Confiscating Your Super

Carrying on from yesterday’s article, a little over a year ago we wrote about the dangers inherent in being in the big industry and managed money super funds (it’s worth revisiting before reading on).  As touched on in that article there is in fact a history of Government’s confiscating or raiding super funds, almost without exception at times when the Government desperately needed the money due to their own fiscal mismanagement and all around the time of, or immediately after, a financial crisis.  Depending on your view, many believe that is what is coming on the next and unprecedented financial crisis.  Here is a list of these instances:

October 2008 – Argentina

The Government seized $30b in private pension funds, placing it into their government social security system.  Dressed up as protection for its people it also just happened to address a $12b bond payment shortfall issue the government had…

December 2010 – Portugal

The government moved $2.5b of pension fund assets of the largest Telco into their own social security system.  The fund also had to make up for balance sheet shortfalls for 2 years afterward as well and those funds were used to reduce the government’s deficit…

December 2010 – Hungary

Citizens were forced to transfer the private component (1/3) of their pension fund into the government component of the joint $14.2b fund or face losing their government component benefits.  The state used the funds to pay state pensions and reduce debt…

December 2010 – Bolivia

The government simply nationalised the 2 largest private pension funds worth $3b.

May 2011 – Ireland

The government unilaterally garnished 2.4% or $2.6b of private pensions over 4 years to fund a spending promise.  The ‘tax’ was not applied to state pensions, only private…

December 2011 – Portugal

The government moved the assets of their 4 biggest banks, the assets of which were largely private pension funds, onto their own balance sheet.  They used the $7.7b seized to meet the EU/IMF bailout requirements for deficit:GDP ratio.

September 2013 – Poland

The government confiscated around half of the assets of private pension funds, held as bonds, with the balance to be transferred over 10 years.  Held then in the government’s state pension system it also reduced their debt to GDP and allowed them to borrow more…

March 2015 - Greece

The government passed a bill that allowed all pension funds kept in the Bank of Greece to be fully invested in Greek sovereign bonds (you know, the same Greek bonds that the PM and Treasurer both admitted were “unsustainable” and “will never be repaid”….)

SMSF’s in Australia would be nigh on impossible to ‘nationalise’, roll into a state controlled fund, etc etc.  An SMSF allows you to get out of these big super (private pension) funds and start protecting your future.  Learn more here, call us or visit our store to discuss.