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Wednesday, May 12, 2010

Unions Covet Your 401K, Obama Wants to Oblige, AARP Helping

Flush with the victorious takeover of health care by the President and his progressive lemmings have a new target, your 401K. Under the guise of "protecting your future," they want to take over your IRAs in exchange for getting a lifetime guaranteed annuity. Your retirement accounts will be put in the same pot as the Union pension plans (most of which are failing) creating a big pot with all of the solvency of Social Security and AARP wants to help.
Annuities generally guarantee income until the retiree’s death, and often that of a surviving spouse as well. They are designed to protect against the risk that retirees outlive their savings, a danger made clear by market losses suffered by older Americans over the last year, David Certner, legislative counsel for AARP, said in an interview.
“There’s a real desire on a lot of people’s parts to try to encourage something other than just rolling over a lump sum, to make sure this money will actually last a lifetime,” said Certner, legislative counsel for Washington-based AARP, the biggest U.S. advocacy group for retirees.
In February Newt Gingrich and Peter Ferrara warned that the government wants to use the money to pay off the federal deficit:
They will tell you that you are "investing" your money in U.S. Treasury bonds. But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds.

This "conversion" may start out as an optional choice, though you are already free to buy Treasury bonds whenever you want. But as Karl Denninger of the Market Ticker Web site reports: "'Choices' have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market — so they will effectively tax you by forcing your 'retirement' money to buy them."

Moreover, benefits based on Treasury bond interest rates may be woefully inadequate compensation for your years of savings. As Denninger adds, "What's even worse is that the government has intentionally suppressed Treasury yields during this crisis (and will keep doing so by various means, including manipulating the CPI inflation index) so as to guarantee that you lose over time compared to actual purchasing power."

This proposal follows hearings held last fall by House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee focusing on "redirecting (IRA and 401k) tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute," as reported by InvestmentNews.com.
Last week, Connie Hair disclosed in Human Events the rationale behind the effort--- protecting the failing Union Pension Plans:
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. And, of course, the Obama administration is eager to accommodate their buddies.

....the backdoor bulls-eye is on your 401(k) plan and the trillions of dollars the government would control through seizure, regulation and federal disbursement of mandatory retirement accounts.

Boehner and the group are sounding the alarm, warning bureaucrats to keep their hands off of America’s private retirement plans.

The 
House GOP Savings Recovery Group sent a letter to the Labor and Treasury secretaries, outing the issue :
Dear Secretaries Solis and Geithner:

As members of the Republican Savings Solutions Group, we write today to express our strong opposition to any proposal to eliminate or federalize private-sector defined contribution pension plans, such as 401(k)s, or impose burdensome new requirements upon the businesses, large and small, who choose to offer these plans to their employees.

In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts, (GRAs)” which would provide for protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” -- presumably at taxpayer expense. In the Report, the Vice President recommended “further study of these issues.”

The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary -- again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen. This despite data showing that 90 percent of households have a favorable opinion of the existing 401(k)/IRA system.

In light of these facts, we write today to express our opposition in the strongest terms to any effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or disfavor the private 401(k) system in favor of a government-run retirement security regime.

Similarly, and more recently, the Departments of Labor and Treasury have jointly issued a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options.” While we appreciate the Departments’ seeking guidance and information from all parties and stakeholders in advance of regulatory activity, we strongly urge that the Departments not proceed with any regulation in this area before they have carefully and thoroughly considered all of the information received.

More specifically, we urge that the Departments take no action to mandate that plan sponsors -- often, small businesses -- include a “lifetime income” or “annuitization” option if they choose to offer a 401(k) plan to their employees, or that beneficiaries take some or all of their retirement savings in such an option. Data shows that 70 percent of Americans oppose the concept of a mandated annuity or government payout of their 401(k) plan. On a more fundamental level, Congress should not be in the business of choosing “winners” and “losers” among retirement security stakeholders. Instead, we urge the Departments to make it easier for employers to include retirement income solutions in their savings plans and to help workers learn more about the value of their retirement savings as a source of retirement income. Finally, to the extent new mandates and bureaucratic red tape from Washington push small employers out of the business of offering these plans to their employees, we would submit such an effort weakens, rather than strengthens retirement security.

We appreciate your consideration of our views in these important matters and stand ready to work with you and the Administration to promote secure and adequate retirement savings for all Americans.
The Progressives may find a way to try to shove it though before the election after all they have all of those union pension plans to protect.  

How bad off are the union pension plans? The best single indicator of a plan’s financial health is its Funding Percentage. A fully funded plan will have a funding percentage of 100%. A plan is underfunded when the percentage is below 100%. The lower the percentage, the greater the risk that benefits will not be available when they come due.

According to the Pension Protection Act of 2006 multi-employer (plans set through unions and company sponsors) plans are evaluated via their funding levels. To ensure retiree benefits are protected, when a multiemployer plan falls below certain funding levels, stronger funding requirements become effective under provisions of the Pension Protection Act of 2006. Plans whose funding levels are below 80% are referred to as “endangered,” while those below 65% are referred to as “critical.”


The list of 108 union pension plans below is from the Moody's September 2009 report. The ones in green print are at the endangered level, the ones in red are critical.



.
.
Union Pension Plan% Funded
.
Alaska Hotel & Restaurant Employees Pension Plan 79.70%
.
American Federation of Musicians & Employers Pension 78.90%
.
Teamsters Local 639 Employers Pension Trust 76.10%
.
Producer-Writers Guild of America Pension Plan 75.90%
.
Ohio Operating Engineers Pension Plan 75.70%
.
Laborers District Council and Contractors Pension Fund of Ohio 75.40%
.
Southern Nevada Culinary & Bartenders Pension Trust 75.40%
.
Alaska Electrical Pension Plan 74.30%
.
Alaska Laborers - Employers Retirement Fund 73.70%
.
Electrical Contractors Assoc. of City of Chicago Union 134, IBEW Jt. Pension 2 73.70%
.
Carpenters Retirement Plan of Western Washington 73.10%
.
Automotive Industries Pension Plan 72.40%
.
American Maritime Officers Pension Plan (2005) 72.40%
.
United Mine Workers of America 1974 Pension Plan 72.30%
.
GCIU Local 119B NY Printers League Pension Fund 71.40%
.
National Elevator Industry Pension 71.00%
.
Western Conference of Teamsters 70.60%
.
Newspaper GUILD of NY the New York Times Pension Plan 70.50%
.
Chicago District Council of Carpenters Pension Fund 70.10%
.
District No. 9, IAM and Aerospace Workers Pension 69.70%
.
Rocky Mt. UFCW Unions & Employers Pension Plan 69.50%
.
Hotel/Casino - Summary 69.50%
.
NECA-IBEW Pension Trust Fund 69.20%
.
Central Pension Fund of the IUOE and Participating Employers 69.20%
.
AFTRA Retirement Plan 68.90%
.
Carpenters Pension Trust Fund of St Louis 68.60%
.
MA State Carpenters Pension Fund 68.60%
.
National Automatic Sprinkler Industry Pension 67.80%
.
Midwest Operating Engineers Pension 67.80%
.
Retail Clerks Pension Plan 67.70%
.
Electrical Workers Pension Fund, Local 103, IBEW 67.50%
.
Building Trades United Pension Trust Fund MIL and Vicinity 67.40%
.
CWA/ITU Negotiated Pension Plan 66.80%
.
UFCW Unions & Employers Midwest Pension Fund 66.70%
.
Laborers Pension Fund 66.70%
.
Carpenters Pension Fund of Philadelphia and Vicinity 66.40%
.
UFCW International Union Pension Plan for Employees 66.40%
.
Alaska Teamster-Employer Pension Plan 66.30%
.
Steelworkers Pension Trust (2007) 66.20%
.
Hotel Industry-ILWU Pension Plan 65.70%
.
National Asbestos Workers Pension Fund 65.20%
.
IUOE Stationary Engineers Local 39 Pension Plan 65.20%
.
SEIU National Industry Pension Fund 65.00%
.
Trucking Employees of North Jersey Welfare Fund Inc. Pension Fund 65.00%
.
Massachusetts Laborers Pension Fund 64.70%
.
California Ironworkers Field Pension Trust 64.50%
.
Carpenters Pension Fund of Illinois 64.20%
.
Automotive Machinists Pension Plan 63.80%
.
NJ Carpenters Pension Fund 63.60%
.
The Newspaper Guild International Pension Plan 62.80%
.
Minnesota Laborers Pension Fund 62.40%
.
Bakery & Confectionery Union & Industry International Pension 62.30%
.
Laborers National Pension Fund 62.10%
.
Operating Engineers Pension Trust 61.70%
.
UFCW Unions and Food Employers Pension Plan of Central Ohio 61.30%
.
UFCW Nothern California Joint Pension 61.00%
.
Carpenters Pension fund of Western Pennsylvania 60.80%
.
Newspaper and Mail Delivers - Publishers Pension Fund 60.50%
.
Carpenter Pension Trust for Southern California 60.40%
.
BERT Bell Pete Rozelle NFL Player Retirement Plan 60.00%
.
Major League Baseball Players Pension Plan 59.60%
.
Sheet Metal Workers Pension Plan of S. CA, Arizona and Nevada 59.50%
.
NY District Council of Carpenters Pension Plan 59.30%
.
SO CA UFCW Union Joint Pension 58.40%
.
National Electrical Benefit Fund 58.20%
.
Boilermaker Blacksmith National Pension 58%
.
GCIU-Employer Retirement Fund 57.60%
.
ILWU-PMA Pension Plan 56.90%
.
Masters, Mates & Pilots Pension Plan 56.60%
.
Wisconsin Carpenters Pension Fund 56.50%
.
Electrical Workers Pension Trust Fund of Local Union 58 55.80%
.
Automotive Mechanics Local No. 701 Union Pension Fund 55.60%
.
IB of T Union Local 710 Pension 55.60%
.
Michigan Laborers Pension Fund 55.30%
.
PACE Industry Union-Management Pension Fund 55.20%
.
Pipe Fitters Retirement Fund Local 597 55.20%
.
Sheet Metal Workers Pension Plan of Northern Calif 55.10%
.
Central Pennsylvania Teamsters Defined Benefit Plan 55.10%
.
NY Hotel Trades Council and Hotel Association of NYC Pension Fund 55.10%
.
Teamsters Joint Council No. 83 of Verginia Pension Fund 54.90%
.
National Integrated Group Pension Plan 54.50%
.
Plumbers & Pipefitters National Pension 54.50%
.
Central Laborers Pension Fund 54.20%
.
Iron Workers District Council of Southern Ohio & Vicinity Pension Trust 53.90%
.
Carpenters Pension Trust Fund for Northern California 53.70%
.
Bricklayers & Trowel Trades International Pension Fund 53.60%
.
Western Pennsylvania Teamsters and Employers Pension Plan 53.10%
.
Chicago Newspaper Publishers Drivers Union Pension Trust 52.90%
.
OE Pension Trust Fund 52.40%
.
Indiana State District Council of Laborers & Hod Carriers Pension Fund 51.70%
.
NYS Teamsters Conference Pension & Retirement Fund 51.40%
.
LIUNA National Industrial Pension Fund 50.30%
.
Michigan Carpenters Pension Fund 50.20%
.
Twin City Carpenters Pension Fund 50.20%
.
Laborers Pension Trust Fund for Northern California 50.00%
.
HERE Local 25 and Hotel Association of Washington, DC Pension 49.30%
.
Central States SE&SW 48.50%
.
Teamsters Pension Trust of Philadelphia and Vicinity 48.50%
.
Operating Engineers Local 324 Pension Fund 47.30%
.
Laborers District Council of W. PA Pension Fund 46.80%
.
Iron Workers Local No. 25 Pension Trust Fund 46.40%
.
Local 705 IB of T Pension Trust Fund 46.30%
.
Building Service 32B-J Pension Fund 42.30%
.
Carpenters Pension Trust Fund Detroit & Vicinity 41.40%
.
New England Teamsters & Trucking Industry Pension 40.50%
.
FELRA and UFCW Pension Fund 39.80%
.
Local 804 I.B.T. and Local 447 IAM UPS Multi-employer Retirement Plan 39.70%
.
Sheet Metal Workers National Pension Fund 38.00%


Folks examine these numbers carefully,because one day your pension plans will be bringing these plans to solvency at your expense.




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1 comment:

United Citizens Council said...

The AARP has turned against the old people.