Hungary Follows Argentina in Pension-Fund Ultimatum, `Nightmare’ for Some → bloomberg.com/news/2010-11-2 … -some.html
AIB and BoI have huge pension overheads.
This is the kind of thing that would get me out on the street.
I actually felt sick reading that, and couldn’t finish it. If the Irish government go on an asset grab campaign like that (especially while over paying themselves and the PS) we really are fu(ked. We will go back to a cash only enconomy, nobody will invest or hold their money in a bank for fear of it being confiscated. If any move could further undermine confidence in the Irish fiscal system this is it. I am now worried -more than I have been in recent days.
It is this kind of thing that would drive me to gold bars hidden in the woods.
Unfortunately I think we are going to see a lot more of this kind of thing in the future - governments going after your money and wealth, more and more, and in more and more unconventional and inventive ways.
This entails that any investment strategy ‘going forward’ should have as its prime intent, the keeping of government and bankers eyes away from your wealth. ie. if they know you have it, they will find a way to get it from you, at some point in the future.
This will be the case until the current symbiosis of government and big business and finance is torn asunder. However, the way things currently stand, government depends utterly on the science and infrastructure and institutions of big business and finance, to wield the sort of power and influence that it has got used to. So an end to this symbiosis not yet on the horizon as far as I can see.
A whole new paradigm will be needed. One that our current institutional and (so called) democratic frameworks and thinking are incapable of delivering, unfortunately.
It is all about accounting rules of EU, some thing would likely happen in Poland. Bloomberg is as usual very negative about Hungary, as they decided to proceed with taxing banks to reduce deficit. Root of problem is that we decided that compulsory pension contributions would now go to private institutions to invest, so in theory, when population ages there is less dependance on contributions of other workers and no need to heavily tax future generations. However it means that for older generations who are now taking or about to start taking pensions there is now enough money and state budget has to make contributions to the pot. Idea was that this gap would be covered by selling state assets, which were legacy of socialism (state owned most companies). For political reasons(in Poland state companies are required to give jobs for friends, family and supporters of current party in power) it did not work too well. Those transfer from budget could be seen as a way to reduce overall debt on country (Polish view) or as a current expenditure (EU view).
I think it would be fair if AIB and BOI pension funds had to buy govt debt as their investments for a long time.
Those companies wouldn’t exist without state support.
Nationalisation would be a massive step though.
Although if both public and private sector workers paid into the same Defined contribution scheme if might end a lot of the chicanery of the pensions industry -With huge asset management fees and separate huge schemes for company directors.
+1
The 50% or so of the population who have no pension provision are unlikley to be too upset by such a move of course, were our lot to try something similar. It’s almost an inevitability at this stage.
Gyorgy Matolcsy has one eye on your pension apparently
https://www.bloomberg.com/apps/data?pid=avimage&iid=iFWbwKuNkCFs
I’m sure it wouldn’t be hard to make the people who made provision for their future and saved away the pennies look like “Rich people protecting their fat pensions”
This seems to be the current goal alright… target pensions, deposits etc… the “those who can afford it” line…
FFS anyone who saves and is sensible can afford it… just sacrifics some shit and put in the effort.
It’s not like the prudent have magic money trees in their attics!
Its all too easy to turn “prudent savers who did without” into “those who profited from the tiger”
I thought everyone wanted a PS pension. Joking aside I would have thought that this is the type of thing that would wreck our reputation for FDI.
Let me say it again. This is equivalent of using money from NPRF. Or offering PRSA owners conversion to Public Sector pensions. Bloomberg is very pro-IMF. EU hates private pensions. This story is REALLY not complete.
Its easy!
If you have any savings and are not in debt then you “profited from the bubble”
If you have savings but also have debt then you are “comfortable middle class”
If you have no savings and big debts then you are “struggling homeowners”
If you have no saving and small debts then you are “the poor”.
And if you have mega debts that can sink a bank and contribute to a chain of events that ends in possible sovereign default you are “one of the lads”
The ironic thing is that the situation that Hungary is in a much better situation then we are. They already have their budget deficit brought down to 4% and the debt/GDP ratio is at 80%.
People here have a severe emotional prejudice that they because they could *personally *lose money, the government would never let it happen. The reality is that I would expect something similar to what has happened in Hungary to happen here. If you look within the 4 year plan, there is already provision for it.
‘encourage’ Tony Soprano style?
What the Hungarians are proposing isn’t much different to Tony Soprano. You surrender control of your pension, or you lose most of it. Some choice!
Inevitable and I have a sizeable pension fund. However, raiding bank accounts may not be so, as we are in the Euro (but I would’t be betting on it).