ACTIVE VS. PASSIVE DECISIONS AND CROWD-OUT IN RETIREMENT SAVINGS ACCOUNTS: EVIDENCE FROM DENMARK Post author By Philip Lane Post date January 14, 2013 here. Categories In Uncategorized 6 Comments on ACTIVE VS. PASSIVE DECISIONS AND CROWD-OUT IN RETIREMENT SAVINGS ACCOUNTS: EVIDENCE FROM DENMARK ← America, Britain and Europe → Dublin Review of Books 6 replies on “ACTIVE VS. PASSIVE DECISIONS AND CROWD-OUT IN RETIREMENT SAVINGS ACCOUNTS: EVIDENCE FROM DENMARK” I’m afraid that all of this stuff about the benefits of opt-out in pensions, rather than incentivised opt-in, brings out the cynic in me. At a time when the Government is desperately trying to boost consumer spending, and equivalently cut net saving, it seems contradictory that it would take effective measures to increase the flow of funds into the pensions system. As the proposition seems to be that pension savings would be managed by the NTMA, I am drawn to the suspicion that the whole thing is a three card trick designed to bring a large volume of additional funds under Government control. Once under Government control they can be used directly for off-balance-sheet investment in infrastructure projects, and indirectly for debt service and current spending through the purchase of risky Irish government debt or through structuring eventual pension obligations as current spending. @ Bee Agree, especially too given the precedent raid on private sector pension funds. Very difficult not to be cynical about it. If brought in, it will be very interesting too to see the % opt outs or whether the Irish will be as complacent as ever about this kind of thing….. This piece on the Hungarian pensions stitch-up makes an interesting read. http://www.efinancialnews.com/story/2011-02-17/moodys-hungary-pensions The goode olde days of pensions accruing positively on an annual basis are gone. The thieves (sorry, managers) who now control the cash flows into so-called ‘pension savings’ funds immediately subtract a significant commission and this has to be made good by the investment return. This is no longer possible and there is now the added hazards of outright fraud in the representations literature and the real possibility of significant capital loss. It is the duty and responsibility of a state (aka: the government of the day) to protect its citizens – not just from armed attack on their persons and property but against institutional fraud and theft. They (in respect of the latter) have chalked up the most egregious, heroic, successful – and continuing, failure. This proposal is an outright scam of asset sequestration. It may well succeed because of a campaign of positive dis-information (most folk are financially a tad thick and easily spooked by scary propaganda – TINA!) and the non-opposition of those few who do fully understand what is going on but are dismissed as ‘kranks’ and ‘doomers’. @ BW Snr This asset sequestration is, it seems, to be aimed at the private sector only of course. http://www.ft.com/cms/s/0/78a22320-d892-11df-8e05-00144feabdc0.html Jeremy Siegel, professor of economics at the Wharton School in Philadelphia, produced a model, in his The Future for Investors, that suggested that westerners’ comfort in retirement was almost wholly dependent on productivity growth in the developing world. If the developing world keeps raising productivity at 6 per cent per year, then the US could meet the needs of its ageing population while barely raising the retirement age from 62. If, however, developing world productivity growth stalls completely, then the US retirement age by 2050 will have to rise to 77. Comments are closed.