European nations begin seizing private pensions

It won't be long before our own politicians are stating that the only way to save Social Security is to confiscate our private pensions, 401(k)s and IRAs. If this sounds absurd then you must have missed the Senate hearings in October that were discussing this very idea. (See the actual video of the Senate hearing here)


European nations begin seizing private pensions

By Jan Iwanik, Guest blogger / January 2, 2011

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 organized 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.

You can read the rest of the article here.