Tag Archive: Pensions


Source: CS Monitor

Hungary, Poland, and three other nations take over citizens’ pension money to make up government budget shortfalls.

People’s retirement savings are a convenient source of revenue for governments that don’t 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.

Source: CNN

Thousands of workers across France staged a one-day strike Tuesday to protest government plans to raise the retirement age.

More than 200 demonstrations were planned throughout the country Tuesday to coincide with the walkout.

Workers from both the public and private sectors were on strike, including those in transportation, education, justice, hospitals, media, and banking.

The strike, planned since June, is a reaction to government pension reforms aimed at raising the age of retirement to 62. The maximum retirement age is currently at 60, though some people in hardship posts may retire earlier, depending on the job.

More than a dozen unions and federations called for workers to strike Tuesday, though not everyone walked off the job. The Ministry of Education, for example, said only 30 percent of their sector is affected.

The strike also led to a reduction in train services.

President Nicolas Sarkozy’s planned reforms have angered many in France.

Among them is postal worker Isabelle Alouges, who has delivered the mail for 30 years. She had been planning to retire next year when she turns 55, but if the reforms become law, she may have to work until age 60 or beyond in order to earn a full pension.

An official from her union, PTT Sud, says postal workers feel betrayed because they are being made to pay by working longer when the government could fix France’s ballooning pension plan deficits by imposing more taxes on the rich.

“My feeling is one of unfairness because there is a bad sharing of national wealth,” Nicko Galapides told CNN. “That’s the thing — unfairness.”

Pension reform is likely to be a defining moment in Sarkozy’s presidency. There have already been repeated national strikes and demonstrations over the reforms and it has unified the opposition like no other previous issue.

One of Sarkozy’s top aides said over the weekend that while there is some flexibility on the details, the fundamentals of pension reform must be enacted, since increasing life expectancy increases the financial burden on the pension system.

Complicating things for the government are Sarkozy’s poor approval ratings, which over the summer hit the lowest point of his presidency.

“There is a kind of antipathy against Nicolas Sarkozy at the moment,” said Guillaume Petit, of the polling agency TNS Sofres. “His approval rating is very low. We have just 30 percent of French opinon trusting him as a president. This is very low for a president.”

Last month, polling agencies sent another political wakeup call when polls for the first time indicated that several French politicians could beat Sarkozy if he runs for re-election in 2012.

Source: New American

The Obama administration is “taking the first steps to confiscate retirement dollars,” according to Dr. Jerome Corsi who predicts that the end result will be retirees with 401(k) plans holding near-worthless government debt “that will be paid off in a devalued currency worth … pennies on the dollar.”

The move to confiscate those retirement dollars for government purposes was best illustrated by Christina Kirchner, President of Argentina, in 2008 when she announced plans to seize her citizens’ private pension funds. Writers at the Heritage Foundation said that while Kirchner claimed such seizure was necessary to protect her citizens’ investment accounts from the global meltdown, “most observers believe[d] her real motive [was] to use the $30 billion in seized assets to ease the massive debt obligations her leftist spendthrift government [had] run up.” The Wall Street Journal agreed, saying that “taking over the … pension fund assets [would] ease the cash crunch faced by [her] government.”

Corsi said he has a letter from the Treasury Department, Bureau of Public Debt, informing U.S. citizens that the federal government is rolling out a new program called “Treasury Direct” that will allow citizens “to purchase, manage, and redeem…savings bonds” electronically, as well as offering an option to purchase such bonds automatically through payroll savings or a personal checking account. This happened to coincide nicely, according to Corsi, with a bill offered by Senator John Kerry (D-Mass.) to create “Automatic IRAs” that would require all employers and employees to invest in IRAs using that automatic deduction option, “whether they want to do so or not.”

And this happened to coincide also with a program being pushed by the Service Employees International Union (SEIU) called “Retirement USA” which would create a government-forced retirement program with assets being directed into special Treasury Retirement Bonds, or R-Bonds. “Retirement USA” is promoting the idea that all workers have a “right” to a government retirement account, in addition to Social Security and any private pension plans those workers already have in place. Others behind “Retirement USA” also support more government dependency for workers, including the AFL-CIO, the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare and the Pension Rights Center.

All of this is being promoted by the idea that individual citizens aren’t saving enough for their retirement, and that consequently government has to “do something.” Rep. Jim McDermott (D-Wash., above photo), Chairman of the House Ways and Mean’s Committee’ Subcommittee on Income Security and Family Support, is confused about whose money is in those 401(k) plans: the individual contributor, or the government. He said that “since the savings rate isn’t going up for the investment [Congress is making] of $80 billion [in 401(k) tax savings], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”

The world view of Rep. McDermott is revealing, and brings clarity to the point of view of many in the Washington establishment that the $4.5 trillion currently invested in 401(k) plans and other private pension plans that enjoy tax breaks actually belong to the government, and that when Congress loses $80 billion that would otherwise flow to Washington due to those tax breaks, it’s an “investment” that must “generate what we say it should”, or else it must be replaced with something else that works better.

The real “story behind the story” was revealed by Joe Wolverton here when he said,

…since the day of his inauguration, Barack Obama and his congressional co-conspirators have consistently and unapologetically set out to systematically nationalize the economy of the United States: first the banks; then the insurance companies; then the auto industry; then healthcare; and now the piece de resistance, the private savings accounts of millions of middle-class Americans.

But, thanks to the SEIU and their program “Retirement USA,” it’s all dressed up to look like a good deal for unsuspecting owners of retirement plans. In “Making the Case for a New System” they take the view that “A secure retirement is part of the American dream. Yet our retirement system is failing many Americans. Social Security is the cornerstone of our system, but as currently structured, is not meant to be our only retirement program. Pensions and savings plans are supposed to fill the gap, but too many workers don’t have plans, and too many plans don’t do the job.” They complain that:

Private retirement plan coverage is not UNIVERSAL…

For millions of Americans, private retirement benefits are not SECURE…

And Private retirement benefits are not ADEQUATE…

And, continues “Retirement USA”’s website, “Social Security must be preserved and strengthened… [and] we must encourage employers to offer and maintain them.”[emphasis added]

Underlying all of this is, of course, the statist presumption that government knows best what’s good for the citizens, and when the citizens’ behavior fails to meet government expectations, then mandates and force must be used to do for those citizens what the government thinks is best.

And the fact that Washington is looking at annual trillion-dollar deficits “for as far as the eye can see,” that $4.5 trillion of private monies is just too tempting to ignore.

Source: EU Times

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First They Destroy Private Healthcare in America – Yes, the socialist Democrats won their first battle to destroy the private healthcare system in the US but the automatic IRA bill now in Congress is their next attack to also control, confiscate and destroy the private retirement system. Ultimately, nationalizing healthcare is designed to create a major new government revenue stream by replacing private health insurance with a nationalized, mandatory, government program and their goal is identical with your retirement plan.

Washington will decide the annual forced healthcare premiums on all Americans with the middle and upper wage earners paying far higher premiums than the subsidized voting constituencies who will be the primary beneficiaries of the program. Their goal is to allow Washington to steal much of the annual health premiums (taxes) for current revenue needs and to bailout and subsidize with your premiums the health programs for the voting blocks of poor and underemployed, illegals, unions and the millions of city, county, state and federal government employees. Eventually there will be no private competition available except for the very wealthy and Washington will constantly increase premiums just as they raise taxes today.

Next They Steal Your Private Retirement Benefits – Just as with the Obama Administration plans eventual nationalization of healthcare, the tremendous amount of funds in private retirement plans and IRA accounts are also being targeted to meet future revenue needs. Bills have just been introduced in both the House and Senate to create the new Auto IRA accounts which will at first be voluntary but later will become mandatory like Social Security and I expect the early 3% employee after tax contribution levels to eventually rise to 10 to 15% of compensation rising even more than Social Security has increased over the years. Read this August 17th article in Investment News at for more information.

Just Robbery Pure & Simple – The Auto IRA is the first step to grab and control your retirement assets and replace our private system with a forced, government controlled Social Security type program. In addition they will force much of your retirement funds into buying junk treasury bonds along with the Federal Reserve when the dollar/national debt crisis hits as billions of retirement funds become the buyer of last resort when the rest of the world are dumping dollars and treasury securities. Americans with substantial private retirement benefits will also likely be “means tested” out of their promised Social Security benefits and discover their private retirement benefits will be subject to confiscatory levels of taxes and penalties which will even target previously taxed Roth IRA accounts.

Bipartisan Theft – But don’t think a GOP victory in the fall elections or 2012 will safeguard your retirement assets as Washington’s need for new wealth is a bipartisan effort by both political parties. Note that the leading “Washington based” conservative think tank disagrees with my analysis of the threat to your retirement assets. I take exception to the views of David John, The Heritage Foundation’s leading analyst on issues relating to pensions, financial institutions, asset building, and Social Security reform but read his The Automatic IRAs: A Conservative Way to Build Retirement Security and you will see how even some traditional conservatives are supporting the latest Washington retirement wealth and power grab.

Read More About the Retirement Threat & Protection Solutions – I have already covered the proposals in detail in two lengthy online reports: Get Ready For the Obama Retirement Trap at published on 1/28/2010 and The 10 Step Countdown To Retirement Plan Nationalization at published on 3/22/2010.

Please take the time to review both reports in detail which covered the threats when the Obama Administration first proposed this new program back in January 2010 and also read David John’s glowing support for the new Washington retirement scheme. Then decide for yourself if Washington is here to help you for a change or out to steal you blind as usual. Together, the reports above provide a confiscation timeline and actions you can take now to defend your retirement security and benefits.

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