Nancy Thorner Aug. 8, 2013, 11:34am

Could government mandated guaranteed retirement accounts (GRAs) be in Illinois' future?

Disturbing information that could one day affect all private sector employees was discussed a month or so ago on Fox’s Neil Cavuto (with Stewart Varney) and later in the day on Special Report with Bret Baier.

The California state legislature is pushing a new plan, called “Secure Choice Retirement Savings Program,” which will require private-sector employers to extract 3 percent of every employee’s paycheck and send it to the state cofferseven though the employee may choose not to participate.

The money would be put into a state fund with a guarantee – oh, we promise, promise, promise! – that all funds will be invested and you will get your money, plus gains, back at your retirement age.

California's plan is yet another way to look for a way to open the door to grab your personal income and force you to ‘save with the state’ – whether you want to or not. Employers who do not send in this 3 percent requirement would be penalized $250 for each employee.

The program is supposed to supplement Social Security and provide forced retirement savings for workers who do not have access to a retirement program with their current employer, or who have chosen not to take their employer’s offered retirement program. Whether or not the individual may wish to participate, it would amount to a forced, no-choice 3 percent deduction out of every paycheck.

California's proposal is the first-in-the-nation law at the state level, but of course other states have shown interest in it, as well as our politicians in Washington, DC. California's program must have approval from the IRS and the U.S. Labor Department before it can be enacted, but quick and easy approval is expected. Once these approvals have been made, California can vote on the program, probably by next year.

As far back as October of 2008, the federal government has been exploring ways to stem losses by workers and retirees who were losing money from their 401Ks and IRA accounts due to unemployment and the bad economy.  At the 2008 hearing of the House Committee on Education and Labor, Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, proposed mandatory participation in a government-run savings plan to which each citizen would contribute 5 percent of his salary, to be administered by the Social Security Administration, but separate from a citizen's social security account.

The issue came up again in October of 2010 in another hearing, this time by the Senate Health, Education, Labor and Pensions Committee.  Ms. Ghilarducci, again a witness, proposed the same plan she advanced at the 2008 House hearing.  At that time, there was no follow through, but the concept of financial confiscation was not forgotten.

It was on April 10 when President Obama released his FY $3.77 trillion budget proposal.  Under current law, Americans who save money in tax-deferred retirement accounts are taxed on the money when they withdraw it.  An additional tax penalty is imposed if withdrawal is made before retirement age.

Obama's proposal would limit an individual's total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement.  First Obama decides you're wealthy if you make $250,000 or more.  Now, he's telling you how much you can have to live on in your retirement.  What will he do with the rest of it?  Tax it, of course!

In addition, the ideas from Richard Cordray, Director of the Consumer Financial Protection Bureau for “helping you manage your savings” and Jesse Jackson’s suggestion to use your savings to make loans to low-income groups, show the variety of politicians who are interested in relieving you of your hard-earned savings.

The federal and many of the state governments are desperate for money. They've gotten us into a huge mess of debt and overspending and are determined to find money anywhere they can.  They are drooling to confiscate, attach, grab and otherwise latch onto your personal savings and incomes. These governments also have their union buddies who are demanding payback for getting them elected.  The unions want this money to back up and support their own very expensive pensions, retirements and health care plans.

We can now see there are multiple agencies who have their eyes on the estimated $20 trillion in American savings:  a ‘Social Security’ type savings account, a Presidential limit on how much you deserve to have for retirement, elimination of the tax-deferred status of savings accounts, government help in managing your money, using savings accounts to make loans to low-income groups and now California’s punitive, enforced savings – like it or not.  They are coming at us from many directions in an effort to find an opening to put their foot in the savings doorway.

When senators and representatives and states see billions and billions of dollars sitting out there in investment and savings accounts, it is not difficult to imagine what they thinking of  -  YOUR MONEY.

If you think this can't happen, you haven't been paying attention.  California's Secure Choice Retirement Savings Program proposal should serve as an eye-opener, as it represents appealing legislation that could be rammed down the throats of Illinoisans.

If you care about your money, and object to either Illinois or the federal government latching onto your personal savings and incomes, then pick up the phone and do something about it by calling both your state and federal representatives.  Tell them not to monkey around with your money.

For Californians, if you allow this to happen you are total idiots!

For more insight, a must read is an article that appeared February 22, 2013 at the American Thinker by John White, The Feds Want Your Retirement Account.  The first paragraph of John White's article should be enough to convince you to check out his comments:

Quietly, behind the scenes, the groundwork is being laid for federal government confiscation of tax-deferred retirement accounts such as IRAs.  Slowly, the cat is being let out of the bag.

Nancy Thorner, of Lake Bluff, Ill., is an avid musician and prolific writer on topics related to energy, health care and tax policies.


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