I received a disturbing public relations e-mail from Dr. Jerome Corsi who has been on the show several times. The subject of the e-mail was a news story that was circulating around for a while last year. However, it was more of a mention than anything. Well, the notion of Washington forcing Americans with 401(k) plans and IRAs to give up a portion of their accounts for a guaranteed annuity down the road is surfacing again. Dr. Corsi gives some evidence that the Obama administration might be seriously considering the hijacking of retirement plans in order to get money into the government coffers.

Note: Information from the press release is in bold

Bloomberg reported Friday that Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Mark Iwry are planning to stage a public comment period before implementing regulations that would require private investors to structure IRA and 401(k) accounts into what could amount to a U.S. Treasury debt-backed government annuity.

Spokesmen from both the U.S. Treasury and Department of Labor confirmed that the federal agencies are about to enter a pre-regulation public comment phase on the proposed rule change.

In a nutshell, they would require investors to forfeit a portion of their retirement account for a guaranteed income annuity at retirement. You could refer to it as Social Security II.

On the Department of Labor website, the transcript of a Dec. 9 webchat with Borzi confirms the Employee Benefits Security Administration is about to issue a Request for Information on how annuity lifetime options should be structured into a wide range of defined contribution retirement plans, including 401(k)s.

Under ERISA, the Department of Labor regulates approximately 700,000 private pension plans, with approximately $4.7 trillion in assets.

“Lifetime Income Options,” code words for annuities, are also listed in the Department of Labor’s regulatory agenda for the Employee Benefits Security Administration, issued Dec. 7 and filed in the Federal Register.

Due to all of the losses from the bear market, the Government thinks that investors are not smart enough to handle their own investments and that the Government should help them out. The real truth is that it is a way to raise money for the irresponsible spending and just an additional way to put more dependence on the Government (i.e. socialism).

The Investment Company Institute, a national trade organization representing the mutual fund industry, argues that the distinction of the Obama administration proposal would be to require annuities funded with Treasuries to be embedded within IRAs and 401(k) programs, using the fear of loss as a reason to demand retirement investors own Treasuries.

A survey conducted by the Investment Company Institute showed more than 70 percent of all households disagreed with the idea of requiring retirees to buy annuities with a portion of their assets, whether the annuity is offered by an insurance company or by the government.

Moreover, 96 percent of households in the survey responded that retirees rejected the idea that the government should mandate turning IRA or 401(k) assets into annuities, asserting instead that retirees should make their own decisions about managing retirement assets and income.

The Investment Company Institute member companies manage some $11.62 trillion in mutual fund assets for some 90 million mutual fund shareholders, including retirement-oriented investors participating in defined contribution plans such as employer-sponsored 401(k) accounts.

Would the Obama administration really attempt to do something as irresponsible as to force investors to do something against their will? Well, they are doing it with healthcare. Why not with your retirement? We will keep a close eye on this story.

Tags: 401(k) plans, Bob Brooks, Department of Labor, Dr. Jerome Corsi, Obama Administration