Only some trial balloons now. But watch out.
The first rumblings were heard in the 1990s, when Democrats were said to be coming after our retirement accounts. Back then, the warnings were easy to pass off as hyperbole or a cranky conspiracy theory. Today, they pass as prescient.
In January, Bloomberg reported the "U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and individual retirement accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry."
For some time, there have been rumblings that the federal government might try to solve its budgetary problems by nationalizing (i.e., stealing) the money that millions of Americans have set aside for retirement in 401(k) plans and the like. One way they might do this is to confiscate the cash on hand in exchange for a promise to make future payments in the form of an "annuity." An involuntary annuity, in that scenario.
I haven't taken this speculation too seriously, mostly because the core of the Democratic Party consists of lawyers, and a lawyer's most precious possession is his 401(k) account. . . .
You can read the Labor and Treasury Departments' Request for Information in the Federal Register. Its main theme is that the private-sector trend is toward defined contribution plans and away from defined benefit plans, and that, for some reason, plan beneficiaries don't choose lifetime annuity products as often as some bureaucrats think they should. So the federal government is looking for ways to promote lifetime annuities. . . .
At this point, I think the best we can say is this: the federal government is desperate for cash, and the biggest untapped source of wealth is the hundreds of billions or trillions of dollars that Americans who are now nearing retirement age have saved over their lifetimes. I don't doubt for an instant that the Obama administration would like to get its hands on this money, which would go a long way toward resolving the current government debt crisis. An obvious way of doing so is to take the money now, in exchange for a promise to pay an "annuity" later. The bottom line is that, given what we know about the Obama administration's rapacious appetite for swallowing up private wealth, anyone who has savings should be vigilant.
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.
Noted public policy expert Jerry Seinfeld, sarcastically, "Oh yeah, I like this idea."