European nations begin seizing private pensions Hungary, Poland, and three other nations take over citizens' pension money to make up government budget shortfalls. By The Adam Smith Institute Peopleâs retirement savings are a convenient source of revenue for governments that donât want to reduce spending or make privatizations. As most pension schemes in Europe are organised by the state, European ministers of finance have a facilitated access to the savings accumulated there, and it is only logical that they try to get a hold of this money for their own ends. In recent weeks I have noted five such attempts: Three situations concern private personal savings; two others refer to national funds. The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings. The Bulgarian government has come up with a similar idea. $300m of private early retirement savings was supposed to be transferred to the state pension scheme. The government gave way after trade unions protested and finally only about 20% of the original plans were implemented. A slightly less drastic situation is developing in Poland. The government wants to transfer of 1/3 of future contributions from individual retirement accounts to the state-run social security system. Since this system does not back its liabilities with stocks or even bonds, the money taken away from the savers will go directly to the state treasury and savers will lose about $2.3bn a year. The Polish government is more generous than the Hungarian one, but only because it wants to seize just 1/3 of the future savings and also allows the citizens to keep the money accumulated so far. The fourth example is Ireland. In 2001, the National Pension Reserve Fund was brought into existence for the purpose of supporting pensions of the Irish people in the years 2025-2050. The scheme was also supposed to provide for the pensions of some public sector employees (mainly university staff). However, in March 2009, the Irish government earmarked â¬4bn from this fund for rescuing banks. In November 2010, the remaining savings of â¬2.5bn was seized to support the bailout of the rest of the country. The final example is France. In November, the French parliament decided to earmark â¬33bn from the national reserve pension fund FRR to reduce the short-term pension scheme deficit. In this way, the retirement savings intended for the years 2020-2040 will be used earlier, that is in the years 2011-2024, and the government will spend the saved up resources on other purposes. It looks like although the governments are able to enforce general participation in pension schemes, they do not seem to be the best guardians of the money accumulated there. The table below is a summary of the discussed fiscal-retirement situations (source): *These figures do not include the costs of higher taxes, price inflation and low interest rates, which additionally devaluate retirement savings. http://www.csmonitor.com/Business/T...ropean-nations-begin-seizing-private-pensions
wonder if anyone notices gov'ts never seize from the financial institutions or wealthy classes only the common people and also does the reverse, its like olden days of aristocrats/landowners and peasants, not much seems to change
The best private pensions are the ones they can't touch or even know about. Investing in classical Jewellery is one good idea. If you buy quality pieces in the $1000-$5000 range they're easy to sell on and don't really lose value, only ever go up (but don't expect to make a fortune, just inflation + a little bit). Doesn't take long to learn or get a feel either for the market, plenty of books and sale rooms to learn from. Time to learn how to escape from your government's financial clutches..........
anyone know the difference between a private pension and a US 401k? I know there are differences as pensions inherently have govt. connections.
i was think about same thing couple days ago..because they are looking for an easy money. big corp or rich guy likely will defend himself with a team of lawyers. it will rise the cost if gvt want to continue the battle. much easier to slap average joe with some random accusation and make a "deal". Anna Chapman story comes to mind.not money\taxes related,but the gvt approach itself. instant classic.
Well, I don't see what's so onerous about the thing that the French have done, for example. Pretty much it's just a way of raising the retirement age, while avoiding the strikes.
its quite tough for the average joe to make a living nowadays given tougher employment conditions from fewer opportunities, higher qualifications, more work, lower pay and rising household costs anything from utilities petrol to costs of goods and now lost of pensions at retirement, don't u just love your gov't
New Jersey is trying to follow the European's, but they're gonna start on a little smaller scale: New Jersey Wants to Seize Your Unused Gift Cards Published: Monday, 3 Jan 2011 | 8:54 AM ET By: AP New Jersey isn't giving up its effort to seize unused money on gift cards and traveler's checks. Lawmakers voted last year to allow the seizure of cards after two to three years as a way to raise about $80 million and help balance the state's budget. But in November, a federal judge temporarily struck down the law. The Record of Bergen County reports the state isn't giving up though. State treasurer Andrew Sidamon-Eristoff has told a judge that the state will appeal the earlier ruling. New Jersey Retail Merchants Association, the New Jersey Food Council and filed suits to block the law.
It's funny how people get their nickers in a twist without bothering to find out the truth. Also, this article goes to show how little accountability journalists have. They can spew anything and you know it will stick with the liberal* majority. In the case of Hungary and Poland "private pension schemes" are state funded. That's right. State funded. One can not choose whether he wants to participate in private or state pension he will be designated based on his birthday. And he has no discretion above his funds, as the 'management company' - usually owned by a multinational bank - has sole discretion to 'invest' those funds. And they have. With an average gross negative return for the past 10 years. Minus fees, which gross 5-10% p.a. If anything it is made sure that one's pension is invested away by the time he retires. And one more thing. These 'private' pensions didn't pay out a single grosz or filler thus far, because they got the younger part of the work force (the state kept the older population and the ones already in pension), so the first payments would have to be made in 2013. And those are lump sum payments, not pensions. Meaning, one would not get a monthly alimony from the pension administrator for the rest of his life, one would get a lump sum payout of whatever is left. Quite a deal. In addition, in Hungary there was an attempt in 2008 to 'privatize' the 'private' pension funds, and transfer ownership of assets to the pension administrators in exchange for the obligation of payments. The law failed in the constitutional court but not a single article was written in the international press about the privatization of 'private' pensions. Apparently it is perfectly reasonable and beneficial to all parties if multinational financial institutions privatize 'private' pensions, but if the state does it, its blasphemous, communistic, anti-democratic. (Maybe even an outrage against humanity, but we will have to investigate this one further. Amnesty International is busy at the time.) *the definition of liberal being "someone who would climb up on the pile of stones of the destroyed Bastille and then throws a tantrum to let him out"