Skip to comments.European nations begin seizing private pensions
Posted on 01/04/2011 5:57:40 AM PST by Main Street
Peoples retirement savings are a convenient source of revenue for governments that dont 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 4bn from this fund for rescuing banks. In November 2010, the remaining savings of 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 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.
Coming to a theater near you. Thanks to Obama and the Democrats. Let’s not forget the RINOS.
Ha! The very notion is absurd. You cannot trust a big-government socialist politician with even one dollar.
Europe could well be rapidly lurching towards scattered revolution and civil war across the bankrupt continent.
I know of very educated, level-headed sensible people, physicians, etc. who have stated unequivocally that they would take up arms against their government if their life savings were seized.
You hit the nail on the head. The writings on the wall.
This is happening in the US today!
Congress is running up the debt. This in turn forces Tim and Ben to print more money! They are causing inflation which is a much more direct method of confiscating savings and retirement funds.
If the politicians try this in the USA, they better find themselves a really defensible place to live.
80 million Americans own firearms and probably the majority of them have some kind of IRA or private savings for retirement.
The congress critters need to do the math, and I'm not talking about balancing the budget, I'm talking about "Jethro's guzzintas".
80 million gun owners guzzinta 535 lawmakers how many times?
Young readers can google Jethro, Jeb, Granny, Ellie Mae, Texas Tea, etc.
BINGO! Except it's even more underhanded and dishonest, since the Fed operates "automomously" and they don't have to vote on a damn thing to inflate the currency. Even worse, some idiots still think big, greedy corporations are responsible for inflation.
And it will look like THIS:
We are armed.
The Hungarians, Bulgarians, etc., are not.
I am spending much of my savings this year on much needed dental work. By the end of the year, I’ll have every dental issue resolved.
I’d rather use the money NOW, than have it inflated away in the very near future.
I do not think I’m alone.
Anyone else notice the light bulbs going on over the democrats head?.
Ping for later
Well, theyre working on that.
Yep, before they give up power they will rob the people first, they must be forced to give up power by starving the beast..eliminate taxes altogether, close the IRS..etc...
They’ll tug their forelocks and bend knee when armed IRS agents show up at their front doors. It’s easy to talk now.
Let’s see real people pull themselves away from their sports on television and “take up arms.” Such a thing will shock the world.
Smart people are converting their savings into gold, corporate bonds...and practical things, like dental work. I wish I was a few years older so that I could manage all this without taking that tax hit.