to the expiration of the Clinton administration. For 6-months of work Global Crossing paid her 2.6 mil. (Yes the same Global Crossing went bankrupt less than a year later) She took that money, which was a payoff for favors from her husband, and got a low interest minority loan in DC to buy the remnants of the old GTE phone system (it was my phone system until a local coop came to town). These are evil extreme leftie cretin. I know Jeff personally, he beat a friend of mine when he was first elected to the Senate.
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