NPRF pension raid.

What you are reading RIGHT NOW is the new media.

if they wanted a gamble they should back KK big in the hurling, this just smacks of desperation. we have 5 years now of borrowing money to spend on stimulus like dole/PS pay and the health sector, it hasnt worked and it wont.

Well we’re about to use our last paddle as firewood.

But how much of the “money” in the NPRF is actually real money? Actual third party liquid realizable assets? That can be exchange traded? If I remember correctly in the last few years of the bubble most of the annual contribution was actually short bonds issued by the government. So in effect just one government dept owing money to another government dept.

So maybe just a slight of hand to liquidate another part of the national debt. The bonds will not be rolled over. The balance will run down. And by the time it is fully liquidated and netted out no one will notice that there was not much genuine money in the fund to start with. … Update.pdf

Yeah, if you look at the start of the fund, with the Eircom bung, and then match the increase in the fund with the increase in bonds outstanding (not the netted debt), you can see that most of the NPRF was borrowed money. It was designed to speculate and it failed miserably.

any country that starts a SWF when it still has outstanding debt is doing the same; the whole thing was about hiding the money from the unions because saying No was out of order

Very interesting. Thanks for the link. It adds up to 6B. I thought there was supposed to be a lot more money in the pot or was that the stuff that was lost during the IMF heist a few years ago?

I’ll go dig up the old budget numbers from the bubble years. I remember being surprised at the time at just how much was being borrowed to add to the fund.

But that was long ago and far away.

So when you subtract the cost of money from the annual net yields did it actually break even?

Or was it just another ghost estate in Leitrim…

Well at least it looks like they have around 6 billion euro of stuff to sell. Which would cover almost 6 months of this years deficit on government spending.

I think another way of looking at it was it was an answer to complaints from the ECB and others that the economy was overheating. The Irish government tried to deflect criticism by saying look we’ve set up a SWF so our huge ramp up in public spending doesn’t matter, we’re prudent. I’d argue it enabled the unions to get what they wanted.

The country was borrowing and spending money so fast that it was difficult even for Bertie to spend it all, the SWF captured some of the borrowed money via taxation. It doesn’t compare with the funds set up by countries with large natural resources, ours is simply an artefact of the bubble.

I personally never reckoned I’d see any of the fund, a fund designed to fund guaranteed public sector pensions and unguaranteed PRSI pensions has a lopsided look about it. Also the timing of when the fund was supposed to mature seems to hint that it was a tool to manage the greater demands on PRSI as post-95 public servants retire.

While it’s a lot of money a dormant 6B fund isn’t worthwhile ring fencing for pensions as it’s simply too small. Clearly we’re not going to be adding to the fund for the foreseeable future so however the Irish government “solves” the pension problem this fund isn’t going to be the answer.

A side issue may be that the EU might not like to see a precedent set where bubbles can be allowed run and governments are allowed permanently capture bubble revenue by a SWF. It’s a bit like developers taking huge risks in the knowledge that they could hide some of the money when things blew up.

Given Germany’s demographics, I’d suggest you’re actually more likely to claim your Irish pension than your German one.

Reshaping the world’s $20 trillion pensions cash pile → … -cash-pile

Argentina Makes Grab for Pensions Amid Crisis →
Oct 22, 2008

France seizes €36bn of pension assets - → … ion-assets
29 Nov 2010

Irish Bombshell: Government Raids PRIVATE Pensions To Pay For Spending → … ram-2011-5

EU’s top court says Ireland must pay Waterford Crystal pensions → … 2-Apr2013/

By the time todays 30 and 40 somethings come to retire, we will only be eligible for state pension from age 68 if we can show we are unfit to work, otherwise we will be working in McDonalds or other low paying jobs to supplement our retirement funds. I visited the North East US two years ago on business, and one of the things that stood out I noticed it was mainly old guys working immigration, the bus to the hire car, the road toll booths and many other menial tasks, that’s one possible future. This is the generation that is carrying the taxation and debt burden, there is very little room to put anything aside for s pension like our parents did after they finished paying their 15/20 year mortgage, the reason being we have families to bring up, we started later than our parents and we are stuck on 25/30 year mortgage contacts that may just get paid off when we get to todays retirement age especially if one partner in the relationship is out of work. Under these pressures what margin have the majority of households that are fortunate to have work got to put anything aside for retirement?

It is highly probable that private pension funds will ultimately be seized or levied like they do in Britain to bail out the broken funds. At this time it suits the Irish government to pick away at the funds rather than cannibalise them outright, make no mistake they regard private pension funds as their rainy day fund.

The absolute amount of borrowed government debt outstanding increased, though. The money that was saved was borrowed (the capital spend was funded by borrowing, while some of the tax revenue (tax on private borrowing) was saved). The national debt figures were expressed as a proportion of GDP and anyway the figures were generally given net of the ‘savings’ in the NPRF.

Smokes and daggers…

Ah, found my previous calculation…

Excellent yogan, that is exactly it, 6 poxy billion from the Celtic Tiger and a boatload of personal debt to generate it plus a brutal hangover in the guise of current account defecit.

I love their idea of stimulus - building roads and schools in a country with a declining population and 100 miles wide, great stuff. If they came out with a serious plan for mass transit, for developing indigenous industry, or even for consolidation of the agricultural industry it might at least stall the skeptics for a few minutes, but more of the same auld shite with money that is already allocated, well just moving the deck chairs really.

Noonan is really getting on my nerves these days.

Is the new Limerick regeneration part of this NPRF extravaganza? That announcement worried me. Also a big photo op for Noonan with the head of CPL Industries, announcing new jobs for Limerick in the form of a new “biofuels” plant. Does that mean there is Irish public money going into it? Practically all biofuel investments in the last ten years have been total scams. Can’t find any info on this one, but the company does smokeless solid fuels. Also mentioned that it would be making “briquettes” and looking for Irish biomass suppliers. Reading between the lines it sounds like a bit of a greenwashed title for making compressed fuel pellets from waste biomass. The problem with waste biomass is that it’s only waste until there’s a market for it. Then you have to buy it. And you’re competing with the likes of Canadian fuel pellets which genuinely do come from an industry with a large waste surplus. My bet is this place sucks in investment and tax breaks, gets on the telly with Duncan Stewart and his smokeless (read: more expensive) fuels campaign, and then goes tits up in five years. … -1-2191567

Maybe the dole for life crowd are the smarter ones.

I think this is a courageous move by the government!

A rational taxpayer might start investing additional income into a personal pension to offset the decline in their social welfare pension.

While the government are pump priming the economy with additional spending,
pension funds are extracting income out of the economy.

The question we need to ask is if the government will spend the money in a wiser way
than private individuals were spending their money. Otherwise there will be little or no long-term effect on the economy.

Also, what effect will the NPRF liquidating their 6billion investment have on the stock market?

From memory there was €20bn there at the time the Troika stepped in. So if there is only €6.4bn left then we have used €13.6bn. I think it went into government coffers as part of the pool to fund our deficit and bail out the banks.

+1 Demographics are one of the few bright spots for Ireland v Germany. We’re at opposite ends of the scale.
From Eurostat