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When the Going Gets Tough, Governments Seize Private Pensions

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If you were of an Austrian economics bent, and could read Polish, you'd find this article from, about governments seizing private pension funds to make up for revenue shortfalls, fascinating. But perhaps you cannot read Polish? Very well. The Christian Science Monitor has an English version of the article translated via The Adam Smith Institute Blog.

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.

A slightly less drastic situation is developing in Poland. The government wants to transfer of 1/3 of future contributions from individual retirement accounts to the state-run social security system. Since this system does not back its liabilities with stocks or even bonds, the money taken away from the savers will go directly to the state treasury and savers will lose about $2.3bn a year.
I sure hope the U.S. government doesn't touch my private pension. Wait, I want a private pension!
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