Poland Confiscates Half Of Private Pension Funds To Cut Sovereign Debt Load

Zerohedge ^ | 09/06/2013 | Tyler Durden

[Rusty0604]

While the world was glued to the developments in the Mediterranean in the past week, Poland took a page straight out of Rahm Emanuel's playbook and in order to not let a crisis go to waste, announced quietly that it would transfer to the state - i.e., confiscate - the bulk of assets owned by the country's private pension funds (many of them owned by such foreign firms as PIMCO parent Allianz, AXA, Generali, ING and Aviva), without offering any compensation. In effect, the state just nationalized roughly half of the private sector pension fund assets, although it had a more politically correct name for it: pension overhaul. Catastrophic consequences for fund flows aside, the Polish prime minister had a prompt canned response: "We believe that, apart from the positive consequence of this decision for public debt, pensions will also be safer."

You see, he is from the government, and he is confiscating the pensions to make them safer. Confiscation is Safety and all that...

[Rusty0604]

That same argument has been made here in U.S.; that our pensions will be safer if the gov't takes them over. Oh, and fairer too, because they can be redistributed from those that worked and saved to those that didn't.

[Regulator]

Gee...guess the Poles didn’t get rid of the Commie Looter class from their government, did they?

[4Liberty]

We’re all GM bondholders now......

[GeronL]

“It can’t happen here”

un huh

[Lorianne]

Don’t think for a nanosecond that it can’t/won’t happen here.

[GeronL]

bump

[grobdriver]

he state just nationalized roughly half of the private sector pension fund assets

Well, hell - why not take it all?

Or would that be too much for the Polsheple?

[MeganC]

Gee...guess the Poles didn’t get rid of the Commie Looter class from their government, did they?

Which should stand as a lesson to us that if we come to blows with our liberal countrymen that we should make sure none of them are left breathing at the end of it lest they slither back into government where they can wreak havoc again.

[grania]

it can't happen here

The feds can confiscate a real lot just by tax policy. I'd think it's a real nice tax windfall for the feds when baby boomers who've saved have to take out their IRAs

[I want the USA back]

They didn’t learn their lesson from their life under communism. What they did is theft.

[Rusty0604]

Is your 401K about to be nationalized? WASHINGTON, February 3, 2013 ― The $19.4 trillion sitting in personal retirement accounts like the 401K may be too tempting an apple for a government that is quite broke, both monetarily and morally. The U.S. Consumer Financial Protection Bureau director Richard Cordray recently mentioned these accounts in a recent interview, stating “That’s one of the things we’ve been exploring and are interested in, in terms of whether and what authority we have.” This agency, created by the 2010 Dodd-Frank-Act, is very concerned about how safe your retirement savings are. They are apparently concerned that retiring baby boomers may become victims of financial scams. Read more: http://communities.washingtontimes.com/neighborhood/politics-blue-collar/2013/feb/3/your-401k-about-be-nationalized/#ixzz2e8sRSuRj

[RoosterRedux]

This has only been reported in a handful of blogs so far.

I think we need to wait for confirmation before assuming it has happened.

[Cicero]

And Tusk is pretty conservative, too, on most things.

[Lazamataz]

I need confirmation just like Rooster. Poles tend towards capitalism.

[RKBA Democrat]

“I think we need to wait for confirmation before assuming it has happened.”

It’s not in the interests of the powers that be that stories like this get wide distribution.

[Rusty0604]

UPDATE 2-Poland reduces public debt through pension funds overhaul

http://www.reuters.com/article/2013/09/04/poland-pensions-idUSL6N0H02UV20130904

[Uncle Miltie]

A: Shoot them.

[Rusty0604]

By way of background, Poland has a hybrid pension system: as Reuters explains, mandatory contributions are made into both the state pension vehicle, known as ZUS, and the private funds, which are collectively known by the Polish acronym OFE. Bonds make up roughly half the private funds’ portfolios, with the rest company stocks.

And while a change to state-pension funds was long awaited - an overhaul if you will - nobody expected that this would entail a literal pillage of private sector assets.

On Wednesday, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings.

We are supposedly capitalistic, but this very same thing has been thrown around here. Who’s going to lend the gov’t by buying treasuries when the Fed and foreigners quit?

[RKBA Democrat]

It’s coming here soon enough. The assets in 401(k)s are too big and too easy to simply seize. Although it won’t be a “seizure” per se, it’ll be forced “investments” in government bonds.

BTW, Zero Hedge does not require excerpting.

[The_Media_never_lie]

Yes, a tax windfall when IRA’s are withdrawn, but that was the deal. However, confiscation is stealing and this talk of $3 million is too much is scary.