The Slippery Slope Continues

A month ago, I had a post about a potential government takeover of retirement accounts. This topic is back in the news this week as the deadline for public comment looms (May 3rd) on a request for information floated by the DOL and the Treasury. Under what the government is calling a proposal for providing a "lifetime stream of income" individual rights would once again be trampled.

Imagine handing control over your retirement savings to the federal government. No longer would you be able to determine how much of your savings you could draw at any given time. For those of us who have invested capital in both currency and time, the idea of this is reprehensible.

Why would this idiotic idea seem to be gaining steam?  Anyone who follows current events knows that government is broke at every level.  Congress has just passed the largest entitlement program on the face of the planet.  An enormous amount of funds will be needed in a very short time.  What is the single largest pool of funds available?  The retirement savings of millions of hard working Americans.  Sound far-fetched? 

From the DOL request for information:
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.

You can view the entire RFI here.

Input is solicited asking that we consider a GAO report entitled "Alternative Approaches Could Address Retirement Risks Faced By Workers But Pose Trade-offs'.  In Appendix III of this report (on page 74 of the PDF file) several options are listed for consideration, including the dreaded Guaranteed Retirement Accounts plan which I spoke about in March.  I also recommend that you read the entire GAO report. 

Here is an excerpt:
The private pension systems of the Netherlands, Switzerland, and the United Kingdom represent alternative approaches to address these key risks, but they also pose trade-offs to consider in applying them in the U.S. We selected these countries from a larger group after an initial review indicated that their private pension systems addressed many of the risks that U.S. workers face and had the potential to yield useful lessons for the U.S. experience. Their systems offer ideas for mitigating risks in accumulating and preserving benefits, such as mandating coverage, sharing investment risk among workers and employers, restricting leakage, and using annuities to drawdown benefits. However, these approaches pose trade-offs. For example, in the Dutch and Swiss systems, sharing investment risk requires assets to be pooled and thus limits individual choice. Additionally, while annuitizing benefits at retirement can mitigate longevity risk, doing so also limits retirees’ access to their assets.
You can find it here.
Please take the time to read the RFI and tell Congress to STOP HELPING US!