• It has come to our attention that some users may have been "banned" when they tried to change their passwords after the site was hacked due to a glitch in the old vBulletin software. This would have occurred around the end of February and does not apply after the site was converted to Xenforo. If you believe you were affected by this, please contact a staff member or use the Contact us link at the bottom of any forum page.

Private Pensions - capitalist con job


making waves

Well-known member
Joined
Mar 2, 2010
Messages
19,180
This board is regularly howling with right-wing hacks about the need to shift everyone in the country to private pension funds. However, they rarely deal with the cost of private pensions to the taxpayer in the form of tax releif which disproportionally benefit very high earners and never talk about the con job being perpetrated on workers who take out private pensions in the form of fees, kick-backs and underperforming pensions.

In August Professor Teresa Ghilarducci (Bernard and Irene Schwartz Chair of Economic Policy Analysis and the Director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research, New York) spoke at a pensions seminar co-hosted by TASC, TCD Pension Policy Research Group and the INTO. Her presentation showed that pension tax reliefs, as presently structured, result in a significant increase in inequality in the US - a similar situation applies in this country. among the criticisms made by Professor Ghilarducci were that:
• They are costly - because of the fees and charges of private providers.
• Tax reliefs have failed to increase pension coverage and they disproportionately benefit high earners -in Ireland 80 per cent of pension tax reliefs accrue to the top 20 per cent of earner; in the US, Ghilarducci contends that while pension tax reliefs in the USA are regressive, they are less regressive than in Ireland.
• They fail to provide an adequate income in retirement - as increasing the value of pension funds is largely dependent on the performance of the stock market and to a large degree, the gains in value are eroded by fees and charges, which is the case in both Ireland and the US.

Read more here - progressive-economy@tasc: US Lessons on the Failure of Pension Tax Arrangements

In 2009 the Irish taxpayer contributed €500million in tax relief on pension contributions of over €40,000. The overwhelming majority of tax breaks benefit high income groups. An ESRI study showed that 80% of the benefit of pension contributions goes to the top 20% of earners, while the Commission on Taxation found that these same earners benefitted by nearly €300 million a year in mortgage interest relief. A three to four year programme of phasing the number and cost of tax breaks down to EU levels would save an estimated €1.5 billion a year.

http://webcache.googleusercontent.com/search?q=cache:ib4f49PmYNUJ:www.cairde.ie/wp-content/uploads/2010/09/Tax-campaign-document-final.doc+pension+credits+benefit+high+earners&cd=2&hl=en&ct=clnk&gl=ie&client=firefox-a

Last Monday BBC Panorama's 'Who Took my Pension' exposed the con job of pension fees and commissions whereby pension providers deduct significant sums of money from pension contributions, insurance companies did likewise as did the fund managers - all working through a well-oiled machine of kick-backs. Furthermore, Panorama claimed that more than half the pensions were performing below indexation, yet the managers were still claiming significant fees and bonuses for these underperforming pensions. The programme denomstrated how pensions salespepole can earn up to £1million a year in commission on pensions being sold to unsuspecting workers. The pension fund managers use pension funds that workers contribute to gamble on the stock-market with many suffering huge losses. 50 years ago over 90% of stocks and shares were owned by private individuals, now over 60% of all shares are owned by workers pension funds.

The privatisation of pensions and the attacks currently underway against pensions of public sector workers mask the real crime being perpetrated on working class people. Workers are subsidising massive tax reliefs for wealthy individuals, massive fees and commissions for banks, insurance comanies and fund managers and are faced with the prospect of very small returns on their pension contributions.

It is now necessary to reverse the privatisation of pension provision. Tax reliefs for high earners should be abolished. Pension contributions should be controlled and managed by the State which provide a guaranteed income for workers on retirement. And we should let the fund managers gamble on the stock market with their own money.
 

seabhcan

Well-known member
Joined
Sep 3, 2007
Messages
14,327
Good post.

Slightly off topic but connected with your final comment about the growing weight of pension funds in the stock market - there is a great BBC documentary from the 90s about how pension funds led to the deindustrialisation of Britain. The documentary is called "the Mayfair Set".

Basically, it plots out how pension funds are, by law, required to seek out the greatest return on investment, regardless of the longer term impact on the business being invested in. The funds regularly buy in to outsourcing schemes which dismantle industries and put workers out of jobs. These workers are the same people who's pensions the funds manage. Workers are paying fund managers to put them out of work.
 

Cael

Well-known member
Joined
Jun 19, 2006
Messages
13,343
Privatisation is anti-social in all respects, and should be reversed. Citizens need to bring their production and services under democratic control - not leave them in the hands of psychotic spivs.
 

Dreaded_Estate

Well-known member
Joined
Sep 5, 2007
Messages
3,719
Privatisation is anti-social in all respects, and should be reversed. Citizens need to bring their production and services under democratic control - not leave them in the hands of psychotic spivs.
You keep saying that Cael but what does it actually mean?
 

Cael

Well-known member
Joined
Jun 19, 2006
Messages
13,343

Cael

Well-known member
Joined
Jun 19, 2006
Messages
13,343

Cael

Well-known member
Joined
Jun 19, 2006
Messages
13,343
Doesn't Anglo own it now?
I doubt it. But, I wouldnt call Anglo publically owned either - even though the tax payer has to pay for it. When you own something, you have some control over it. We have no control over Anglo. Rather, Anglo controls us.
 

SideysGhost

Well-known member
Joined
Nov 30, 2009
Messages
17,716
My first few years out of college were spent in the insurance industry. And yeah, it's blatantly obvious that the pension industry is from start to finish an utter scam.

Save yer own money and invest in a balanced portfolio on your own account - 9 times out of 10 if you aren't an eejit chasing the next get rich quick scheme you can consistently turn in without much effort somewhere in the 3-5% p.a. range. Add that up with the joys of compound interest over 30 years and you'll realise there's absolutely no need for these restrictive badly-performing "pension" funds. Yeah, it is just another scam to get ordinary working people to hand over all their money to feckin morons in suits who think they are amazing.

I keep trying to tell people - if it smells like a scam it's a fecking scam. If nobody can explain it to you in a way that makes sense straight away, chances are it's a feckin scam. If it involves trying to pull your strings and push your buttons - yeah it's almost certainly a scam. And if some washed-up old celebrities are doing the ads - feckin scam.

What exactly is wrong with most people that they seem incapable of spotting the obvious scam???
 

evercloserunion

Well-known member
Joined
Dec 10, 2006
Messages
819
My first few years out of college were spent in the insurance industry. And yeah, it's blatantly obvious that the pension industry is from start to finish an utter scam.

Save yer own money and invest in a balanced portfolio on your own account - 9 times out of 10 if you aren't an eejit chasing the next get rich quick scheme you can consistently turn in without much effort somewhere in the 3-5% p.a. range. Add that up with the joys of compound interest over 30 years and you'll realise there's absolutely no need for these restrictive badly-performing "pension" funds. Yeah, it is just another scam to get ordinary working people to hand over all their money to feckin morons in suits who think they are amazing.

I keep trying to tell people - if it smells like a scam it's a fecking scam. If nobody can explain it to you in a way that makes sense straight away, chances are it's a feckin scam. If it involves trying to pull your strings and push your buttons - yeah it's almost certainly a scam. And if some washed-up old celebrities are doing the ads - feckin scam.

What exactly is wrong with most people that they seem incapable of spotting the obvious scam???
Would you still get tax relief on your investments though? Tax relief is why pension funds exist.
 

Right is right

Active member
Joined
Oct 4, 2008
Messages
262
This board is regularly howling with right-wing hacks about the need to shift everyone in the country to private pension funds. However, they rarely deal with the cost of private pensions to the taxpayer in the form of tax releif which disproportionally benefit very high earners and never talk about the con job being perpetrated on workers who take out private pensions in the form of fees, kick-backs and underperforming pensions.

In August Professor Teresa Ghilarducci (Bernard and Irene Schwartz Chair of Economic Policy Analysis and the Director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research, New York) spoke at a pensions seminar co-hosted by TASC, TCD Pension Policy Research Group and the INTO. Her presentation showed that pension tax reliefs, as presently structured, result in a significant increase in inequality in the US - a similar situation applies in this country. among the criticisms made by Professor Ghilarducci were that:
• They are costly - because of the fees and charges of private providers.
• Tax reliefs have failed to increase pension coverage and they disproportionately benefit high earners -in Ireland 80 per cent of pension tax reliefs accrue to the top 20 per cent of earner; in the US, Ghilarducci contends that while pension tax reliefs in the USA are regressive, they are less regressive than in Ireland.
• They fail to provide an adequate income in retirement - as increasing the value of pension funds is largely dependent on the performance of the stock market and to a large degree, the gains in value are eroded by fees and charges, which is the case in both Ireland and the US.

Read more here - progressive-economy@tasc: US Lessons on the Failure of Pension Tax Arrangements

In 2009 the Irish taxpayer contributed €500million in tax relief on pension contributions of over €40,000. The overwhelming majority of tax breaks benefit high income groups. An ESRI study showed that 80% of the benefit of pension contributions goes to the top 20% of earners, while the Commission on Taxation found that these same earners benefitted by nearly €300 million a year in mortgage interest relief. A three to four year programme of phasing the number and cost of tax breaks down to EU levels would save an estimated €1.5 billion a year.

Tax Reform for a Better more Equal Ireland

Last Monday BBC Panorama's 'Who Took my Pension' exposed the con job of pension fees and commissions whereby pension providers deduct significant sums of money from pension contributions, insurance companies did likewise as did the fund managers - all working through a well-oiled machine of kick-backs. Furthermore, Panorama claimed that more than half the pensions were performing below indexation, yet the managers were still claiming significant fees and bonuses for these underperforming pensions. The programme denomstrated how pensions salespepole can earn up to £1million a year in commission on pensions being sold to unsuspecting workers. The pension fund managers use pension funds that workers contribute to gamble on the stock-market with many suffering huge losses. 50 years ago over 90% of stocks and shares were owned by private individuals, now over 60% of all shares are owned by workers pension funds.

The privatisation of pensions and the attacks currently underway against pensions of public sector workers mask the real crime being perpetrated on working class people. Workers are subsidising massive tax reliefs for wealthy individuals, massive fees and commissions for banks, insurance comanies and fund managers and are faced with the prospect of very small returns on their pension contributions.

It is now necessary to reverse the privatisation of pension provision. Tax reliefs for high earners should be abolished. Pension contributions should be controlled and managed by the State which provide a guaranteed income for workers on retirement. And we should let the fund managers gamble on the stock market with their own money.
Shock horror top taxpayers get most benefit of tax reliefs.....Considering that they pay most if not nearly all the tax in this country that is to be expected especially with nearly half the workforce not paying.
 

Baddaddy

Well-known member
Joined
Oct 3, 2010
Messages
548
Whilst I agree with most of what was posted, I am uncomfortable with 2 aspects....

1. Trusting a government to run a scheme, todays government might find hard running a piggy bank...

2. Fairness, because if someone say earns €50,000 and puts aside 10%, and another on €25,000 does likewise, is there a suggestion that both end up with the same pension on retirement?

If so thats unequitable
 

cry freedom

Well-known member
Joined
Nov 8, 2009
Messages
2,400
How about a return to Mutuals?
The first insurance scheme was set up in th 17th century by Scottish Presbyterians.
It filled a great need and was run for the benefit of its subscribers.
Nowadays with takeovers and mergers and buy outs this altruism has all but disappeared.
Highly paid suits in ivory towers are involved in a silly game of dick measuring
as they vie with each other for ownership of the latest Gulfstream corporate jet and the size of their office and salary.
A return to Mutuals anybody?
 

RainyDay

Well-known member
Joined
Aug 14, 2003
Messages
2,552
Shock horror top taxpayers get most benefit of tax reliefs.....Considering that they pay most if not nearly all the tax in this country that is to be expected especially with nearly half the workforce not paying.
Just wondering if you've ever heard of VAT (which brings in more than income tax, btw).
 

TonyB

Well-known member
Joined
Sep 29, 2009
Messages
802
Twitter
technopolitics
Privatisation is anti-social in all respects, and should be reversed. Citizens need to bring their production and services under democratic control - not leave them in the hands of psychotic spivs.
The proletariat must control the means of production, eh? The argument may have had merit in the early twentieth century when nation states were bound by land borders and the interdependence levels were minimal and technology was far less advanced. Simply put, it is impossible now. In order for efficient competitive services to be delivered, they must be exposed to the market. Otherwise you get North Korea - isolation and famine. That's just the economics. Closed market protectionism would isolate Ireland internationally, preclude our involvement in the EU and the Euro, hike import prices and decimate the private sector, in turn converting the state into one great Orwellian employment machine where people get paid in a combination of a non-internationally exchangeable pittance in currency, and food stamps. The psychotic spivs would then simply be relocated to Leinster House.
 

cry freedom

Well-known member
Joined
Nov 8, 2009
Messages
2,400
The proletariat must control the means of production, eh? The argument may have had merit in the early twentieth century when nation states were bound by land borders and the interdependence levels were minimal and technology was far less advanced. Simply put, it is impossible now. In order for efficient competitive services to be delivered, they must be exposed to the market. Otherwise you get North Korea - isolation and famine. That's just the economics. Closed market protectionism would isolate Ireland internationally, preclude our involvement in the EU and the Euro, hike import prices and decimate the private sector, in turn converting the state into one great Orwellian employment machine where people get paid in a combination of a non-internationally exchangeable pittance in currency, and food stamps. The psychotic spivs would then simply be relocated to Leinster House.
Well said!
 

cricket

Well-known member
Joined
Nov 7, 2009
Messages
14,029
As a first , modest step , wouldn't it be a good idea to limit all tax relief on pensions to those contributions of less than €20,000 per annum , at lower income tax rates , in the next budget ?
 

He3

Moderator
Joined
Oct 1, 2008
Messages
17,094
Have you noticed what the government is doing with the national pension reserve fund?

Looks like another con job there.

Where does that leave people?
 

hmmm

Well-known member
Joined
Oct 4, 2006
Messages
2,834
As a first , modest step , wouldn't it be a good idea to limit all tax relief on pensions to those contributions of less than €20,000 per annum , at lower income tax rates , in the next budget ?
Double taxation on private pension holders? Is it only the public sector who will ever be able to afford to have a pension? And what will we say when this causes a collapse in the numbers of people who will save for pensions - is this good for society?

I support a cap on pension contributions. Allowing top up pensions of millions of euro is a disgrace. We should be encouraging people to invest relatively modest amounts from an early age.

One thing that frustrates me about a lot of the "private pensions are a con job" crowd is that they couldn't be bothered getting the changes made that will solve their problem. If your pension provider shuffles you into expensive pensions then move your pension to a cheaper index tracking fund. If your company forces you to invest in expensive pensions then get your trustees to offer you a cheaper alternative. Proclaiming that "all private pensions are a con job" because you are getting charged high fees is deeply unfair on those of us who have taken control of our own pensions and are saving for our future.
 
Top