More on the Possible IRA Grab–What the Vision Is and Who’s Behind It

~~By InsightAnalytical-GRL

A few days ago I posted information about a possible IRA grab (See my previous post, The Next Shoe to Drop: IRA Grab Being Set Up NOW–Heads Up! (UPDATE 1X).

Rumors have been flying around about this sort of thing since last year but there may be some movement now.  And since it seems to be a “bipartisan” affair, at least so far, it still may transpire no matter who is controlling the action in Congress.

The information I’ve found is by no means comprehensive, but it does offer a start at figuring out who’s behind this.  The actual idea may not actually be a bad one, but the devil is in the details, of course!  And who actually gets control of handling those details is another thing to watch out for!

The background…

In March 2009, a group called “Retirement USA” launched efforts to create a “universal, secure and adequate retirement for all Americans.”

Here’s a section of the “Preamble to the Principles for a New System”:

Underlying the principles we are putting forward today are the following shared beliefs:

  • Social Security is the cornerstone of American retirement security. The current economic crisis and the resulting decline in individual retirement savings, combined with the continuing disappearance of defined benefit pension plans, are powerful reminders of the importance of Social Security. Social Security must be preserved and strengthened.
  • Defined benefit pension plans remain the soundest vehicles for building and safeguarding retirement income security. We must make every effort to stabilize these plans and encourage employers to offer and maintain them.
  • We must strengthen worker protections for 401(k) and other defined contribution plans, which help millions of Americans build retirement savings.

While we remain committed to preserving and improving those current pension and 401(k) plans that are providing adequate and secure benefits for workers, we cannot ignore the fact that the current system – regardless of how many changes are made – will remain inaccessible, inadequate and/or insecure for millions of workers. Therefore, we must begin a dialogue now about the type of retirement system we need for the future.

We are not here today to endorse any particular system, but to offer the following set of principles as guideposts against which all proposals should be evaluated.

The Preamble includes a link to a page entitled Making the Case for a New System” which breaks down the data showing the need for another retirement stream/tier to augment the cornerstone proved by Social Security.

Retirement USA also states:

  • Retirement USA has developed 12 Principles for a New Retirement System, which provide a framework for a system in which employers, workers, and the government would share the responsibility for the retirement security for all American workers.
  • Retirement USA has issued a call for the submission of “visionary” proposals for a future private retirement income program. Selected proposals were presented at a Re-Envisioning Retirement Security conference in Washington, D.C. on October 21, 2009.

So far so good, as far as intentions go.

So who is actually part of this group?  As listed in the March 9, 2009 launch press release, “experts from the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare, the Pension Rights Center, and the Service Employees International Union launched Retirement USA. (A contributor to the TIAA-CREF policy brief below also mentions the AFL-CIO as one of the convening parties.)

A list of the speakers at the launch and an audio of the press conference are available at the above link.  I know that when I see SEIU involvement these days, my attention is aroused…

The Pension Rights Center maintains the Retirement USA site.  If you visit The PRC site itself, you’ll find a policy brief from December 2009 that was issued by the TIAA-CREF Institute entitled “Perspectives on Retirement Reform for the 21st Century.”  Five experts proved individual essays on the issue after the Exectutive Summary (my highlighting):

This Policy Brief provides essays from five experts in retirement research and policy analysis
offering their perspectives on worthwhile reforms to the U.S. retirement system. The authors
agree that retirement system reforms are needed to ensure that future generations of American
workers have a high likelihood of an adequate and secure retirement income. In particular, the
consensus view is that the current system tends to place too much responsibility and risk on
households for generating and managing retirement resources. Various reforms are suggested
that would encourage retirement income adequacy while providing more efficient risk
management and a more equitable distribution of retirement risk burdens.

I recommend scanning these essays, and particularly the one pn pages 7-8 by Alice H. Munnell entitledBigger and Better: Redesigning Our Retirement System in the Wake of the Financial Collapse.”


Now, who is the Republican joining Democratic Senators Jeff Bingaman and Herb Kohl to push this idea?

Senator Johnny Isakson of Georgia used to be a pro-choice Republican until he went the usual route to being anti.  See his bio here.

More recently, remember the flap when voluntary end-of-life planning counseling sessions were proposed as a Medicare benefit and the far right talkers and Sarah Palin, Glenn Beck and Newt Gingrich got hysterical about “death panels”?

Isakson was a co-sponsor of this amendment and in an interview with Ezra Klein in the Washington Post (8/10/2009), Isakson explained his interest in this area and had some strong opinions about Palin et al. Here’s an excerpt from “Is the Government Going to Euthanize your Grandmother? An Interview With Sen. Johnny Isakson:

How did this become a question of euthanasia?

I have no idea. I understand — and you have to check this out — I just had a phone call where someone said Sarah Palin’s web site had talked about the House bill having death panels on it where people would be euthanized. How someone could take an end of life directive or a living will as that is nuts. You’re putting the authority in the individual rather than the government. I don’t know how that got so mixed up.

You’re saying that this is not a question of government. It’s for individuals.

It empowers you to be able to make decisions at a difficult time rather than having the government making them for you.

The policy here as I understand it is that Medicare would cover a counseling session with your doctor on end-of-life options.

Correct. And it’s a voluntary deal.

It seems to me we’re having trouble conducting an adult conversation about death. We pay a lot of money not to face these questions. We prefer to experience the health-care system as something that just saves you, and if it doesn’t, something has gone wrong.

Over the last three-and-a-half decades, this legislation has been passed state-by-state, in part because of the tort issue and in part because of many other things. It’s important for an individual to make those determinations while they’re of sound mind and body rather than no one making those decisions at all. But this discussion has been going on for three decades.

And the only change we’d see is that individuals would have a counseling session with their doctor?

Uh-huh. When they become eligible for Medicare.

Are there other costs? Parts of it I’m missing?

No. The problem you got is that there’s so much swirling around about health care and people are taking bits and pieces out of this. This was thoroughly debated in the Senate committee. It’s voluntary. Every state in America has an end of life directive or durable power of attorney provision. For the peace of mind of your children and your spouse as well as the comfort of knowing the government won’t make these decisions, it’s a very popular thing. Just not everybody’s aware of it.

What got you interested in this subject?

I’ve seen the pain and suffering in families with a loved one with a traumatic brain injury or a crippling degenerative disease become incapacitated and be kept alive under very difficult circumstances when if they’d have had the chance to make the decision themself they’d have given another directive and I’ve seen the damage financially that’s been done to families and if there’s a way to prevent that by you giving advance directives it’s both for the sanity of the family and what savings the family has it’s the right decision, certainly more than turning it to the government or a trial lawyer.

Still sounds perfectly sane to me.  I’ve already set up my own directives as part of my will.  (By the way, even Rep. Ginny Brown-Waite (R-FL), who had said that the health care reform told seniors to “drop dead,” rejected the Palin/Beck/Gingrich stuff as “scare tactics.”)

So, we’ve at least got a seemingly sane Republican (at least on this issue) in the mix along with a couple of entrenched Democrats or whatever they are these days.

HOWEVER….there’s no guarantee that  this idea of creating another piece of the retirement income stream for Americans will be hunky-dory!  To me, it has the eerie feel of Medicare Part D, which was supposed to help with drug costs but is basically a shell game with Big Pharma and insurance companies coming out ahead all the way (and I speak from experience on this one…that donut hole comes awful fast!)  This time around Big Insurance, including AIG are in the mix.  Not to mention AARP, a little insurance center of its own.

So, we’ll have to watch to see how all this develops…if it develops.