Flush with the victorious takeover of health care by the President and his progressive lemmings have a new target, your 401K. Under the guise of "protecting your future," they want to take over your IRAs in exchange for getting a lifetime guaranteed annuity. Your retirement accounts will be put in the same pot as the Union pension plans (most of which are failing) creating a big pot with all of the solvency of Social Security and AARP wants to help.

Annuities generally guarantee income until the retiree’s death, and often that of a surviving spouse as well. They are designed to protect against the risk that retirees outlive their savings, a danger made clear by market losses suffered by older Americans over the last year, David Certner , legislative counsel for AARP, said in an interview.

“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 Certner, legislative counsel for Washington-based AARP, the biggest U.S. advocacy group for retirees.

In February Newt Gingrich and Peter Ferrara warned that the government wants to use the money to pay off the federal deficit:

They will tell you that you are "investing" your money in U.S. Treasury bonds. But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds.

This "conversion" may start out as an optional choice, though you are already free to buy Treasury bonds whenever you want. But as Karl Denninger of the Market Ticker Web site reports: "’Choices’ have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market — so they will effectively tax you by forcing your ‘retirement’ money to buy them."

Moreover, benefits based on Treasury bond interest rates may be woefully inadequate compensation for your years of savings. As Denninger adds, "What’s even worse is that the government has intentionally suppressed Treasury yields during this crisis (and will keep doing so by various means, including manipulating the CPI inflation index) so as to guarantee that you lose over time compared to actual purchasing power."

This proposal follows hearings held last fall by House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee focusing on "redirecting (IRA and 401k) tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute," as reported by InvestmentNews.com.

Last week, Connie Hair disclosed in Human Event s the rationale behind the effort— protecting the failing Union Pension Plans:

In February, the White House released its “Annual Report on the Middle Class” containing new regulations favored by Big Labor including a bailout of critically underfunded union pension plans through “retirement security” options.

The radical solution most favored by Big Labor is the seizure of private 401(k) plans for government disbursement — which lets them off the hook for their collapsing retirement scheme. And, of course, the Obama administration is eager to accommodate their buddies.

….the backdoor bulls-eye is on your 401(k) plan and the trillions of dollars the government would control through seizure, regulation and federal disbursement of mandatory retirement accounts.

Boehner and the group are sounding the alarm, warning bureaucrats to keep their hands off of America’s private retirement plans.


The
House GOP Savings Recovery Group sent a letter to the Labor and Treasury secretaries, outing the issue :

Dear Secretaries Solis and Geithner:

As members of the Republican Savings Solutions Group, we write today to express our strong opposition to any proposal to eliminate or federalize private-sector defined contribution pension plans, such as 401(k)s, or impose burdensome new requirements upon the businesses, large and small, who choose to offer these plans to their employees.

In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts, (GRAs)” which would provide for protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” — presumably at taxpayer expense. In the Report, the Vice President recommended “further study of these issues.”

The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary — again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen. This despite data showing that 90 percent of households have a favorable opinion of the existing 401(k)/IRA system.

In light of these facts, we write today to express our opposition in the strongest terms to any effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or disfavor the private 401(k) system in favor of a government-run retirement security regime.

Similarly, and more recently, the Departments of Labor and Treasury have jointly issued a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options.” While we appreciate the Departments’ seeking guidance and information from all parties and stakeholders in advance of regulatory activity, we strongly urge that the Departments not proceed with any regulation in this area before they have carefully and thoroughly considered all of the information received.

More specifically, we urge that the Departments take no action to mandate that plan sponsors — often, small businesses — include a “lifetime income” or “annuitization” option if they choose to offer a 401(k) plan to their employees, or that beneficiaries take some or all of their retirement savings in such an option. Data shows that 70 percent of Americans oppose the concept of a mandated annuity or government payout of their 401(k) plan. On a more fundamental level, Congress should not be in the business of choosing “winners” and “losers” among retirement security stakeholders. Instead, we urge the Departments to make it easier for employers to include retirement income solutions in their savings plans and to help workers learn more about the value of their retirement savings as a source of retirement income. Finally, to the extent new mandates and bureaucratic red tape from Washington push small employers out of the business of offering these plans to their employees, we would submit such an effort weakens, rather than strengthens retirement security.

We appreciate your consideration of our views in these important matters and stand ready to work with you and the Administration to promote secure and adequate retirement savings for all Americans.

The Progressives may find a way to try to shove it though before the election after all they have all of those union pension plans to protect.

How bad off are the union pension plans? The best single indicator of a plan’s financial health is its Funding Percentage. A fully funded plan will have a funding percentage of 100%. A plan is underfunded when the percentage is below 100%. The lower the percentage, the greater the risk that benefits will not be available when they come due.

According to the Pension Protection Act of 2006 multi-employer (plans set through unions and company sponsors) plans are evaluated via their funding levels. To ensure retiree benefits are protected, when a multi-employer plan falls below certain funding levels, stronger funding requirements become effective under provisions of the Pension Protection Act of 2006. Plans whose funding levels are below 80% are referred to as “endangered,” while those below 65% are referred to as “critical.”

The list of 108 union pension plans below is from the Moody’s September 2009 report  (they only measured 125), all are below the 80% level, about half of them are below critical.

.

.
Union Pension Plan
% Funded

.
Alaska Hotel & Restaurant Employees Pension Plan
79.70%

.
American Federation of Musicians & Employers Pension
78.90%

.
Teamsters Local 639 Employers Pension Trust
76.10%

.
Producer-Writers Guild of America Pension Plan
75.90%

.
Ohio Operating Engineers Pension Plan
75.70%

.
Laborers District Council and Contractors Pension Fund of Ohio
75.40%

.
Southern Nevada Culinary & Bartenders Pension Trust
75.40%

.
Alaska Electrical Pension Plan
74.30%

.
Alaska Laborers – Employers Retirement Fund
73.70%

Trending

.
Electrical Contractors Assoc. of City of Chicago Union 134, IBEW Jt. Pension 2
73.70%

.
Carpenters Retirement Plan of Western Washington
73.10%

.
Automotive Industries Pension Plan
72.40%

.
American Maritime Officers Pension Plan (2005)
72.40%

.
United Mine Workers of America 1974 Pension Plan
72.30%

.
GCIU Local 119B NY Printers League Pension Fund
71.40%

.
National Elevator Industry Pension
71.00%

.
Western Conference of Teamsters
70.60%

.
Newspaper GUILD of NY the New York Times Pension Plan
70.50%

.
Chicago District Council of Carpenters Pension Fund
70.10%

.
District No. 9, IAM and Aerospace Workers Pension
69.70%

.
Rocky Mt. UFCW Unions & Employers Pension Plan
69.50%

.
Hotel/Casino – Summary
69.50%

.
NECA-IBEW Pension Trust Fund
69.20%

.
Central Pension Fund of the IUOE and Participating Employers
69.20%

.
AFTRA Retirement Plan
68.90%

.
Carpenters Pension Trust Fund of St Louis
68.60%

.
MA State Carpenters Pension Fund
68.60%

.
National Automatic Sprinkler Industry Pension
67.80%

.
Midwest Operating Engineers Pension
67.80%

.
Retail Clerks Pension Plan
67.70%

.
Electrical Workers Pension Fund, Local 103, IBEW
67.50%

.
Building Trades United Pension Trust Fund MIL and Vicinity
67.40%

.
CWA/ITU Negotiated Pension Plan
66.80%

.
UFCW Unions & Employers Midwest Pension Fund
66.70%

.
Laborers Pension Fund
66.70%

.
Carpenters Pension Fund of Philadelphia and Vicinity
66.40%

.
UFCW International Union Pension Plan for Employees
66.40%

.
Alaska Teamster-Employer Pension Plan
66.30%

.
Steelworkers Pension Trust (2007)
66.20%

.
Hotel Industry-ILWU Pension Plan
65.70%

.
National Asbestos Workers Pension Fund
65.20%

.
IUOE Stationary Engineers Local 39 Pension Plan
65.20%

.
SEIU National Industry Pension Fund
65.00%

.
Trucking Employees of North Jersey Welfare Fund Inc. Pension Fund
65.00%

.
Massachusetts Laborers Pension Fund
64.70%

.
California Ironworkers Field Pension Trust
64.50%

.
Carpenters Pension Fund of Illinois
64.20%

.
Automotive Machinists Pension Plan
63.80%

.
NJ Carpenters Pension Fund
63.60%

.
The Newspaper Guild International Pension Plan
62.80%

.
Minnesota Laborers Pension Fund
62.40%

.
Bakery & Confectionery Union & Industry International Pension
62.30%

.
Laborers National Pension Fund
62.10%

.
Operating Engineers Pension Trust
61.70%

.
UFCW Unions and Food Employers Pension Plan of Central Ohio
61.30%

.
UFCW Nothern California Joint Pension
61.00%

.
Carpenters Pension fund of Western Pennsylvania
60.80%

.
Newspaper and Mail Delivers – Publishers Pension Fund
60.50%

.
Carpenter Pension Trust for Southern California
60.40%

.
BERT Bell Pete Rozelle NFL Player Retirement Plan
60.00%

.
Major League Baseball Players Pension Plan
59.60%

.
Sheet Metal Workers Pension Plan of S. CA, Arizona and Nevada
59.50%

.
NY District Council of Carpenters Pension Plan
59.30%

.
SO CA UFCW Union Joint Pension
58.40%

.
National Electrical Benefit Fund
58.20%

.
Boilermaker Blacksmith National Pension
58%

.
GCIU-Employer Retirement Fund
57.60%

.
ILWU-PMA Pension Plan
56.90%

.
Masters, Mates & Pilots Pension Plan
56.60%

.
Wisconsin Carpenters Pension Fund
56.50%

.
Electrical Workers Pension Trust Fund of Local Union 58
55.80%

.
Automotive Mechanics Local No. 701 Union Pension Fund
55.60%

.
IB of T Union Local 710 Pension
55.60%

.
Michigan Laborers Pension Fund
55.30%

.
PACE Industry Union-Management Pension Fund
55.20%

.
Pipe Fitters Retirement Fund Local 597
55.20%

.
Sheet Metal Workers Pension Plan of Northern Calif
55.10%

.
Central Pennsylvania Teamsters Defined Benefit Plan
55.10%

.
NY Hotel Trades Council and Hotel Association of NYC Pension Fund
55.10%

.
Teamsters Joint Council No. 83 of Verginia Pension Fund
54.90%

.
National Integrated Group Pension Plan
54.50%

.
Plumbers & Pipefitters National Pension
54.50%

.
Central Laborers Pension Fund
54.20%

.
Iron Workers District Council of Southern Ohio & Vicinity Pension Trust
53.90%

.
Carpenters Pension Trust Fund for Northern California
53.70%

.
Bricklayers & Trowel Trades International Pension Fund
53.60%

.
Western Pennsylvania Teamsters and Employers Pension Plan
53.10%

.
Chicago Newspaper Publishers Drivers Union Pension Trust
52.90%

.
OE Pension Trust Fund
52.40%

.
Indiana State District Council of Laborers & Hod Carriers Pension Fund
51.70%

.
NYS Teamsters Conference Pension & Retirement Fund
51.40%

.
LIUNA National Industrial Pension Fund
50.30%

.
Michigan Carpenters Pension Fund
50.20%

.
Twin City Carpenters Pension Fund
50.20%

.
Laborers Pension Trust Fund for Northern California
50.00%

.
HERE Local 25 and Hotel Association of Washington, DC Pension
49.30%

.
Central States SE&SW
48.50%

.
Teamsters Pension Trust of Philadelphia and Vicinity
48.50%

.
Operating Engineers Local 324 Pension Fund
47.30%

.
Laborers District Council of W. PA Pension Fund
46.80%

.
Iron Workers Local No. 25 Pension Trust Fund
46.40%

.
Local 705 IB of T Pension Trust Fund
46.30%

.
Building Service 32B-J Pension Fund
42.30%

.
Carpenters Pension Trust Fund Detroit & Vicinity
41.40%

.
New England Teamsters & Trucking Industry Pension
40.50%

.
FELRA and UFCW Pension Fund
39.80%

.
Local 804 I.B.T. and Local 447 IAM UPS Multi-employer Retirement Plan
39.70%

.
Sheet Metal Workers National Pension Fund
38.00%



Folks examine these numbers carefully,because one day your pension plans will be making these plans solvent—at your expense.

Cross-posted From "The Lid"

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