Donald Trump’s Executive Order Will Let Private Equity Funds Drain Your 401(k)

February 6 2017, 9:40 a.m.

DONALD TRUMP’S FEBRUARY 3 executive order enabling financial advisers to continue ripping off their clients could prove a lifeline for a surprising beneficiary: the private equity industry.

The Department of Labor’s fiduciary rule would have forced investment advisers in workplace retirement plans like 401(k)s to operate in their clients’ best interests, rather than recommending high-cost, high-risk products that offer the advisers kickbacks and perks.

The Obama White House estimated in a 2015 report that conflicts of interest cost retirement savers $17 billion annually, though that figure has been challenged.

The fiduciary rule, finalized last year, was to go into effect in April. But the new order directs the Labor Department to review the rule, which is expected to initiate the process of rescinding it.

As Gary Cohn, former Goldman Sachs president and director of the National Economic Council, put it, the fiduciary rule “is like putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.”

Read on.

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One response to “Donald Trump’s Executive Order Will Let Private Equity Funds Drain Your 401(k)

  1. LOL! As if they haven’t already been drained! This is really foaming the runway. If you seriously think that these funds still exist just look at what happens when union members try to pull out their funds. All of a sudden the union puts a halt on the amounts of withdrawal and sometimes altogether puts new rules in keeping members away from their own monies.

    Going private just allows the systematic bankruptcy procedure without exposing the fraud, negligence and mismanagement of pension funds. Folks, there is over $3.4 TRILLION $$$ in unfunded pension nationwide. Gone, gambled away in unregulated derivatives that gave pension fund managers full disclosure how risky the investments were.

    If it were me, and this isn’t legal advice it’s just common sense, I’d take whatever I could get out of my retirement account now – even if I had to quit my job to entitle me to drain my account. Because if you are only working for your retirement account – there are good chances it won’t be there when you are ready.

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