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Poland Confiscates Half Of Private Pension Funds To "Cut" Sovereign Debt Load
Zerohedge Fund ^ | 9/6/2013 | Tyler Durden

Posted on 09/06/2013 2:35:30 PM PDT by EBH

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.

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. The funds would effectively be left with only the equities portions of their assets, even this would be depleted, and there will be uncertainty about the number of new savers joining.

.... After all, this is a last ditch step which no rational person would engage in unless there were no other option. Simple: there were no other option, and the driver is the same reason the world everywhere else is broke too - too much debt.

(Excerpt) Read more at zerohedge.com ...


TOPICS: Business/Economy; Foreign Affairs; Government
KEYWORDS: debt; pensions; poland; private
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1 posted on 09/06/2013 2:35:30 PM PDT by EBH
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To: EBH

We allz bout to be victims of Pogoism

Its fur the chilrunn yaknow


2 posted on 09/06/2013 2:36:32 PM PDT by NormsRevenge (Semper Fi --)
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To: NormsRevenge

“OFE” now = “SOL”

BOHICA!


3 posted on 09/06/2013 2:38:47 PM PDT by TurboZamboni (Marx smelled bad & lived with his parents most his life.)
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To: NormsRevenge

Is this “ghetto” Polish? :-))


4 posted on 09/06/2013 2:39:23 PM PDT by QQQQ
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To: EBH

Soon coming to a North American republic near you.


5 posted on 09/06/2013 2:50:37 PM PDT by Jack Hammer (American)
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To: EBH

They have no guns to retaliate. However I am willing to bet the bubble of protest is starting to enlarge.


6 posted on 09/06/2013 2:57:00 PM PDT by SkyDancer (A white woman would be accused of racism if she gave birth to a white baby.)
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To: EBH
"confiscate - the bulk of assets owned by the country's private pension funds ..., without offering any compensation."

Did they really confiscate without "any compensation". Or did they replace it with government debt?

7 posted on 09/06/2013 2:58:17 PM PDT by DannyTN
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To: EBH

socialists and big govt authoritarians (ie: progressives) quickly running out of other people’s money


8 posted on 09/06/2013 2:59:36 PM PDT by sten (fighting tyranny never goes out of style)
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To: Jack Hammer

Soon coming to a North American republic near you.

That’s what I’m afraid of. My wife plans to retire in the spring of 2015. Will obama take her and everyone’s 401K funds. There are trillions of dollars out there in these funds and I know the politico’s are frothing at the mouth with the thought of confiscating our money.


9 posted on 09/06/2013 3:06:29 PM PDT by lardog ( Obama should be locked up.)
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To: EBH

Co za asy!


10 posted on 09/06/2013 3:08:35 PM PDT by Jack Hydrazine (IÂ’m not a Republican, I'm a Conservative! Pubbies haven't been conservative since before T.R.)
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To: lardog

I envision them to first force everyone to convert their traditional IRA’s and 401K’s into Roth Accounts.


11 posted on 09/06/2013 3:14:25 PM PDT by chopperman
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To: lardog

As if they didn’t confiscate enough of it already...


12 posted on 09/06/2013 3:16:14 PM PDT by Jack Hammer (American)
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To: EBH

“Poland said on Wednesday it would transfer 121 billion zlotys in bonds held by state-guaranteed private pension funds to the state and subsequently cancel them to curb the public debt”

per Reuters. http://www.reuters.com/article/2013/09/05/poland-assets-markets-idUSL6N0H11GJ20130905

Apparently they also plan to go after at least some of the equities, as well.


13 posted on 09/06/2013 3:16:31 PM PDT by PAR35
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To: chopperman

What is it about a Roth that makes it easier to confiscate?


14 posted on 09/06/2013 3:26:00 PM PDT by bkopto (Obama and Biden are merely symptoms of a more profound, systemic disease in American body politic.)
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To: chopperman
I envision them to first force everyone to convert their traditional IRA’s and 401K’s into Roth Accounts. Would this make it easier for the fedgov to take the funds? This is one of the reasons I'm not a rich guy. I don't understand financial stuff.
15 posted on 09/06/2013 3:32:40 PM PDT by lardog ( Obama should be locked up.)
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To: EBH

Yes, those employed by government will cut their predecessors’ pensions in order to avoid layoffs.


16 posted on 09/06/2013 3:37:54 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: Jack Hammer

Mmmm....you left out the word banana, yes? >> “...North American banana republic near you.”


17 posted on 09/06/2013 4:07:52 PM PDT by citizen (There is always free government cheese in the mouse trap.....https://twitter.com/kracker0)
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To: lardog

Me either. I’m a verbal/literary kind of person, which is great when it comes to spelling bees, etc., but I have a hard time understanding economic issues. And that’s another reason I’m not rich, lol.


18 posted on 09/06/2013 4:07:53 PM PDT by Prince of Space (Be Breitbart, baby. LIFB.)
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To: Prince of Space

Well, it could be a lot worse. We could be on welfare or something. I’m glad to hear I’m not in this boat alone. Good luck to you.


19 posted on 09/06/2013 4:16:25 PM PDT by lardog ( Obama should be locked up.)
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To: bkopto

Its not the confiscation angle but the fact that the conversion would force the sheeple to pay taxes up front.


20 posted on 09/06/2013 4:21:49 PM PDT by chopperman
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