The 401k Raid Is On

[Uncle Jack]

You heard it here first and you heard it from your Uncle Jack. More than 18 months ago I stated in the pages of this forum that people would be raiding their 401k accounts to make ends meet. That hurts stock prices.

http://www.usatoday.com/money/perfi/...terstitialskip

Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators.

Rather than borrow money from their 401(k) accounts, which would have to be paid back, a growing number of beleaguered families have been cashing out, plan administrators say

[dbarberic]

Re: The 401k Raid Is On

The real fun starts when the politicians set up a 401K tax penalty holiday to help "jump start" consumption (aka The Economy).

[jk]

Re: The 401k Raid Is On

The real fun starts when the politicians set up a 401K tax penalty holiday to help "jump start" consumption (aka The Economy).

bill clinton got the federal budget to a surplus on the capital gains taxes of the tech bubble. maybe the next president can do it on the taxes and penalties of 401k liquidations.

[GRG55]

Re: The 401k Raid Is On

You heard it here first and you heard it from your Uncle Jack. More than 18 months ago I stated in the pages of this forum that people would be raiding their 401k accounts to make ends meet. That hurts stock prices.

http://www.usatoday.com/money/perfi/...terstitialskip

UJ: I remember your postings on this topic. That's what is so valuable about iTulip - people like you, who are close to things that are going on through business or their profession, can cut through the crap and confirm or refute what's being said (or not said) in the mainstream media.
Thanks.

[bill]

Re: The 401k Raid Is On

You heard it here first and you heard it from your Uncle Jack. More than 18 months ago I stated in the pages of this forum that people would be raiding their 401k accounts to make ends meet. That hurts stock prices.

http://www.usatoday.com/money/perfi/...terstitialskip

What about pensions are they next?
CalPERS complain about a proposed bill that would cut off their access to PE (flippers) investment strategies. Does a pension investment in PE produce such returns necessary to stay solvent? What about pensions without such strategy?

http://www.sacbee.com/103/story/793145.html

March 18, 2008
California's public pension funds are gearing up against a bill in the Legislature that would halt new investments in private- equity firms partially owned by foreign governments with spotty human-rights records.
CalPERS and CalSTRS say the bill, AB 1967, would cost them billions of dollars in lost revenue.
"It would put us in a box," said Rob Feckner, board president of the California Public Employees' Retirement System.
But by halting the flow of new dollars, the bill would cut off much of their access to the often-lucrative world of private equity, the two funds say.

http://www.finalternatives.com/node/3838

March 14, 2008
The $240 billion California Public Employees’ Retirement System has committed a total of $1.4 billion to five private equity funds and a hedge fund.
Last month, CalPERS committed $500 million to the Riverstone/Carlyle Global Energy & Power Fund IV; $442 million to Bridgepoint Europe IV fund; $200 million to the Resolute Fund II; $106 million to Carlyle Europe Technology Partners II and $100 million to Advent Japan Private Equity Fund.

http://www.pionline.com/apps/pbcs.dl...846/-1/PIDAILY

Posted: March 14, 2008
About $9 billion of CalPERS’ $23 billion private equity portfolio is managed by private equity firms that are partly owned by sovereign wealth funds. If CalPERS staff had not invested in those funds, the pension fund would have missed out on $3 billion in revenues, according to the staff memo. Since its 1990 inception through Sept. 30, 2007, the private equity portfolio has brought in $12.6 billion in profits, according to the memo.

http://www.sacunion.com/pages/columns/articles/9324/

Published: March 11, 2008
The real problem is that public pensions are the tail wagging the dog, just as we see in our own city. California coffers cannot keep up with staggering pension payments to retiring city and county workers.