For those who still think this whole "GRA & 401k confiscation thing" was just an "offhand" congressional committee meeting idea that's being overblown...
Here is a link to a PDF of the 20 page long "briefing paper" about the proposed "Guaranteed Retirement Accounts" written up by the Teresa "Il Duce" Ghilarducci for the "Economic Policy Institute":Among a host of other things, the report includes this nice little "gem":
If subsidies for 401(k)-style plans and IRAs can be reallocated to Guaranteed Retirement Accounts, why not use this money to shore up and expand Social Security?Then, under the "Questions about Guranteed Retirement Accounts" there is this littel beauty:
This is certainly an option.
[Q] Will Guaranteed Retirement Accounts provideGee... wasn't "a basic retirement income" what the Social Security system was supposed to take care of?
enough retirement income for all workers?
[A] No. The system is designed to provide a basic retirement
income for workers with steady, full-time jobs.
So of course, lest people think this is MORE of the same current FAILED system... there has to be some obfuscation of this so that people don't think this is just a round-about way of INCREASING FICA taxes by another 10% (5% from you, 5% from your employer) -- and that instead they are still kinda-sorta like the 401K's and IRA's -- just "pooled" and "government managed":
The accounts will be managed by a unit of the Thrift SavingsAnd of course -- everyone knows how trustworthy that Federal Reserve Board of Governors" actually is -- no corruption there!
Plan with its own trustees, who in turn will hire commercial money managers. The trustees will be independently appointed, half by the president (subject to Senate confirmation) and half by Congress. They will have terms structured in a similar fashion to the Federal Reserve Board of Governors.
But at the end -- the very last sentence of the report -- she reveals the TRUTH:
The GRAs are administered by the Social Security systemAnd of course, despit all of the BS about it being a "private" account and all -- the money will NOT be yours -- no siree; for example your "heirs" only get a TEENY TINY bit of whatever it is you save (and apparently ONLY if you "die" BEFORE you retire):
eliminating all individual account management fees.
[Q] Why can’t workers bequeath the full amount of their account balances?So... see the addition 5% amount that your employer will "contribute" (another mandatory "voluntary" thingee) -- never mind that your employer is paying you another 5% LESS in wages (because EVERY employer cuts wages based on costs)... nope, THAT little bit the government gets to keep. (Nice little incentive for the government to start "killing off" people before they retire, ain't it? Anyone want to line up for your government supplied "Flu" shots?)
[A] The Guaranteed Retirement Account solution is a compromise. Workers can bequeath half their account balances—that is, the worker’s own contributions, plus interest, but not the employer contributions—minus any benefits received.
However, in this case the cash refund feature is paid for by redistributing half of the account balances of workers who die before retiring, rather than by reducing the annuity.
UPDATE: Just realized they said half of the "account balance" will be "redistributed" -- note that "REdistributed" not "distributed" -- which means the heirs WOULD NOT be able to "cash out" any such inheritance, but instead it would be "transferred" on your behalf (aka "redistributed") into the GRA accounts of the "heirs." Ergo the heirs would see NOTHING until THEY retired (talk about an inheritance tax... WOW!)
And then... of course... CERTAIN people will be allowed to opt out. Who? well:
The plan calls for all workers not enrolled in an equivalentLet's see... who exactly would fit into that category? Government employees for one. And who get's to decide whethen YOUR plan is "equivalent or better"? Hmmm... same answer; government bureaucrats.
or better defined-benefit pension to enroll in a GRA [...]
And how will this government-managed "fund" earn its money -- in what "magical" fashion will it do better than people saving and investing on their own? What guarantee is there that it won't disappear like Social Security?
[Q] How much risk is the government incurring?So... they'll invest it in TREASURIES and CORPORATE BONDS and STOCKS -- in other words the same things that Mutual Funds invest in -- which "should" earn a sufficient intrest rate (HA!). BUT "in the event of a protracted slump" (like THAT would ever happen, I mean seriously!) then the government will ... well, they will just "LOWER the guaranteed return" (which means, of course, that there is NOTHING "guaranteed" about it).
[A] Based on current bond yields and a conservative estimate of future stock returns, a portfolio divided equally between long-term Treasuries, investment-grade corporate bonds, and stocks should earn a real rate of return of around 3.5%, enough to provide a cushion above the guaranteed rate. In the event of a protracted slump, the government retains the option of lowering the guaranteed return and allowing participants to access their funds.
One last item of note is that the "plan" doesn't even seem to be aware that SOME people are self-employed. Is this an oversight? Nope... because ABOVE ALL this plan is designed to TOTALLY SCREW OVER anyone who owns and operates their own business; essentially driving and "pushing" everyone to work for either the government, OR Big-Corporate America, OR... to essentially join the "gray-market." Since they do not draw a "paycheck" they will not be getting the "government subsidy" in any form -- ONLY PAYING IN EXTRA AMOUNTS FOR THEIR EMPLOYEES -- and ALL of the current subsidies for KEOGH plans are to be eliminated along with the 401K's & IRA's.
FINALLY, and perhaps most importantly, please note that this thing was written up in November of 2007 (and Ms. Il Duce even wrote a book, called "When I'm Sixty-Four: The Plot against Pensions and the Plan to Save Them" which was published in May of 2008).
Sidenote: Apparently there CAN be "plots" and "conspiracies" -- but only by those "evil free market capitalists" -- NEVER by government flunkies and apparatchiks.
So ANY and EVERY statement that you read which says or even implies in any way this idea is a "result" of a need to address the recent stock market "meltdown" is 100% pure bullshit.
They've been working on and planning this for YEARS.
And who is "they" you ask? The report acknowledges the following:
We gratefully acknowledge the generous support of the Rockefeller Foundation.