The
$1.01 trillion spending bill being
moving through Congress right now includes some new provisions that may
come as a shock to millions of American pension holders. In a
bipartisan deal that also included leaders of
unions and
retirement fund
management companies, pension recipients who depend on the money
promised to them during their working years may see significant cuts to
their monthly disbursements.
There have been Senate
hearings, exploratory committees and rumors over the years, but nothing
had ever really been legislated so most Americans simply ignored it as
another one of those “conspiracy theories.”
Until now.
The
measure, attached to a massive $1.01 trillion spending bill, would
alter 40 years of federal law and could affect millions of workers, many
of them part of a shrinking corps of middle-income employees in
businesses such as trucking, construction and supermarkets.
“We have to do something to
allow these plans to make the corrections and adjustments they need to
keep these plans viable,” said Rep. George Miller (D-Calif.), who along
with Rep. John Kline (R-Minn.) led efforts to hammer out a deal.
The idea is reluctantly supported by some unions and retirement fundmanagers who see it as the only way to salvage pensions in plans that are in imminent danger of running out of money.
But it also has stirred strong opposition from retirees who could face deep pension cuts and from advocates eager to keep retiree pensions sacrosanct, even in cases when funds are in a deep financial hole. The advocates argue that allowing cuts to plans would open the door to trims for other retirees later.
“We thought our pension was secure,”
said Whitlow Wyatt, a retired trucker who lives in Washington Court
House, a small city in central Ohio. “That was always the word. Now they
are changing that.”
Millions of others think their pensions and 401K’s are secure too. But they’re not.
As we noted back when these types of drastic measures were just a twinkle in the eye of government planners,
there is a coming destruction of U.S. pensions as
cities, states and even the Federal government scramble to figure out how to balance
budgets that have been over bloated by billions of dollars.
During the boom times of entitlement spending and government largess leading up to the financial crisis, local governments that include cities and counties spent their share of forward earnings as well. And now those uncontrolled fiscal policies are coming home to roost.
For those Americans who have
worked for decades with the hopes that their pensions, health care and
other benefits would be there when they retire, we offer a glimpse into
what the future may hold.
[...]
“We knew that debt and
unfunded pension obligations were serious problems at the state and
federal level and assumed that a similar pattern would follow at the
local level. But, quite frankly, I was stunned by the depth of the crisisfor local governments,” said Pappas.
“This goes well beyond big
cities, where you expect financial challenges. These fiscal problems
permeate townships, villages, school districts, park districts, fire
protection districts and more, and the taxpayers are on the hook.”(Source: Cook County Treasurer)
But it’s not just pension
funds that will be targeted. Though the latest spending legislation
doesn’t specifically target 401(k) plans and traditional IRA’s, the
groundwork for a retirement stopgap has
already been laid by Congress. Should we experience another financial
event there is a real possibility that pension funds will see their
portfolios collapse. In such a scenario the government will likely move
very quickly to ensure that pensioners
continue to receive their benefits.
But where will the money for that come from?
The
hearing, held in the Labor Department’s main auditorium, was monitored
by NSC staff and featured a line up of left-wing activists including one
representative of the AFL-CIO who advocated for more government
regulation over private retirement accounts and even the establishment
of government-sponsored annuities that would take the place of 401k
plans.
[...]
Such “reforms” would effectively end private retirement accounts in America, Crone warns.
“These people want the
government to require that ultimately all Americans buy these government
annuities instead of saving or investing on their own. The Government could then take these trillions of dollars and redistribute it through this new national retirement system.”
But the government can’t legally take over an entire multi-billion dollar industry, right?
Well, up until recently that may have been true. But what
Obamacare has
proven is that not only can they take over, they can compel you by
force to purchase these services. And this is exactly what they are
planning with private
retirement accounts.
No longer will you be allowed to choose how your money is invested.
Rather, you will be mandated to purchase a government annuity or
government run plan, which will then redistribute wealth from each according to their ability to each according to their needs.
Equality for everyone, just like health care.
But don’t worry, this is for your benefit. You need to be saving and the government is happy to oblige:
They
will take our retirement accounts. They will take our 401(k)’s. They
will say you have all been having such hard times earning money, so what
we’re going to do is we’re going to save you. We’re going to give you
government bonds... which are guaranteed... 30 year government bonds...
and you will get 3% and you give us your retirement assets.
The push to seize and centralize
retirement accounts has
begun. This is happening. It’s happening right now. Soon, we’ll all be
on the same “bronze” or “silver” government mandated plan. And, if their
management of Social Security benefits are any guide, then America is
in for a rough ride.
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