401(k)'s, according to public comments aimed to help the departments of Labor and the Treasury determine steps to "enhance retirement security for workers in employer-sponsored retirement plans through lifetime annuities or other arrangements that provide a stream of income after retiring." The stock-market crash and economic recession erased up to half of many Americans' 401(k) plans and IRAs, a devastating blow to new retirees and those about to enter their Golden Years. Obama's Middle Class Task Force, headed by Vice President Joe Biden, has cited as one of its goals the availability of "annuities and other forms of guaranteed lifetime income, which transform savings into guaranteed future income, reducing the risks that retirees will outlive their savings." Reading through the 500 comments posted online, it's clear that few of those taking the time to weigh in want anything to do with such a proposal. A sample of the responses: 1. "I am appalled and insulted that you would consider yourself in a better position than I to know what is best for me in regard to my own money. I have already decided to skip both my and my wife's 2009 Roth IRA contribution, and I have already ceased contributing to a retirement plan for 2010. Unless, and until, I hear that you are dropping this disastrous plan, I have made my last retirement contribution." 2. "Is your plan seeking to privatize my IRA by turning it over to the custody of a private insurance company? If that is so, then I've got major heartburn over this plan. Do you realize that as an unsecured creditor (which I would be) to a private insurer, my fate would depend solely on the solvency of the insurer? With the recent revelation that the use of
credit default swaps was fairly widespread throughout AIG ( AIG), might I not assume such practice may be widespread throughout the whole insurance industry? To that I say, your hare-brained scheme is fraught with systemic risk. I have taken comfort in the knowledge that after my demise, my heirs would be able to share the remainder of my IRA nest egg. Needless to say, your annuitization proposition would drive a stake right through the heart of my estate plan to the detriment of my heirs. You are declaring war on my family, and I will do whatever it takes to protect them."
3. "Oh, yes, by all means create another pot of money you can steal from. Do you people ever quit? No one needs you to come up with a foolish Treasury bond forced plan. You'll take $1 and pay back 25 cents worth of buying power. If you tie the returns to a commodity index, I am all for it. But not for a 3% return in 25% inflation. Anyone there have a clue on monetary policy, or do you just look for the next Ponzi scheme to create?" 4. "Coming from a host of ridiculous decisions from an administration and Fed set on 'trying ideas,' this is a recipe for civil unrest. If I wanted socialism, I'd move to Cuba, thank you very much. If my elected government aims to control my money, I will completely remove any and all investments from the market and transfer my wealth to gold." 5. "This is the single most devious, socialistic, anti‐constitutional proposal I have ever read, and if this idea were to be manifest in law, I would consider it a brazen act of fiscal piracy. That this idea could even be considered causes me to evaluate strategies to protect and defend what is mine. It also makes clear the true intent of the federal government, and this does not inspire confidence nor patriotism." 6. "My husband and I plan on pulling all of our retirement funds out of our 401(k)'s if this plan even hints at being passed. I'd rather earn 1% in a savings account until we retire than give it to the government." 7. "A government raid on private retirement funds wouldn't necessarily take the form of outright confiscation. It could take the form of mandatory conversion into government accounts, where the government would determine how much money retirees could receive. Or it could take the form of, for example, a 40% surtax on disbursements from 401(k) balances over $1 million -- on the grounds that it would only harm wealthy 'millionaires.' I reject that notion! The basic principle would be the same: My money would no longer be my money. Instead, the government would claim the right to redistribute my wealth to pay for others' retirement on the grounds that they needed it more."
Only a handful of the comments struck a supportive or neutral stance. Among them: "I just want to say that I hope everything possible is done to ensure retirement security for all Americans. Make annuitization the default option! Don't listen to paranoid idiots who think a sensibly regulated pension system is 'socialism.' " Comments may be addressed to the U.S. Department of Labor, Office of Regulations and Interpretations, Employee Benefits Security Administration, N-5655, 200 Constitution Ave. NW, Washington, DC 20210, Attn: Lifetime Income RFI. The email address is E-ORI@dol.gov or through the federal e-rulemaking portal at www.regulations.gov. The deadline is May 3. -- Reported by Joe Mont in Boston.