‘Kiss your pension fund goodbye’? Economist warns government could seize 401(k)s

Economic Collapse News ^ | 25 May 2015 | Andrew Moran

[SkyPilot]

The United States government could start seizing 401(k) plans, says one economist who believes a recent Supreme Court ruling sets the stage for Washington to initiate any such plans.

Economist Martin Armstrong published a blog post Monday that took a look at the recent Tibble v. Edison case. The court concluded that employers have an obligation to protect their workers’ 401(k) plans from mutual funds that provide deplorable returns. Armstrong thinks this could give the federal government the arsenal to begin seizing private funds and take companies to court if mutual funds perform poorly. This comes as the Obama administration has attempted to battle Wall Street brokers who peddle certain retirement investments that may prove to be a conflict of interest.

Here is what Armstrong, who reportedly predicted the ’87 crash and 1990s Russian economic collapse, wrote in his article:

“This comes just in time for then the next step is government to seize private funds and prosecute employers who choose badly a fund manager. This fits perfectly just in time for the Obama administration’s next assault as they prepare a landmark change of its own by issuing rules requiring that financial advisers put the interest of customers ahead of their own. This creates a very gray area wide enough to justify public seizure of pension funds under management.”

He added: “Between the court ruling and the Obama administration’s push for stronger fiduciary rules send a strong message that government can much easier seize the pension fund management industry of course to ‘protect the consumer.'”

[SkyPilot]

Members of Congress, as a group, are the biggest Insider Traders on the planet. Both parties.

If any ordinary American did what they did, they would be in prison. Congress is "too good" for that lousy $174,000 to $194,000 salary per year, and that is their mindset.

Congress, Judges, and govt officials also participate in the Thrift Savings Plan (TSP), which is a matching program invested in various ways. Three times since 2008, the Treasury has cited "extraordinary circumstances" and "borrowed" from the hundreds of billions there. They have "paid it back" after the government shutdowns were over, but it is all smoke and mirrors.

The seizure of all retirement accounts will probably occur in the midst of a global crisis. I see one coming, and this time, every economist who is not mentally deranged sees no safety valves or exits available this time that were available in the past.

They will have have very few options, and if people think they are going to just "leave my retirement alone" because that's what they wish to happen, it is they who are living in the Matrix.

[redfreedom]

The 18 Trillion, or whatever it actually is, is deplorable. I believe we were in much better shape, if not out of debt during the Clinton years thanks to the Republican Congress and Reaganomics. Then one of the biggest GOPe socialists, Bush, and our Marxist socialist you know who made it worse.

Socialists love other peoples money.

The US private retirement system (401K & IRA) is valued somewhere around 22 trillion.

In theory, this is a perfect match, just taxing the hell out of private pensions to pay off the debt. If they did it and got by with it, most if not all of that money would never be applied to the national debt, it would be for some new program.

The gimme gimme, now now crowd would still be angry like spoiled babies wanting more candy, and those that got their hard earned pension money robbed would be extremely pissed. Add to this obabma’s kids claiming it’s racist not to give them whitey’s retirement money, and we have CWII.

There are three very heavily armed groups in the US: The US Military, the police forces, and the conservative citizens. All three groups are currently pissed off at the regime. CWII would be over in a heartbeat. All of the pent up anger inspired by the regime would create a backlash fury never seen before.

But we are so heavily armed unlike Cypress or other defaulting nations such as Greece and Spain, I just don’t think it will happen.

I think Cruz is our best bet.

[2001convSVT]

” “You’ll have Civil War II if that happens.” “

“One would expect.”

That is if there were any 401k's to confiscate, last I read 47% of people have no money saved for retirement and of the ones that do the average is less than $50,000.

[Whenifhow]

Cash will be eliminated very soon, perhaps sooner than anyone imagined. Already, withdrawls of cash (even a few thousands) will be reported to the authorities by the banks and your every move will be closely monitored.

___________
Ohio Ping - FYI

See article post #1 and #2 as well as other comments.

This administration has all the legislative and executive pieces in place for complete tyrannical totalitarianism.

One Step Away from a Dictatorship: “The Groundwork and Foundation Have Been Put Into Place”
http://www.freerepublic.com/focus/f-news/3292430/posts

[FourtySeven]

I have no doubt Jesus is returning but His Return in Glory has absolutely nothing to do with any economic collapse that may happen. (I also don’t doubt the U.S. Economy will collapse and probably soon).

The two have absolutely nothing to do with each other. I seriously doubt Jesus is up in Heaven saying to His Father, “Hey Dad, the U.S. Economy is about to collapse I guess I’m heading back in soon huh?”

The very suggestion that His Return is linked to economic collapse is almost blasphemy in my opinion. The economy is going to collapse this is certain but there will be many disillusioned people who tie His Return into such a collapse. And their faith will suffer for it as He does NOT return simply because the dollar becomes worthless.

[Publius]

That’s called “structuring,” and it’s a felony.

[SumProVita]

So what is the best way to withdraw money from an account in the form of cash?

Also, does this apply with selling stock?

[It’s absolutely UNREAL that we no loner have power over the very money that WE earned lawfully.]

[Publius]

Stock sales and purchases are fully electronic. Your stocks are now electronic. The electronic stock is sold and turned into electric money which remains electronic as it goes to your receiving account at a bank. Or it comes to you as a check, in which case the electronic money becomes a paper instrument representing electronic money.

If you attempt to withdraw cash from your bank account, if it's over $3000 in one fell swoop, or if it's taken as increments that add up to $3000 over a certain length of time, the bank will report you to the IRS.

[johniegrad]

Scripture prophesies the government absconding with my investments?

[sport]

I cant say about the Scriptures, but the Democrat Party does.

[SkyPilot]

Here is what I believe (I am being completely honest with my opinion here):

- Scripture never uses the terms "global currency" or "one world government", but it is very clear that those two entities will be in place at some point

- Revelation 13: 16-17 also makes it clear that all people on the entire earth (rich, poor, powerful, lowly) will be in economic slavery to the Anti-Christ system

Money is power. It allows freedom to do certain things, or to live life a certain way. It also frees us from the power of government to a degree. Example: if you are a Billionaire you are not subject to the same rules and restrictions regarding your health care options, you have security against inflation adjustments, etc.

The every invasive global government that is all around us cannot afford to have people independent of its leash, and in fact, the Bible is clear that all of humanity will one day be in economic slavery to such a degree that all humans will be physically marked on their bodies in order to participate in the market system.

That "system" includes my investments, yours, and everyone else. No one will be allowed to operate independently. Moreover, I see a massive global meltdown coming. There is no feasible way they will pass up trillions in retirement accounts when push come to shove. No....way.

When I look at the world around me, this is what I see: Israel back in their land, the world coming against Israel, wickedness and evil growing ever increasingly bold, persecution of Christians worldwide on a massive scale, a tangible attempt by banks and governments to eliminate all forms of cash, explosion in knowledge and transportation (Daniel 12:4), violence and sexual immorality, increase in natural disaster, increase in war around the globe, a falling away from true doctrine (2 Timothy 4:3-4), and much, much more.

If you are putting your trust in "your" money and investments alone, you are without God's protection. Those electrons in cyberspace can be seized, manipulated, and eliminated.

I put my trust in the only person who can and will help me, and who cannot be defeated. Jesus Christ.

[SumProVita]

...or if it’s taken as increments that add up to $3000 over a certain length of time...

_________________________________

OK....what would that length of time be then?

[Publius]

I don’t have the answer to that.

[SumProVita]

I should add here that, in the event of economic collapse [which I believe we will see], our cash will only have value for a very short period of time.

[SumProVita]

You cannot go wrong with that SkyPilot. :-)

[SumProVita]

I wonder where I could find that? Any ideas?

[Publius]

You’ll probably have to research the law.

[onyx]

PLEASE MAKE YOUR DONATION!
PLEASE GO MONTHLY IF YOU POSSIBLY & RELIABLY CAN!!!

KISS YOUR PENSION FUND GOODBYE; PLEASE READ ALL! Warnings such as these have been sounded in the past six years, but a recent SUPREME COURT RULING paves the way for massive income 'REDISTRIBUTION'. In your post-Constitutional world, YOUR SAVINGS becomes that of the government's to distribute as THEY SEE FIT. Economist Martin Armstrong warned that a Supreme Court ruling last week has set the stage for the federal government to begin seizing private pension funds.

From his blog: Armstrong Economic:

KISS YOUR PENSION FUND GOOD-BYE

I have been warning for some time that government was eyeing up pensions.The amount in private pension funds is about $19.4 trillion. The question that has been debated in secret behind the curtain is how to justify to the people taking that over. I have been warning that if this is seized by government, it will come after 2015.75. Just how that is to be accomplished was finally settled by the Supreme Court without any justification constitutionally.

The US Supreme Court ruled last week in the unanimous, 8-page decision in Tibble v. Edison holding that employers have a duty to protect workers in their 401(k) plans from mutual funds that are too expensive or perform poorly. That is simply astonishing since there is no constitutional requirement for even government to provide social benefits. The Supreme court held in HARRIS v. McRAE, 448 U.S. 297 (1980) it was explained that the constitution is negative not positive. There is no duty imposed upon the state to provide a program for that would convert the constitution from a negative restrain upon government to a positive obligation to provide for everyone.

If we take the fact that the constitution is NEGATIVE and was a restrain upon government, then this latest ruling is completely unfounded. Monday’s unanimous ruling sends a warning to employers that they now must improve their plans and it is now an obligation to project employees. This comes just in time for then the next step is government to seize private funds and prosecute employers who choose badly a fund manager. This fits perfectly just in time for the Obama administration’s next assault as they prepare a landmark change of its own by issuing rules requiring that financial advisers put the interest of customers ahead of their own. This creates a very gray area wide enough to justify public seizure of pension funds under management.

This ruling will have a dramatic impact upon investment management and we have already received calls asking about using our model for management purposes since it has one of the longest track records that can be verified in the industry. What this ruling imposes is a tremendous duty upon the plan fiduciary who must now back up his decision with proof. This may also have the impact of foreclosing new fund managers from entering the business since they will lack the track record.

Yet this decision is even deeper. It sets the stage to JUSTIFY government seizure of private pension funds to protect pensioners. When the economy turns down and things get messy, they are placing measures in place to eliminate money in and physical dimension, closing all tax loopholes, shutting down the world economy with FATCA, and preparing for the final straw of Economic Totalitarianism with the Supreme Court reversing its entire construction of the Constitution to impose a duty upon employers to ensure the 401K plans perform in a world where interest rates are going negative. You really cannot make up this level of insanity.

The message here is not that all 401(k)s are bad or too expensive. In fact, costs have fallen 30 percent over the past decade as more plan sponsors turn to low-cost passive investing options. But this can be highly dangerous for to lower costs they turn to government debt where there is no need for fund management decisions. Yes, when I did hedge fund management, the cost was 5% annually plus 20% performance. That cost went to staff around the world that had to monitor positions and the world economy on a 24 hours basis. You paid also NOT to trade for most losses took place when traders were bored are would trade to try to make money when there was nothing to be done. Our track record was the best ever in the industry with the lowest drawn down perhaps in fund management. But that risk reduction cost money.

Today, costs vary widely. Plans with more than $100 million in assets usually have total annual costs below 1% whereas the biggest plans usually are below 0.50%. In small plans, the costs can be as high as 2% today. The focus is now on cost – not performance.

Financial service companies can charge a range of management, administrative, marketing, distribution and record-keeping fees for 401(k) plans. Plan sponsors can assume the costs, but employees are paying at least 85% of all fees typically. It is true that most workers do not know they pay the bulk of the share of costs. A 2011 AARP survey found that 71% of retirement savers do not think they pay any investment fees at all. It is true that the fees make a huge difference in returns over time. However, this drive to lower costs has also lowered the quality of funds management.

The U.S. Department of Labor estimates that a 1% point difference on a current account balance of $25,000 will reduce total accumulations by 28% over 35 years, assuming average returns of 7% and no further contributions. The focus is all on these management fees without any consideration of the problem. Trying to manage money varies according to the size of the fund. The more you gather, often the lower the performance because the markets are not unlimited. You can pick up the phone and say “sell at the market” when you have a $100 million fund, you cannot do that with a $100 billion fund. So the management fee was also a means to reduce the number of clients and it was never a question of unlimited capacity to trade. The numbers on performance would decline with greater amounts of money under management for the manager lost flexibility.

The Supreme Court case clearly shows that lack of understanding of the industry yet the battle centered on the 401(k) plan’s use of retail-class mutual funds when less-expensive institutional shares were available. The difference between those classes typically is 25 basis points. This will now put pressure on large plans to cut costs further but will not have much impact on smaller plans. That is because big plans have the buying power to negotiate better deals but at the same time they are the easy target for lawyers making them much more attractive targets for litigation.

Cutting management fees to the bone may in fact set the stage for massive losses for many of the older better traders are now just resigning. The quality of the funds management is more likely than not going to decline noticeably.

Between the court ruling and the Obama administration’s push for stronger fiduciary rules send a strong message that government can much easier seize the pension fund management industry of course to “protect the consumer”.

PLEASE MAKE YOUR DONATION!
PLEASE GO MONTHLY IF YOU POSSIBLY & RELIABLY CAN!!!

KISS YOUR PENSION FUND GOODBYE; PLEASE READ ALL! Warnings such as these have been sounded in the past six years, but a recent SUPREME COURT RULING paves the way for massive income 'REDISTRIBUTION'. In your post-Constitutional world, YOUR SAVINGS becomes that of the government's to distribute as THEY SEE FIT. Economist Martin Armstrong warned that a Supreme Court ruling last week has set the stage for the federal government to begin seizing private pension funds.

From his blog: Armstrong Economic:

KISS YOUR PENSION FUND GOOD-BYE

I have been warning for some time that government was eyeing up pensions.The amount in private pension funds is about $19.4 trillion. The question that has been debated in secret behind the curtain is how to justify to the people taking that over. I have been warning that if this is seized by government, it will come after 2015.75. Just how that is to be accomplished was finally settled by the Supreme Court without any justification constitutionally.

The US Supreme Court ruled last week in the unanimous, 8-page decision in Tibble v. Edison holding that employers have a duty to protect workers in their 401(k) plans from mutual funds that are too expensive or perform poorly. That is simply astonishing since there is no constitutional requirement for even government to provide social benefits. The Supreme court held in HARRIS v. McRAE, 448 U.S. 297 (1980) it was explained that the constitution is negative not positive. There is no duty imposed upon the state to provide a program for that would convert the constitution from a negative restrain upon government to a positive obligation to provide for everyone.

If we take the fact that the constitution is NEGATIVE and was a restrain upon government, then this latest ruling is completely unfounded. Monday’s unanimous ruling sends a warning to employers that they now must improve their plans and it is now an obligation to project employees. This comes just in time for then the next step is government to seize private funds and prosecute employers who choose badly a fund manager. This fits perfectly just in time for the Obama administration’s next assault as they prepare a landmark change of its own by issuing rules requiring that financial advisers put the interest of customers ahead of their own. This creates a very gray area wide enough to justify public seizure of pension funds under management.

This ruling will have a dramatic impact upon investment management and we have already received calls asking about using our model for management purposes since it has one of the longest track records that can be verified in the industry. What this ruling imposes is a tremendous duty upon the plan fiduciary who must now back up his decision with proof. This may also have the impact of foreclosing new fund managers from entering the business since they will lack the track record.

Yet this decision is even deeper. It sets the stage to JUSTIFY government seizure of private pension funds to protect pensioners. When the economy turns down and things get messy, they are placing measures in place to eliminate money in and physical dimension, closing all tax loopholes, shutting down the world economy with FATCA, and preparing for the final straw of Economic Totalitarianism with the Supreme Court reversing its entire construction of the Constitution to impose a duty upon employers to ensure the 401K plans perform in a world where interest rates are going negative. You really cannot make up this level of insanity.

The message here is not that all 401(k)s are bad or too expensive. In fact, costs have fallen 30 percent over the past decade as more plan sponsors turn to low-cost passive investing options. But this can be highly dangerous for to lower costs they turn to government debt where there is no need for fund management decisions. Yes, when I did hedge fund management, the cost was 5% annually plus 20% performance. That cost went to staff around the world that had to monitor positions and the world economy on a 24 hours basis. You paid also NOT to trade for most losses took place when traders were bored are would trade to try to make money when there was nothing to be done. Our track record was the best ever in the industry with the lowest drawn down perhaps in fund management. But that risk reduction cost money.

Today, costs vary widely. Plans with more than $100 million in assets usually have total annual costs below 1% whereas the biggest plans usually are below 0.50%. In small plans, the costs can be as high as 2% today. The focus is now on cost – not performance.

Financial service companies can charge a range of management, administrative, marketing, distribution and record-keeping fees for 401(k) plans. Plan sponsors can assume the costs, but employees are paying at least 85% of all fees typically. It is true that most workers do not know they pay the bulk of the share of costs. A 2011 AARP survey found that 71% of retirement savers do not think they pay any investment fees at all. It is true that the fees make a huge difference in returns over time. However, this drive to lower costs has also lowered the quality of funds management.

The U.S. Department of Labor estimates that a 1% point difference on a current account balance of $25,000 will reduce total accumulations by 28% over 35 years, assuming average returns of 7% and no further contributions. The focus is all on these management fees without any consideration of the problem. Trying to manage money varies according to the size of the fund. The more you gather, often the lower the performance because the markets are not unlimited. You can pick up the phone and say “sell at the market” when you have a $100 million fund, you cannot do that with a $100 billion fund. So the management fee was also a means to reduce the number of clients and it was never a question of unlimited capacity to trade. The numbers on performance would decline with greater amounts of money under management for the manager lost flexibility.

The Supreme Court case clearly shows that lack of understanding of the industry yet the battle centered on the 401(k) plan’s use of retail-class mutual funds when less-expensive institutional shares were available. The difference between those classes typically is 25 basis points. This will now put pressure on large plans to cut costs further but will not have much impact on smaller plans. That is because big plans have the buying power to negotiate better deals but at the same time they are the easy target for lawyers making them much more attractive targets for litigation.

Cutting management fees to the bone may in fact set the stage for massive losses for many of the older better traders are now just resigning. The quality of the funds management is more likely than not going to decline noticeably.

Between the court ruling and the Obama administration’s push for stronger fiduciary rules send a strong message that government can much easier seize the pension fund management industry of course to “protect the consumer”.

[SkyPilot]

Lol.

[SumProVita]

Ok...thanks.