The original plan from Teresa Ghilarducci and sourced here states the following in page 13, right hand column.
Accumulations in 401K and other retirement plans that exist before the bill goes into effect will be treated under old tax rules.
FWIW. You know they'd love to get their hands on all of it if they could but even THEY probably understand the uproar that would result from almost all sectors.
In my previous post (#201), I included a link to Ms. Ghilarducci’s testimony in the hearing.
In that hearing, she specifically calls for an option for any existing 401k/IRA to be converted to the ‘new account’ using August, 2008 valuations. Perhaps the initial plan may only make it ‘optional’, but Congress can easily go from ‘optional’ to ‘mandatory’ once they see how the markets react to this initial footprint.
As for myself, I am thinking it will go ‘mandatory’ from the outset.
The bottom line is that the Dems know very well that the tremendous success of 401k/IRAs led to the calls for privatizing social security two years ago, and they are using this downturn to kill off these private retirement plans.