Organized labor now has its sights set on a government take-over of private 401(k) retirement plans in order to bail out underfunded union pension plans.
And, labor apparently has sympathetic ears in the Administration. In February, the White House released its “Annual Report on the Middle Class,” in which Vice President Biden raises the idea of Guaranteed Retirement Accounts (GRAs) to effectively nationalize private retirement plans.
The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary — again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen. This despite data showing that 90 percent of households have a favorable opinion of the existing 401(k)/IRA system.
More from the letter:
In light of these facts, we write today to express our opposition in the strongest terms to any effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or disfavor the private 401(k) system in favor of a government-run retirement security regime.
The federal government should encourage, rather than impede, the use of private voluntary retirement plans.
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