Dr. Jerome R. Corsi / WND
NEW YORK – The unanimous Supreme Court decision in Tibble v. Edison has once again stoked ongoing fears in the financial services industry that the Obama administration might be preparing for a takeover of private retirement savings.
Some economists believe the court decision sets the ground for the administration to begin nationalizing 401(k) retirement savings plans under the banner of protecting individuals from predatory financial planners. The administration has in mind planners who recommend mutual fund investments on which they receive excessive commissions and fees, which curbs an investor’s gains during the 401(k)’s tax-deferred accumulation phase.
Yet most economists read Tibble much more narrowly. They argue that the justices’ only concern is that an objective methodology be implemented that forces financial planners to make recommendations on the basis of performance, avoiding mutual funds with high loads and fees that benefit financial planners unreasonably.
Is Obama planning to grab your 401(k)?
Economist Martin Armstrong, writing on his blog ArmstrongEconomics.com, asserted the Tibble decision “sets the stage to justify government seizure of private pension funds to protect pensioners.” He noted that 401(k) plans are part of the private pension market he estimates currently totals about $19.4 trillion.
Clearly the size of the retirement savings market is attractive to a federal government at a time when the federal deficit has increased some 80 percent in the past six years, with the federal debt now totaling more than $18 trillion.
An Investment Company Institute report published March 25 suggests the U.S. private retirement savings asset market may be even larger than Armstrong estimates. The ICI pegs total U.S. retirement assets at $24.7 trillion as of Dec. 31, 2014, with IRA assets estimated as $7.4 trillion and 401(k) assets at $4.6 trillion of that accumulated total.
The fear that the Obama administration may seek to grab private retirement assets is not entirely unjustified, as WND has reported. In 2010, the Obama administration began exploring strategies that would require hundreds of billions of dollars in programs such as 401(k)s and Individual Retirement Accounts, IRAs, to invest in U.S. Treasury bonds. The aim would be to lock in secured maturity values while providing the federal government a means of funding the $1.5 trillion a year needed to keep the government operating under the federal budget deficit estimated by the Congressional Budget Office.
In 2012, WND reported that in its annual budget proposal, the Obama administration endorsed “Automatic IRAs,” a plan introduced into Congress by Sens. John Kerry, D-Mass, and Jeff Bingaman, D-N.M. According to the plan, private companies would be automatically enrolled in government-mandated IRAs, forcing those businesses to contribute on behalf of their employees a “default amount” equal to 3 percent of an employee’s pay, unless the employee specifically opts out of the plan.
Earlier this year, WND reported the concern expressed by Rush Limbaugh that Obama intends to extract money from private retirement accounts. He cited the White House’s proposed fiscal year 2016 budget as proof Democrats have a plan to tax retirement accounts as a means of funding the administration’s ever-expanding social welfare, including services for the estimated 5-6 million illegal immigrants given “deferred deportation” under Obama’s executive actions.
Supreme Court disciplines financial planners
Columnist Chuck Jaffe, writing in MarketWatch.com, said the Supreme Court’s reasoning in Tibble is a simple idea that impacts all retirement savers.
“Workers should have access to the best fee structures available for their retirement plan,” he said. “The company providing or overseeing the plan has a responsibility to employees to make sure that the investments – and most importantly the fee structure on the plan – is the best available.”
There is no absolute proof any of the above is going to happen, because that’s always been the way government’s work. When it happens we will not see it coming until we wake up some day and smell the shit on the fan. Pass this info to your broker – accountant – or whatever their called and watch his reaction. All of them will deny that snow is cold, or governments go broke. This has been going on in the EU and it will come here just as sure as ice melts in your hand. HEADS UP FOLKS!