A pretty good article. It falls in line with what I have been seeing for some time now.
I still believe though that we will see in the near future, (within a year), the concerted effort of the Federal Government appropriating all of the 401K’s. There is just too darn much money sitting there.
And it is my belief that the bi-weekly influx of money from our paychecks into the 401K’s and passed on into the stock and bond markets are a driving force in the continuing strength of Wall Street.
The Government wants that money in their hands and under their total control. I just wonder how hard the Wall Street types are going to fight to keep that money flowing into the financial system that they are the heads of?
Of course the real loser is the person who just wants to prepare for their retirement and is willing to fund it their self.
I agree that the government will try to grab the money for some sort of "Social Security II" program, but they will be in for a nasty surprise if they do.
The problem is that my guess for the reason why in this article companies are trying desparately to pursuade former employees to keep their 401Ks with them is because the company owes matching funds on those accounts. In many cases I bet they haven't really made those payments, they've just pulled the same trick the government does with your SS fund contributions - they just filled the account with IOUs.
When someone closes their 401K account to roll over into an IRA, the company then has to cough up hard cash. If this is true, we're going to find the same problem if the government tries to sieze all 401Ks. The matching funds are not there, and corporations will go bankrupt trying to meet that mass obligation.
Or not.