Skip to comments.Hungary takes aim at [seizing] private pension funds
Posted on 11/28/2010 2:25:13 PM PST by DeaconBenjamin
Hungary is trying to force 3 million people now in private pension schemes back into the state system to help it meet strict budget targets.
Special incentives would be offered to those switching into the state pension plan by Jan. 31, Economy Minister Gyorgy Matolcsy said Wednesday. Those people remaining in private schemes will become ineligible for public pensions -- a move that would effectively cost them 70 percent of their retirement payouts.
At stake is about 2.7 trillion forints (euro9.8 billion, $13.5 billion) accumulated in individual pension accounts and managed by private pension funds.
The government plan, while not nationalizing private pension funds outright as Argentina did in 2008, is expected to make it very difficult for the 18 funds offering pension services in Hungary to keep operating.
Matolcsy said severe cuts will also be made in how much private funds can charge for fees and operating expenses.
Hungarians will automatically be transferred into the state system unless they opt out.
At present, 10 percent of most employees' wages go into a private pension fund, while employers pay another 24 percent into state coffers. Under the government's new plan, those who stay in the private scheme can count only on their own 10 percent payments when they retire.
Matolcsy told reporters the new plan was an "important turning point in terms of economic policy."
Hungary was hard hit by the global financial crisis and is still facing daunting economic challenges. In 2008, it was forced to rely on a bailout of euro20 billion ($27 billion) from the International Monetary Fund and other institutions to avoid bankruptcy.
Government officials this summer have made contradictory statements about the state of the country's finances, increasing uncertainty in the financial markets about Hungary's credibility and hurting the stability of the forint.
(Excerpt) Read more at finance.yahoo.com ...
Ssssshhh—don’t give the obamathief any ideas
Coming soon to America! Socialism can’t survive without the government stealing other people’s money.
Too late now, Jesse Jackson has had his eye on pension funds for twenty years.
Private retirement acounts, piggy banks, money the tooth fairy gave your kid... It will never be enough for government.
I hate to say this, but when Jackson first said that about pensions I thought he was joking. My bad.
They'll probably com after our 401Ks after that...
Argentina did this recently and US Marxists, oops I meant democrat party “progessives,” have been threatening this for the last few years.
Seizing pension funds in Hungary or America just pushes the day of reckoning a few years down the road. In three to five years at the most, the seized capital is liquidated, the debt is worse and the governments won’t even be close to able to make the promised payouts in real value terms. In fact, they will have all long since defaulted and the currencies become worthless, even if the governments somehow survive. Fascism is the almost inevitable temporary fix.
“I have seen the future — and it is Hungarian.” — apologies to Lincoln Steffens.
Most U.S. pension funds are heavily invested in Treasuries, state bonds and "blue chip" stocks like GM and Citibank.
All of that will become as worthless as Social Security by the time the Wee Wee and the Rats have worked their magic.
Americans are next.
Some on the left were writing about this 20 years ago.
To them it just was not FAIR that some people had their own private pension accounts.
Don’t fool yourself into thinking that they haven’t already been coveting your IRAs and 401k’s for a long time.
We already paid.
I know this is being floated in Washington. They’ll do to our IRAs and 401Ks what they did to Social Security.
Note to all: Hungary is politically dominated by a political supermajority of the national *conservative* people’s party. The socialists have far less seats in their parliament.
So this looks to me as a situation of “conservatives” trying to preserve a socialist system that has failed, by looting private systems that are succeeding.
First to go will be the tax exemptions of interest and dividends in retirement accounts.
As The Kenyan posted on his campaign website, long deleted: "Tax exemptions on retirement accounts are government subsidies. Why should the government subsidize anyone rich enough to have a retirement account?"
Next up will be the ultimate Social Security means test: If you have a private pension or retirement account, you don't qualify for SS.
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