Two articles I read over the weekend should scare the pants off anyone concerned about safeguarding their retirement. On top of that, the content of those articles might cause you to think I might have had specific advance knowledge of President Obama’s sinister plan to hijack your retirement savings. But, I assure you, I did not!
A Pensions & Investments article published Aug. 24 began with the following paragraph:
Labor Department officials are determined to produce a new standard of fiduciary duty for anyone giving retirement investment advice, once they process concerns raised in thousands of comment letters and four days of hearings on their proposal.
We heard the same sort of rhetoric surrounding development and implementation of the anything-but-Affordable Care Act (a.k.a., “ObamaCare”) that’s resulted in having inept government bureaucrats in charge of a vital part of your life and one-third of the nation’s economy.
Put simply, the proposal is currently too complex and costly for firms and advisers to operationalize in their businesses. The mechanism it introduces to preserve commission-based advice on IRAs and other retirement accounts — the best-interest contract exemption (BICE) — is so complex, costly and fraught with unpredictable legal liability as to amount to an effective ban on commissions as a viable form of compensation for advice.
Summing things up, the Obama Administration is using its henchmen at the Department of Labor to do to the financial services industry what has done to the nation’s healthcare system, and we’ve all seen how well that’s worked out.
Now, back to my headline-shaping denial — that is, that I had no specific advance knowledge of the Obama Administration’s plan to hijack your retirement savings. I stand by that denial. At the same time, however, I must admit that President Obama’s efforts do remind me of what takes place in my third book and first crime-fiction novel, The National Bet.
Read the excerpt below, from Chapter 10 of the book, and let me know if you agree:
A few minutes past noon on May 11, 2015, President Barack Obama shocked the nation during an announcement carried live on all of the major television and radio networks as well as PBS, C-Span, YouTube and thousands of new media outlets.
Barely two years after the nation’s forty-fourth president had proposed a cap on lifetime contributions to individual retirement and 401(k) accounts at “about three million dollars for someone retiring in 2013,” he told Americans something that cut even deeper.
“The American economy is on the verge of collapse and, after consulting with members of my cabinet, I decided to take swift action to avert disaster. A few minutes ago, I signed an Executive Order that effectively places the Treasury Secretary in what I like to describe as a guardianship role over the retirement savings plans of all Americans.”
Hearing the news, Americans braced themselves for what he would say next.
“So, what does that mean? It means this: if you have an IRA, a 401K, a pension or any other type of retirement plan, it means it will now be held in trust, safe, by the United States Government. And it means you can sleep comfortably tonight knowing it is safe.”
Unlike the never-implemented proposal the president had pitched in May 2013 as a way to prevent the people he called “wealthy individuals” from accumulating “substantially more than is needed to fund reasonable levels of retirement savings,” this executive order—the most recent of more than two-hundred he had signed since taking office—left Americans feeling as if a sacred trust had been broken.
After the fine-print details of the order—conveniently omitted by the president during his television address— became public, Americans became angry, feeling as if they had been robbed of their retirement nest eggs. In turn, they began directing their anger at anyone remotely connected to Washington, D.C.
To find out what happens in the rest of this crime-fiction tale in which financial matters actually play a very small part, order a copy of The National Bet. You’ll be glad you did!
To find out what happens before and after these excerpts, order a copy of The National Bet.
Hat tip to Director Blue for the “heads up” about the articles.