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Friday, November 26, 2010

Hungary Pensions get an Ultimatum

In a Bloomberg article by By Zoltan Simon entitled "Hungary Follows Argentina in Pension-Fund Ultimatum, `Nightmare' for Some", Simon points out how Hungary is giving its people an ultimatum "hand over your private pensions to the state or lose your state pension".  
Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.
I don't know about you, but handing over your life savings to an entity that is spending it faster than they can get it doesn't spell retirement down the road.  Most governments aren't very good at reducing their spending, seems like all they do is tax more and spend more.
“This is effectively a nationalization of private pension funds,” David Nemeth, an economist at ING Groep NV in Budapest, said in a phone interview. “It’s the nightmare scenario.”
 There have been numerous articles written this year suggesting the U.S. may do the same thing, this is literally the extraction of the wealth from the middle class.  [ Read More ... ]

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