Grand Theft Pēnsiō – Europe’s ‘Economic Superstar’ Steals 5% Of Private Super Funds

25 May

Think the government of a “strong” economy like ours – running big budget deficits – would never steal some of your superannuation?

Don’t be deceived.  This is coming to Australia. Barnaby said so.

Just as Barnaby was right in 2009 when he warned of the possibility of the US defaulting on its debts, there is ever-mounting evidence from around the world that Barnaby is right about this too.

Poland was the only economy in the European Union to achieve economic growth through the GFC.  It then doubled economic growth in 2010. It is the sixth largest economy in the EU, and is considered “Europe’s new economic superstar“.

Despite all this, it has recently passed laws to start stealing its citizens’ private retirement savings.

From Warsaw Business Journal:

The government’s controversial pension reform plan, which slashes the percentage of workers’ salaries going to private pension funds (OFEs) from 7.3 to 2.3 percent, became law on May 1. OFEs will start receiving the reduced amounts from June.

The changes mean that the state-controlled social security and pension fund, ZUS, will now receive 17.22 percent of workers’ salaries, a five percent increase on the previous amount of 12.2 percent.

Critics have said the changes were nothing more than some creative accounting by the government to shore up its budget deficit

The critics include several respected economists, most notably Leszek Balcerowicz, the former finance minister and National Bank of Poland head.

Krzysztof Rybiński, a former vice president of the NBP, has gone even further and is collecting signatures for a class-action lawsuit against the government for “lost gains as a result of the changes in the pension system.”

Even the constitutionality of the law has been questioned. Jerzy Stępien, former head of the Constitutional Tribunal, said if he was still head of the court, he would question the constitutionality of the reform in its most important points.

Poland is far from being an isolated case.

More and more governments around the world have been enacting “reforms”, to get their hands on their citizens’ private retirement savings.

From Global Pensions:

It appears moving backwards on pension reforms has become the thing to do on both sides of the Atlantic.

Hungary last year moved much of its private pension assets to the state. Last month, new rules came into effect in Poland diverting 5% of the 7.3% of salary going to private pension funds to the state.

In both cases, the changes represented a step back from reforms that led to significant savings on the countries’ balance sheets.

But another recent reversal we’ve seen has come from Latin America. In the 1990s, Bolivia’s decision to move its pension assets from the state to private managers placed it among the most advanced pension systems in the region. However, the current government has decided to nationalise the assets once more claiming it is creating a pension system that is equal for all.

Last week we saw that heavily indebted governments in Argentina, Hungary, and Ireland have also resorted to super-stealing.

The most dramatic example of a government dipping into its citizens’ retirement savings is the once-mighty USA. Just last week, the U.S. Treasury began tapping the retirement savings of federal workers (public servants) to shore up government finances.

Barnaby Joyce has given early warning of the same thing happening right here in Australia:

Of course, the public servants will not be happy when we use their retirement savings, put aside in the Future Fund, to pay off some of Labor’s massive debt.

Learn all about Barnaby’s warning, and the growing wave of super-stealing, in these previous articles, “No Super For You!” and “Grand Theft Pēnsiō”.

Barnaby is right.

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