This is because the pension funds running out of money. They have to get a new source of funding, so they are going to get your 401k money.
Hank Kim of the National Conference on Public Employee Retirement Systems is proposing that states, already used to running efficient pension plans, could run private pensions for small employers.
I’m not sure there would be enough time or warning to cash out a 401K if Congress passed a law changing the 401(k) rules to make them GRA’s. So if you think this will happen then get out now. If there is a penalty— Take it!. Otherwise you will lose it all anyway.
And on the other hand, I believe that the Market has come to rely HEAVILY on the bi-weekly infusion of cash from employees paying into their 401(k)’s. By law it has to be invested so that it has the “potential” to earn money. And the markets are the only real choice for that.
Take away that infusion of cash and the Markets are going to go into a tail-spin and they may not pull out of it in time to keep from crashing.