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France Is Next To Seize Pension Funds..

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If the recent Hungarian "appropriation" of pension funds, and today's laughable Irish bailout courtesy of domestic pension funds sourcing 20% of the "new" money was not enough to convince the world just how bankrupt the entire European experiment has become, enter France. Financial News explains how France has "seized" €36 billion worth of pension assets: "Asset managers will have the chance to get billions of euros in mandates in the next few months for the €36bn Fonds de Réserve pour les Retraites (FRR), the French reserve pension fund, after the French parliament last week passed a law to use its assets to pay off the debts of France’s welfare system. The assets have been transferred into the state’s social debt sinking fund Cades. The FRR will continue to control the assets, but as a third-party manager on behalf of Cades." FN condemns the action as follows: "The move reflects a willingness by governments to use long-term assets to fill short-term deficits, including Ireland’s announcement last week that it would use the country’s €24bn National Pensions Reserve Fund “to support the exchequer’s funding programme” and Hungary’s bid to claw $15bn of private pension funds back to the state system." In other words, with the ECB still unwilling to go into full fiat printing overdrive mode, insolvent governments, France most certainly included, are resorting to whatever piggybanks they can find. Hopefully this is not a harbinger of what Tim Geithner plans to do with the trillions in various 401(k) funds on this side of the Atlantic.

More from FN on how first France, and soon every other socalized pension regime, will continue to plunder a nation's life saving to fund short-term deficits:

The decision has prompted a radical restructuring of the FRR’s investments. The new strategic investment plan, which will be released in the new year, will see a rapid reduction in its 40% allocation to equities and a shift to cash and short-term government bonds, according to a source close to the situation.

There will be a focus on liability-driven investment, where asset managers are told to minimise risk by matching assets closely to liabilities.

The transfer of the FRR’s assets to Cades is controversial. Force Ouvrière, a trade union confederation, accused the government of “provoking the clinical death” of the FRR.

The decision was taken within the context of this year’s pension reform, which provoked riots with its decision to raise the retirement age. The state old-age pension system, the Cnav, is in deficit, and responsibility for financing the deficit rests with Cades.

The government is requiring the FRR to pay €2.1bn a year to Cades to meet this obligation.

In other words, pension capital will now be used by perfectly rational third party managers to bid up sovereign bonds. Brilliant.

An asset manager said: “Clearly, the move creates new opportunities, because the French asset management market will be reshuffled because of the changes.

But it is also a step back because there are very few French capitalised pension schemes, and the experience around the FRR, the richness of the asset management and the opportunities it created will disappear in a few years.”

And elsewhere, in the UK, things in the pension arena are also starting to heat up as the country is preparing to launch an "auto enrolment" feature for workers, whereby up to 11 million will be eligible for automatic enrolment.

Trades Union Congress general secretary Brendan Barber hailed it as an “historic advance”: a minimum pension to go with the UK’s minimum wage. Pensions Minister Steve Webb confirmed last month that all employers would have to enrol staff into a company scheme. As a result, up to 11 million people will be eligible for automatic enrolment in a workplace scheme, with up to eight million of them saving for the first time. However, there is little evidence that employers are ready for it.

And judging by the Hungarian, Irish and French case studies, all monies auto deposited will soon find a new mandate: one of bidding up sovereing European bonds. More from Financial News:

Staff can opt out to avoid mandatory contributions that will eventually account for half of the minimum of 8% of salary, with employers contributing 3% of salary, and 1% coming from tax relief.

It is impossible to predict how many people might opt out, but Colin Tipping, head of institutional wholesale at asset manager BlackRock, points to an 80% take-up at US companies that have introduced auto-enrolment compared with less than half of that before the mechanism was introduced. The latest annual review of New Zealand’s national KiwiSaver scheme has an opt-out rate of 18%.

The European experience is less encouraging. Italy tried to boost private pensions saving in 2007 with reforms to the Trattamento di Fine Rapporto, a fund traditionally paid to workers on leaving an employer.

However, its policy of “silent consent”, which had the money transferred into a pension unless workers objected, saw only about a quarter participate. Tito Boeri, director of the country’s social policy reform group Fondazione Rodolfo Debenedetti, said: “It was a great opportunity to develop private pension schemes here, but to a large extent it failed.”

Our only question: how soon before the US administration takes this hint of what every proper socialist country does with funds apportioned to it by a gullible public and ends up investing trillions in the worst possible asset classes (while in Europe this obviously means sovereign bonds, in the US by and far the proceeds will be used to make further purchases of such equities as Apple, Amazon and Netflix, in whose continued successful ponziness lies the fate of a vast majority of US-based hedge funds, whose LPs may at some point, in the distant future, actually pay domestic income tax).

Whether you like it or not, most of you will be paying into some corrupt pension, keeping the London bankers in favour with their tailors.

More on your coming forced 4% pension contributions:

Link

Automatic enrolment into workplace pension schemes will only apply when a person earns more than £7,475 per year, a government review has concluded.

The earnings band, in line with the income tax threshold set to be introduced next April, is considerably higher than the previously proposed level of £5,035.

Every UK business, regardless of its size, should be made to offer a company pension scheme, the Department for Work and Pensions (DWP) also concludes.

It says employers should be given a 13-week grace period before staff are automatically enrolled, to ease the burden on companies employing large numbers of temporary workers.

The report concludes the change will see some ten million people automatically enrolled, and estimates anything between four and eight million will stay in the scheme.

The changes come into force in 2012.

Maggie Craig, the ABI's acting director general, says: "This is good news for millions of people.

"We are very pleased there will be no delay to the introduction of automatic enrolment into workplace pensions in 2012 and the setting up of NEST.

"We think it is right to raise the income threshold someone has to earn before being automatically enrolled, although we would have preferred a higher level of £10,000 to make sure more people clearly benefit from saving."

However, pensions minister Steve Webb has admitted hundreds of thousands of women would be excluded from NEST as a result of the threshold being raised.

He said a threshold of £7,000 would penalise 500,000 women, while some one million women would be affected if it was set at £8,000.

A threshold of £11,000 would exclude up to two million women, or just under 15% of all working women in the UK, he added.

It would be 'good' news if you got 100% control over where and with whom your money was being handled by.

Sorry, but that won't be the case.

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This is a big story. Your pension money is not safe, the whole idea is a nightmare ponzi scheme, before we even get to the fact that the govt. is taking your money saved for tomorrow to pay debts it owes today. Would you seriously entrust your wealth to a bunch of people who won't be in charge in 5 years, let alone perhaps even be alive by the time you come to claim your pension?

Edited by General Congreve

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This is a big story. Your pension money is not safe, the whole idea is a nightmare ponzi scheme, before we even get to the fact that the govt. is taking your money saved for tomorrow to pay debts it owes today. Would you seriously entrust your wealth to a bunch of people who won't be in charge in 5 years, let alone perhaps even be alive by the time you come to claim your pension?

Pensions are a big part of the puzzle as to why the financial meltdown happened. Instead of saving for yourself, pensions allow companies and organisations to invest it. Trouble is there is a who massive industry out there trying to find legitimate ways, and sometimes not so legitimate ways, of relieving you of your pension assets.

Mortgage backed securities were one way of them helping themselves to your cash.

Pensions savings should be ended now. Let individuals save for themselves if they want to. And no tax relief on pensions saving, that just helps the rich.

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This is a big story. Your pension money is not safe, the whole idea is a nightmare ponzi scheme, before we even get to the fact that the govt. is taking your money saved for tomorrow to pay debts it owes today. Would you seriously entrust your wealth to a bunch of people who won't be in charge in 5 years, let alone perhaps even be alive by the time you come to claim your pension?

The milking of the herd.

Glad i'm self employed, with no debt, and virtually no state pension expectations.

Im currently waiting on a £600 IR refund. :)

I went on strike last year, i just dint tell anybody.

PS Golds up :)

Edited by shindigger

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Pensions are a big part of the puzzle as to why the financial meltdown happened. Instead of saving for yourself, pensions allow companies and organisations to invest it. Trouble is there is a who massive industry out there trying to find legitimate ways, and sometimes not so legitimate ways, of relieving you of your pension assets.

Mortgage backed securities were one way of them helping themselves to your cash.

Pensions savings should be ended now. Let individuals save for themselves if they want to. And no tax relief on pensions saving, that just helps the rich.

Plus you get taxed on whatever (if anything) is shat out the other end.

Avoid.

"Good news" my ****.

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what a load of old tosh. France and Ireland are raiding NATIONAL funds, not individual ones. True that means less state pensions for people, so in that sense it is damaging, but individuals in those countries who have made provision for their own future should not be affected.

the auto-enrolment UK scheme is a good idea on the surface, providing they remove means testing from the uk state pension

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Plus you get taxed on whatever (if anything) is shat out the other end.

Avoid.

"Good news" my ****.

but you get taxed less because (1) you get 25% lump sum tax free and (2) as a pensioner you can live on less so takje a lower income and the taper-tax reliefs that implies

it is tax efficient in every way that counts

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Whether you like it or not, most of you will be paying into some corrupt pension, keeping the London bankers in favour with their tailors.

More on your coming forced 4% pension contributions

This is a big story. Your pension money is not safe

Well if you really don't like it, you can opt out.

You will keep being automatically enrolled, but you can keep opting out if you want to.

Just think carefully before you do, because you will potentially lose the tax relief and employer contributions.

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  • 312 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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