The Treasury Is Soliciting Your Feedback Regarding The Proposed Annuitization Of 401(k)

Tyler Durden's picture

Yes, slowly but surely it is happening. In a federal notice filed earlier, the DOL and Treasury are soliciting a response on what has been on many investors' mind, namely the process of converting 401(k)s into annuity-like products. To wit:

The Department of Labor and the Department of the Treasury (the "Agencies") are currently reviewing the rules under the Employee Retirement Income Security Act (ERISA) and the plan qualification rules under the Internal Revenue Code (Code) to determine whether, and, if so, how, the Agencies could or should enhance, by regulation or otherwise, the retirement security of participants in employer-sponsored retirement plans and in individual retirement arrangements (IRAs) by facilitating access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement. The purpose of this request for information is to solicit views, suggestions and comments from plan participants, employers and other plan sponsors, plan service providers, and members of the financial community, as well as the general public, on this important issue.

A cursory read of the document does not seem to ask about a flat out regulatory requirement for annuitization. We point your attention to item 13:

13. Should some form of lifetime income distribution option be required for defined contribution plans (in addition to money purchase pension plans)? If so, should that option be the default distribution option, and should it apply to the entire account balance? To what extent would such a requirement encourage or discourage plan sponsorship?

For readers who feel compelled to respond to this increasignly socialistic and ludicrous development, we suggest you voice your anger at the following address:

  • Include RIN 1210-AB33 in the subject line of the message

Full notice:


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10044's picture

Let the looting begin

Daedal's picture

What's yours is mine, baby! Please get a new job, you're paying for 2.

docj's picture

Well, this ought to help fix that pesky bear-market rally anomaly we've been seeing.

Gold...Bitches's picture

Wait til they wrap it in patriotism and the flag.  It'll happen

dumpster's picture

hand it all over  ,, we be the guardians of cradle to grave goodness,

bend over stick out your a-- and go augh .

buzzsaw99's picture

Dear usa treasury: EAT SHIT AND DIE!!

Anonymous's picture

then they need to ROT IN HELL!

LoneStarHog's picture

Not just no, but HELL NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

crosey's picture

As Rahm expressed, never waste a crisis.

Another step in the slow grind toward a sad statist existence.  Not bad, if you're the one in power.

America, will you let them take it all away from you?

Anonymous's picture

Ah, yes. The dreaded Statist experience. As if the current global system is so fantastic. Wal-Mart/Tesco/Goldman Sachs/McDonalds on every street corner while the peasants wear H&M Clothing. Absolutely dreadful. And McDonalds is shyte.

Meanwhile, the Finance Wizards keep pretending that Economics is a true science. Only if so they can convince themselves that they are worthwhile and relevant. Much like religion.

The problem with the current system is, as in science: The old guard needs to die before new thought will be accepted. After all, most people hate the very idea (and fact) that they have built their entire careers (and life) on sand. Could not admit that can we?

And socialism? It is a dirty word. Like communism. And capitalism is now. Why? Because, just like communism, socialism and capitalism are beset on all sides by special interests. Egos that seek to gain at the cost of others.

There is no more common weal upon which commonwealth is built. We are all sharks now. Solitary. Alone. Eating everything in existence until there is no more.

Communism died. Capitalism leads to corruption. Socialism, well, it is just a dirty word. However, common weal is socialist. Group survival over the individual.

No more assholes working in offices. Buying and selling pieces of eight on paper. All the while thinking they are performing some great intellectual feat and contributing to real wealth.

An eight year old randomly picking out stocks in the newspaper does just as good as the average stockbroker in some office on Wall Street. Great intellectual feat. My ass.

Intellectually challenged and intellectually captured by group think. Nice.

Cognitive Dissonance's picture

This insanity reminds me of something that happened to me as a child of around 9 or 10. I was petting a neighbors dog and I got rough with the animal. It turned and nipped at me and I grabbed the collar in an effort to control it and prevent it from biting me. That caused the dog to struggle further, thrashing back and forth in an effort to get free as well as bite me.

There I was, holding on for dear life to a dog who was at the same time both terrified and furious. What could I do at that point? If I let go, the dog would severely bite me. But to continue to exert even more control only caused the dog to panic more and more and to struggle even more frantically.

Eventually my father heard the dog yelping and barking and my terrified screaming and he rescued me from my stupidity. The dog wound up taking a large chuck of flesh out of his arm as he shielded me from my actions. But I never forget what happened and I always treated animals with more kindness and care from that moment on.

How do we bring this economic dog under control without doing more damage to the dog and ourselves? How do we calm a situation that is way past the point of no return? How do we put the genie back in the bottle?

While Dad is gone now, I always thank him when I think about this life lesson. 

Harbourcity's picture

If your dad was the US government he would have shot the dog.


Problem solved.


Art Vandelay's picture

Au contraire...he would have allowed the dog to restructure as a bank holding company, lent to it a 0%, supported its decision to pay itself a huge bonus and than invited it to a televised hearing when it could issue grave warnings about what would have happened had it not been pet in the first place.

Ragnarok's picture



Really though, it is a sad day.  Is it too much to ask to wake up in the morning and not be under assult from my gov't, I mean every freaking day can't they just fuck off for one day.

Anonymous's picture

Yes please just 1 day - Get off us!!!!

DosZap's picture


Ain't it the damned truth........these SOB's make every day a DECISION day for us, and never a good one. I am sick and tired of never getting a breath of air.

Al Capone deserves a damn apology compared to these friggin THIEVES.

They seize our 401k's,( after stealing the SS Funds, Medicare, and Medicaid) I see some real violence coming into play.........

This is one VOTE, I would not be a party to.

Stevm30's picture

Yes because the only thing that is FOR SURE controllable, is something that doesn't live.  Those who have power have a tendency to kill living things - for that reason... look at Warren Buffett: "The system was at stake"  No Warren - YOUR system was at stake.

Anonymous's picture

ahh, no.

he would have shot you to protect the dog. The dog was too big to shoot(fail).

LoneStarHog's picture

You EUTHENIZE the damn dog before it can BITE YOU!

Cognitive Dissonance's picture

I agree LoneStarHog. So who has the balls to stand up to this dog? Anyone? Anyone? Bueller?

I didn't think so.'s_Day_Off

Cognitive Dissonance's picture

I'm actually very good with dogs and other animals in my old age. It's rabid Fascist governments I have a problem with and the people who enable them, including my fellow meek sheep who rather go along to get along and ignore the concentration camps dead ahead.

Psquared's picture

What's wrong with Concentration Camps? They get a bad rap. Its 3 squares a day, a roof over your head, a warm bed at night and great daytime exercise. If you behave you might get some time on the chain gang and see the countryside. Be glad you have that concentration camp. You could be living under a bridge to nowhere.

economessed's picture

In this situation, you must use the "wood and water" method.  Beat the dog with a stick of wood until its eyes water. 

Anonymous's picture

I hope you are speaking metaphorically. There is a special place in HELL for anyone that would abuse animals or even speak of it. Makes me sick.

Anonymous's picture

"or even speak of it"

Bite me; we still supposedly have the right of free speech.

But I do agree regarding people who actually abuse animals.

Anonymous's picture

When a person is faced with a choice between their safety and the well-being of an animal that is acting threateningly toward them, the animal is going to lose every time.

mtguy's picture

My guess is we're all going to have a few pounds of said flesh taken from us if they get their way!

Anonymous's picture

The dog has rabies, put him down-18

Anonymous's picture

Been out of town, getting caught up some. This was a provocative post. Nice work.

Anonymous's picture

Been out of town, getting caught up some. This was a provocative post. Nice work.

Chopshop's picture

the RR's who push the product(s) hardly have an f'ing clue of their construction and the vast majority of those with monies in qualified 'annies' (ahem, NYSTRS 403(b) option 2'ers w/o pop-1 /2 protection) don't have the foggiest concept of fee structure, let alone what pitfalls lay immediately ahead).

i'm sure FINRA et al really cares about what we all have to say and isn't just doing their public 'due diligence' so as to have plausible deniability, if (hah) it were to backfire / blow-up bc of 'unintended / unforeseeable circumstance(s)' ... great idea.

what is left of the CVLI / qual-annuity loop-hole is about get even tighter.

wonder how long til estate tax is finally re-branded death tax n effectively neutered as well ... then charities of all stripes will be crucified by the loss of 30-70% of their annual intake, but again, how could anyone see this ahead of time. 

Disclaimer:  long Zero Hedge, short "free and fair markets"

Psquared's picture

Don't the Bush tax cuts run out this year? Estate taxes will be another take away for the goobermint as we continue with the largest wealth transfer (make that heist if you die in 2011) in history.

Harbourcity's picture

Don't people normally get jail time for senior abuse?


Anonymous's picture

the game is a foot. the masses won't catch on for a while, and when they do, the econimc conditions will be so poor that people will beg for jobs even if the job is riveting chains of bondage around their fellow countrymen's necks.

deadhead's picture

Get your Treasuries here, red hot Treasuries here!


Can't watch the ballgame without your red hot Treasuries!

jkruffin's picture

So is this Social Security Part Deux?  So they can rape and pillage and send all retirement accounts into a fiscal nightmare?  They managed to send Social Security into the RED, now they want to pillage our personal retirement accounts?

This is nothing more than a ploy by this government to get people to pay for their stupid treasury debt they cannot seem to stop selling, since no other country wants it anymore.

This cannot be allowed to pass.

I am planning to move out of this country within the next 5 yrs, for good reason. They better not mess with my money or I am shooting someone.

E pluribus unum's picture

Wait6 till they privatize Social security and place all those receipts into "the market" via GS.

Catullus's picture

A bond mutual fund you can never sell. Let me guess, it'll adjust for inflation? This sounds like the bush "privatization" of social security scheme from 6 years ago. I'm inching closer toward the exit doors.

Gold...Bitches's picture

yeah, it'll adjust for inflation.  just not the inflation measure that includes food or energy.

Gold...Bitches's picture

because, really, who uses those things?

Anonymous's picture

The sheeple don't care. Just give them their Fucking American idol and iPhone and their fine. Let's see how many sheeple will actually cashout.

T-888's picture

But I use my iPhone to read ZeroHedge...

Gimp's picture

Pull your money out while you can and f**k the tax penalities. Better off paying the 10% penalty on something and have access to my money!



What a mess_man's picture

It's far worse than 10% dude.  In fact when all is said and done I believe it's well over 50% with all the penalties and taxes paid. 

tenaciousj's picture

20% federal right off the top.  Then add in any additional fees and taxes if they apply

DoChenRollingBearing's picture

I took a total hit of about 24% taken when I cashed my IRA in in 2008.

Slept better ever since!  Or was that because I bought more gold...?

mtguy's picture

Actually the 20% is the federal tax part -you might owe more or less at tax time, but the required withholding from your employer is 20%. Oh, and at tax time don't forget that pesky 10% pre- 59 1/2 penalty to boot,which is taken on the gross distr. not the after-tax distr., just to add a little more salt in the wounds.

Anonymous's picture

Better to pay 35%-40% now than wait a few years and watch the Fed take it all. (I think a forced conversion to Social(ist) Security will be the mechanism of choice, or a "one-time" special tax of %50% to prop up Social Security once it fails beyond the point of denial.)

I cashed in mine last year and paid off the house. Haven't slept so well in years.