Teresa Ghilarducci, Your 401K & UAW "VEBA" - 'UAW Healthcare Trust'

[WhiskeyGirl]

Is this the healthcare trust the auto companies wanted the $35 million for?

UAW's VEBA Board: Autoworkers’ Health Care Benefits in Peril
...the United Auto Workers’ health care trust may not last as long as the 80 years union leaders first projected.

“Obviously, we’re as worried as” the public is, says Teresa Ghilarducci, a member of the 11-person board overseeing the UAW-run health care trust...

Ghilarducci says that given the current state of the industry, there is a “low probability” that the fund will last that long...

“I’m convinced that current retirees won’t lose a penny,” she said. “If there are tradeoffs, we’ll trade the future generations for the current generation.”

The total value of the health care trust is to be about $60 billion, with GM providing around $33 billion, Ford roughly $15 billion and Chrysler about $9 billion. Each company will fund and manage the VEBA separately until 2010, after which the UAW will keep the funds for each company’s retirees separate.

“If we get the money [for the VEBA], we’ll be OK,” Ghilarducci says. “If the companies go bankrupt, then we’ll stand in line with all the other creditors.”

http://www.workforce.com/section/00/article/25/94/05.php

Theresa Ghilarducci is the person that has suggested converting the 401K and IRA to a "Government Retirement Account" or GRA.  Enchancement would include a 5% payroll tax (paid for by the worker) on top of Social Security and managed by the folks at Socialy Security.  The GRA would earn only 3%, and a person would only be able to leave 1/2 of the balance remaining at death to a beneficiary.  The other half just disappears.   This new trust fund has been described as a new government controlled 'ATM'.

What is my humble prediction?  If some automakers like GM do not receive a bailout by year end the VEBA will not be funded for GM.  I'm thinking GM is going under regardless.  However, if they do not get the bailout, the VEBA will not be funded for $35 million. 

Prediction continued - The other piece of the bailout money another $35 million will ensure operation until the end of the year, and payment of executive and managment bonuses. 

Prediction - The $25 million from September is history.  Bankruptcy either way. 

If there is something left to save of GM, why doesn't some management person have confidence to buy up a piece and move one?  Why aren't the union and/or other employees looking to buy the company and move to employee ownership?

Is it really that bad?  Somehow, I think the prospects get dimmer each day. 

I think a hole in the backyard or a sock is looking better and better for retirement each day.

just my humble opinions.

I still believe the nation should not leave these increasing debts to children and grandchildren.  Live within the financial means of the individual, family, and nation.

I think the best solution is to give every American paying taxes a $1,000,000 one time payment to help stimulate the economy, from the bottom up.

[WhiskeyGirl]

My 401K is something that belongs to me.  I fund it or I don't.

Analysts point to another disturbing part of the plan. With a GRA, workers could bequeath only half of their account balances to their heirs, unlike full balances from existing 401(k) and IRA accounts. For workers who die after retiring, they could bequeath just their own contributions plus the interest but minus any benefits received and minus the employer contributions.

She cited the 2004 HSBC global survey on the Future of Retirement, in which she claimed that "a third of Americans wanted the government to force them to save more for retirement."

What the survey actually reported was that 33 percent of Americans wanted the government to "enforce additional private savings," a vastly different meaning than mandatory government-run savings. ... ( www.hsbc.com/retirement ).

On Oct. 22, The Wall Street Journal reported that the Argentinean government had seized all private pension and retirement accounts to fund government programs and to address a ballooning deficit. Fearing an economic collapse, foreign investors quickly pulled out, forcing the Argentinean stock market to shut down several times. More than 10 years ago, nationalization of private savings sent Argentina's economy into a long-term downward spiral.

http://www.rightsidenews.com/200811082544/editorial/democrats-target-401k-and-ira-retirement-accounts.html

[WhiskeyGirl]

What does this mean to me?  Some people will continue to be frugal and save for retirement, others will not.

Myself and a neighbor both have similar homes.  We heat with the same furnace and have very different gas bills.  We both have budgeted about $200 a month for heat.  Government wants us to save energy.

Why the difference? 

One of us decides to live within the means available, the $200.  This may mean keeping the heat set to 65 degrees and wearing a sweater.  If the bill is over $200, means cutting back somewhere else.

The other decides to keep the temperature set at 78 degrees, doesn't like to feel cold or wear a sweater.  What to do when the heat bill is over $400?  Cut back?  no  The other concludes that the government should provide additional assistance to make up the difference.

Is it in the best interest of everyone to continue to use more and more energy?  What is the incentive from government to use less?

What is the incentive for the individual to save?  Is it better to spend everything today and save nothing for a rainy day?

[WhiskeyGirl]

Why are taxpayers being asked to fund $35 billion into GM's VEBA fund for UAW healthcare?  A healthcare trust fund that will last 80 years? 

Medicare and Medicaid are BROKE.  Social Security is an empty fund with no trust.  Where is the money to restore these funds to a sound basis?

Why not roll VEBA and it's current money into Medicare?   Alternatively, give every American worker maybe $1 million to establish and manage a private fund to see to their future healthcare needs? 

Aren't we all in this together?  Everyone equal?

The bailouts don't seem to be working.  Money to lots of special interest groups, and no one looking out for taxpayers.

Anyone help my understanding?  Am I misunderstanding this $35 billion?  Please?

[WhiskeyGirl]

(Please don't send a Teamster to my house.)  

[WhiskeyGirl]

I've read in many places that 401ks and IRA are worth over $10 trillion dollars.  Dollars that the government can't spend at this point in time.  Money that WAS saved for retirement on a VOLUNTARY basis. 

How much does government have saved in the Social Security trust fund?

You could have two individuals under similar circumstances, and one chose to save and one did not.  It's a matter of CHOICE.  

Why not examine why one chose not to save?  Why would someone discriminate against their future and spend it all today?

From a TERESA GHILARDUCCI opinion November 16, 2008 "Guaranteed accounts would ease anxiety"

The growth of 401(k) and Individual Retirement Accounts advanced retirement security for only a few workers. The advent of 401(k) plans did not expand pension coverage past the 50 percent of the work force covered since the 1970s. Nor did they increase national savings rates.

What is that $10 trillion in 401ks/IRAs considered? 

I propose we immediately recognize that 401(k) accounts and IRAs are financial institutions where 38 percent of the work force saves for retirement. Under the auspices of the Troubled Asset Relief Program -- the bank bailout program -- Congress should let workers voluntarily trade their 401(k) and similar plan assets (perhaps valued at mid-August prices) for a Guaranteed Retirement Account comprise of government bonds (earning a 3 percent return adjusted for inflation).

In October 2007, a whopping 91 percent of Americans told a Wall Street Journal poll that the government should do something to secure retirement; and 41 percent said they were not hearing enough from the presidential candidates about retirement income.

I think the best thing government can do is return the money to Social Security, restore the trust of the American people in the program.  Reduce the national debt.  Adding to the debt is ensuring the future generations of American live in a form of slavery - debt bondage.  They will be in bondage to repay the debt of the freewheeling ancestors and politicians.



read more here -
http://www.delawareonline.com/article/20081116/OPINION09/811160306/1004/OPINION

Is the government likely to SAVE this money?  Or spend?  I'm inclined to believe they'd spend it.

Even if someone's 401k lost 20% of the value, how much money have they made over time? 

From what I've read of the government plan -

Forced contribution/tax of 5% (plus some other scheme involving $600 for those that are low wage earners) on top of the 7% already paid to "voluntary/involuntary" Social Security.

The government would allow the individual to bequeath ONLY 50% of the remain CONTRIBUTIONS made over a lifetime. 

The balance... Is that a new DEATH TAX on everyone, even the most lowly paid workers?  Does it matter how little one makes?  Little if nothing to pass on to children or charity?  The government keeps the imaginary POT of the individual account?

Death tax equals
- 50 of contributions
- 3% "EARNINGS/INTEREST" over a lifetime
- plus $600 government sweetener every year
- the difference between "actual" rollover and credited rollover (August 2008 value, lost due to adjustment)

I would imagine that the government will determine how much can be withdrawn based on GOVERNMENT calculation.  No more using the 401k to pay for car loans, student education, or home improvement loans.

I imagine that if the government controls how much a person may take out and on what schedule, they determine how much is left at the end.  The government determines how much the government gets to keep.  I imagine that few if any will outlive their GRA SAVINGS.

The US already HAS  Social Security for the masses.  If the government wants to make sure every American has some retirement, FIX SOCIAL SECURITY first.  If there is no discipline to fix Social Security, what is the point of killing ALL Americans with new GRA taxes?

Perhaps some Americans would get some new earned income credit for the GRA? 

The GRA sounds like something that a flimflam man would sell in your home, through your friends.  Promises, promises, and then disappear into the horizon, some island, or South America.  IF a private person did this to people, I imagine it would be on revealed as a scam on 20/20, America's Most Wanted, and the FBI website. 

The GRA would give people the "illusion" of savings.  An illusionary account that appears to grow, but will that money always remain untouchable.  In my mind, at the end, the savings are not there, nothing to spend or pass on.

No new government money grabs and swindles.  Start on the road of financial security, restore the health of Social Security and pay down the national debt.  Get the US on the road to prosperity, make some money, don't keep looking to steal from others.

Ancient wisdom - "It doesn't matter how much you make.  What matters is how much you save.  In the end, that's all you've got."   The GRA is not a retirement plan or a savings plan, it is a tax, death tax, and swindle all rolled into one.

just my humble opinions

All that glitters is not gold.

[WhiskeyGirl]

I was wondering last night why Teresa hasn't mentioned putting the UAW pension fund into this GRA.  Isn't a great idea good for everyone?  Or, just some?  Can the government take/loan/ATM the UAW pension currently?

I'm guessing they can't.  If the UAW plan is underfunded, why not just put what's left into the GRA?  Eliminate bankrupt/failing pensions altogether?

Do employees pay taxes on employer contributions to private pensions?  Maybe that's a loophole that could be looked into?  Capital gains for pension plans?

I was always under the impression that the 401k/IRA was an effort to level the playing field for people without an employer pension plan.  Encourage people to save.  $10 trillion must be small potatoes compared to what's in these other private pension plans.

What happens if my company goes bankrupt?

Large bankruptcies are common, especially in heavily unionized industries. The Department of Labor (DOL) answers some commonly asked questions in “Your Employer's Bankruptcy: How Will It Affect Your Employee Benefits?”

Generally speaking, the assets in your pension should not be at risk if your employer declares bankruptcy. This is because the law requires your employer to keep the pension adequately funded and separate from business assets. Creditors should not be able to claim pension assets.

If your employer files for bankruptcy, contact your plan administrator or your union representative to get an update on how the bankruptcy will affect your pension.

http://www.knowyourpension.org/pensions/pensionfunding/pension_facts.aspx#9

Would the UAW pension be at risk like the underfunded health fund if GM files bankruptcy?

An average worker with wages and benefits of $78/hr @ 40/hr wk for 52 weeks has a value of $162,240 per year excluding overtime.  I would that overtime may put that worker over the $200,000 single or $250,000 family amount I've bandied about by the Obama campaign.  I think there would be a lot of money in that pension plan.

Many people who contribute to 401k's, IRA, and other programs do so because they do not have an employer pension plan.  They are people who drive school buses, work in warehouses, work for large and small companies, some are self-employed, some may be nonunion, and some may not make anywhere near the Obama line of demarcation that separates the rich from the rest of society.  I am sure that there are some that are above the line of demarcation, and they contribute a lot.

What's wrong with treating everyone the same?  Is not the autoworker dollar the same as what the rest of us make?

If it's good for the 401k/IRA, why not for the autoworker and other pension plans?  Maybe they should be part of the new GRA to?  Maybe the plan for other government employees and members of Congress?  Wouldn't they benefit from this new plan to? 

Why keep anyones money separate?  Out of the GRA?

[WhiskeyGirl]

Obama seizing 401k/IRA’s?  Scrapping Social Security?  Forced Government Annuities?

I saw this and wondered, could this be true?

“401k/IRA Screw Job Coming?”

Now this is a guaranteed rape job.

In a short conversation this noontime that CNBC apparently has omitted from their archives (Why's that folks?) Rick Santelli was talking about a potential to effectively force money into the Treasury market.
Where would they get this?

From your 401k and IRA accounts!

From Businessweek:

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
Let me tell you what this is - it is an attempt to prevent the collapse of the Treasury market!

Forcing people into Treasuries as an "annuity" is exactly what Social Security allegedly is.  Except that Treasury stole the money that was collected in FICA taxes and spent it!

More here - http://lunaticoutpost.com/Topic-401k-IRA-Screw-Job-Coming

Anyone see this CNBC snip?


Sounds a lot like the GSA plan floated in 2008...

see old posts

A bailout for the union retirement accounts?  Union trust funds?

[WhiskeyGirl]

The previous post was from a ‘lunatic’ site.  So, I looked further.

Here is some info from MSNBC –

[Bloomberg] -- The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams following a collapse in retiree accounts when the stock market plunged.
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401[k] savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

AARP –

"There's a real desire on a lot of people's parts to try to encourage something other than just rolling over a lump sum, to make sure this money will actually last a lifetime," said Certner, legislative counsel for Washington-based AARP, the biggest U.S. advocacy group for retirees.

More here - http://www.msnbc.msn.com/id/34805672/ns/business-businessweekcom/


Does the taxpayer funded casino known as Wall Street need more money?

Would you trust the government with your retirement?