January 20, 2013

Portugal Is Latest Country To Go “MF Global”, Raid Pensions Funds To Delay Fiscal Death

About a year ago, we discussed the very troubling moves by insolvent countries such as Ireland and Hungary to “raid” their pensions funds for various fungible purposes, a move which in virtually every way a was a progenitor to the MF Global capital commingling, if not outright bankruptcy, and was explained as reflecting ” 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.”

While it was unclear precisely what the use of funds was, back then FN speculated that it pension funds were being tapped to boost sovereign debt bids. Which if true means that Europe’s peripheral pensioners have seen about a 20% drop in the NPV of their retirement assets. Today we add Portugal to the list of countries committing an MF Global type crime on a global scale: the Telegraph writes: “Portugal has raided €5.6bn (£4.8bn) of pension fund assets in a controversial scramble to meet its deficit targets.” And since the money is once again implicitly and explicitly used to patch broken fiscal models, it is as good as gone.

Which in a paradoxical way is almost welcome, as the true Arab Spring will not come to Europe (and America) until the citizens don’t read, in clear writing, that their welfare state entitlement benefits are gone…. They are all gone. And at that point there will be truly nothing left to lose.

From Telegraph:

The cabinet agreed to transfer the assets from four of Portugal’s biggest banks to the state balance sheet.

The assets will be used to bridge a gap needed to meet the fiscal deficit target of 5.9pc of GDP set by the terms of the country’s €78bn bail-out from around 10pc in 2010.

“This measure is more than sufficient to meet the budget deficit goal in 2011,” said Helder Rosalino, secretary of state for central administration, on Friday.

Portugal said it had informed the EU and IMF and assured them it would be a “one-off”. However the 2010 budget was met by shifting three pension plans from Portugal Telecom on to the public social security system. The liabilities don’t count, yet.

There have been no complaints from Eurostat but Raoul Ruperal from Open Europe said: “This can’t be seen as a future revenue stream in any way.”

We wonder if “one-off” in this case is the same “one-off” that was supposed to happen when the Fed bailed out the world’s banks in a “one-off” event… over and over and over.

 

Source: http://www.zerohedge.com/news/portugal-latest-country-go-mf-global-raids-pensions-funds-delay-fiscal-death

Corporate Wolf Eats Grandmother Alive

“Retirement Heist: How Companies Plunder and Profit From the Nest Eggs of American Workers”
A book by Ellen E. Schultz

Hey, Occupy Wall Street. Here’s a book to rally around. Looking for a study of the wealth disparity that’s sent you to the streets? Ellen E. Schultz offers a guide. “Retirement Heist” is a concise and alarming look at how—in the span of a generation—the 1 percent has looted the futures of the 99 percent.

Schultz wields expertise from years of investigative reporting on the retirement crisis for The Wall Street Journal. Time was, she writes, when pension funds had “such massive surpluses that the companies could have fully paid their current and future retirees’ pensions, even if all of them lived to be ninety-nine and the companies never contributed another dime.”

With slick accounting tricks, Schultz writes, corporate America has funneled billions of dollars out of pension funds. Many companies used the money to pay for downsizing—covering early-retirement buyouts, which are considered voluntary, instead of imposing a layoff and cash severance. Some funds were simply terminated, and the money was used to offset operating expenses. And so, company by company, a great surplus dwindled.

To replenish the pension funds, companies cut benefits, Schultz writes. Their gains were immediate: Earnings got a boost. The companies’ obligations were cut. Their bottom lines were bolstered. It took much longer for workers’ losses to register: In many of the cases Schultz cites, workers realized the damage only once they were old and sick and had little in the way of resources to embark on a protracted legal battle.

It’s utterly depressing, and that’s just the start. Having plundered the pensions, companies exploited 401(k) plans to borrow money cheaply. With pensions underfunded or frozen, they dug into retiree health plans. The trend of tying executive pay to performance only made matters worse, Schultz explains, leading, for instance, to the death-benefit bamboozle, whereby companies take out life insurance policies on their employees. When a worker dies, even if he’s long since found other work or retired, the company cashes in on the death benefit, tax-free. In many of these cases, the payout to the company dwarfs whatever benefit might go to the next of kin.

Schultz provides an anatomy of every abomination and shows how it unfolded in individual lives. The aggrieved were engineers and miners, pro football players and pilots. Distressingly, they appeared powerless to stop this bilking or defend themselves against it. If the retirement industry isn’t reined in, she concludes, we’ll be right back where we were in the 1930s, and “society—and taxpayers—will be paying for services to support the millions of elderly, formerly middle-class Americans.”

Source: http://www.truthdig.com/arts_culture/item/corporate_wolf_eats_grandmother_alive_20111201

UK: 30th November Strike. Let The Workers Of The World Rise!

Strikers Show The Tories Who’s Boss: 2 Million Out To Save Their Pensions

Tory attempts to belittle public-sector industrial action rang pathetically hollow today as millions of workers joined the fight against government-imposed pension cuts.

Services across England, Scotland and Wales ground to a halt in the strongest show of union strength in a generation.

Schools, courts, museums and job centres were paralysed in the 24-hour strike which also brought extensive disruption to transport, hospitals and government departments.

In Scotland over 300,000 workers took to the streets while in Wales an estimated 170,000 walked out in opposition to the brutal cuts.

Rallies up and down England drew tens of thousands - and received the overwhelming support of the public.

Speaking at a rally in Birmingham TUC general secretary Brendan Barber said: “On this unprecedented day when 30 unions have members taking action together we are sending a crystal-clear message to the government.

“That we are strong, that we are united, and that our campaign will go on until we secure justice and fairness for every public servant.”

PCS general secretary Mark Serwotka said: “The government is carrying out a massive raid on pensions which is a reflection of its unrelenting mismanagement of the economy.

“Suffering and misery are a price the government wants us to pay - this is an all-out attack on public services.”

Source: http://www.morningstaronline.co.uk/news/content/view/full/112590

Two Million Strike in UK!!

http://www.youtube.com/watch?v=jDVItFJdfFQ&feature=youtu.be

 

 

Strikes Over Public Sector Pensions Hit Services Across Uk As 2 Million Walk Out

BIGGEST OUTBREAK OF INDUSTRIAL UNREST IN THREE DECADES

Trade unions and the government have traded blows over the impact of the biggest outbreak of industrial unrest in three decades, as up to 2 million public sector workers went on strike, forcing the closure of 60% of schools in England and the cancellation of 6,000 hospital operations.

David Cameron and Ed Miliband trade blows as 60% of schools in England are closed and 6,000 NHS operations cancelled.

Trade unions and the government have traded blows over the impact of the biggest outbreak of industrial unrest in three decades, as up to 2 million public sector workers went on strike, forcing the closure of 60% of schools in England and the cancellation of 6,000 hospital operations.

Heathrow airport reported minimal disruption as the mass rebooking of passengers helped reduce queues at border control, but the cabinet secretary, Francis Maude, acknowledged that the strikes over pension reforms had disrupted services. The impact includes:

• 19,000 out of 21,700 schools in England and Wales closed or partially closed.

• 6,000 out of 30,000 non-urgent operations cancelled.

• 135,000 civil servants on strike, representing just over a quarter of the civil service.

With the strike only halfway through, the prime minister and Labour leader battled to make political capital out of the unrest. At prime minister’s questions in the House of Commons, David Cameron claimed that the strikes had failed to have a significant impact.

“At our borders the early signs are that the contingency measures are minimising the impact, we have full cover in terms of ambulance services, and only 18 of the 900 job centres are closed,” he said. “So despite the disappointment of the party opposite, who support irresponsible and damaging strikes, it looks like something of a damp squib.”

Ed Miliband said the government must accept blame for the strikes. He asked Cameron: “Why do you think so many decent, hard-working public sector workers, many of whom have never been on strike before, feel the government simply isn’t listening?”

Maude said the strikes were irresponsible as he disputed union claims that talks over pension reforms had ground to a halt. One of the main union negotiators, however, the GMB’s Brian Hutton, said discussions on the four pension schemes – health, education, civil service and local government – had either stalled or were insubstantive. “In most of the schemes there is really nothing going on at all,” he said.

A spokesman for the TUC, which is co-ordinating the strikes, said up to 2 million workers had taken part in the biggest bout of industrial action since the 1979 winter of discontent.

“There has been magnificent support for the strike today. It is the biggest in a generation.”

Referring to government claims of a low turnout and deliberate disruption of negotiations, the spokesman added: “The government is clutching at straws. The real question remains, how did this government provoke so many ordinary, decent people to go on strike for the first time in their lives?”

Mark Serwotka, the leader of the Public and Commercial Services (PCS), said reports from picket lines showed a huge turnout, with up to 90% of staff in some government departments, including Revenue and Customs, taking action. “I have been to pickets around central London and spirits are sky-high, with many other unions besides PCS out on strike,” he said.”

Britain’s largest airport, Heathrow, reported no disruption as the busiest time of day for passport control and international arrivals at 7am passed without incident. Some 60,000 passengers normally pass through border control at Heathrow on a normal day, but major airlines including British Airways and Virgin Atlantic indicated that thousands of travellers had rebooked to an alternative date free of charge.

“Due to the effective contingency plans we have put in place with the airlines and the UK Border Agency over recent days, immigration queues are currently at normal levels,” said the airport’s operator, BAA. British Airways, Heathrow’s largest customer, said passenger numbers were reduced compared with an average day while Virgin Atlantic said it was operating at 50% capacity.

The Department for Education said 58% of England’s 21,700 state schools were closed, with 13% partly shut. In Scotland it was thought just 30 of the 2,700 council run schools remained open. In Wales around 80% were believed shut and in Northern Ireland more than 50% of 1,200 schools were closed.

NHS managers estimated that some 6,000 out of 30,000 routine operations had been cancelled across the UK, as well as tens of thousands of appointments. The health secretary, Andrew Lansley, said patients who had operations cancelled would still be seen within an 18-week limit.

London Ambulance Service told BBC London it was struggling and people not in a life-threatening condition might not get an ambulance.

The strike saw walkouts by tens of thousands of border agency staff, probation officers, radiographers, librarians, job centre staff, court staff, social workers, refuse collectors, midwives, road sweepers, cleaners, school meals staff, paramedics, tax inspectors, customs officers, passport office staff, police civilian staff, driving test examiners, patent officers and health and safety inspectors.

In Wales unions reported around 170,000 workers on strike, and in Scotland around 300,000.

Up to 1,000 marches and rallies were due to take place across the UK. Four arrests were made ahead of a national rally in London, two for assaulting an officer and two for possession of a weapon.

Unite general secretary Len McCluskey, who was due to address the London rally later, said 30 November would go down as the day when the union movement and workers fought to protect the economic and welfare advances of the last 60 years. Working people were “being asked to pay for the economic mess caused by the greedy City elite whose behaviour this spineless government has repeatedly failed to tackle”, he said.

Touring picket lines in London, he added: “The action today has been a brilliant display of courage and concern by public servants who are being demonised by a government that has lost its moral compass.”

In Salford, Greater Manchester, around 20 council refuse collectors were gathered around a brazier waving placards, one of which read: “Do we look Gold Plated?”. Unite organiser Neil Clarke said: “I don’t think George Osborne could find Salford if you gave him a map.”

Outside Edinburgh’s Royal Infirmary nurses, lab workers and cleaners were joined by the veteran trade union leader Rodney Bickerstaff, a pivotal figure in the 1970s.

“These are people who work day in, day out. They wipe noses, they wipe bottoms, they teach unruly kids, work with dustbins and sewage works. They are services which civilise our society,” he said.

In Liverpool Inspector Russ Aitken from Mersey Tunnel police was taking industrial action for the first time in 35 years. “I feel angry that I’m paying a 50% increase in pension contributions and I feel angry that I’m going to have to work longer and at the end of it get less.”

Outside the Crown Prosecution Service office in Manchester city centre, a handful of lawyers were among those manning the picket line. The average annual pay of a CPS solicitor was £30,000 rising to £50,000, said strikers, but many low pay grade civil servants would get average annual pensions of £5,600 after 40 years service.

Courts across the UK were affected, said Norina O’Hare, who represents the justice and prosecutions sector of the PCS. “We’ve had a lot of support from judges who are, of course, also public sector workers.”

Source: http://www.guardian.co.uk/society/2011/nov/30/strikes-public-sector-pensions-impact

Day Of Strikes As Millions Heed Unions’ Call To Fight Pension Cuts

The UK is experiencing the worst disruption to services in decades as more than 2 million public sector workers stage a nationwide strike, closing schools and bringing councils and hospitals to a virtual standstill.

• Disruption across UK as many services come to virtual halt
• Airports, schools, rail services and hospitals affected
• Reform of public sector pensions is at heart of dispute

The strike by more than 30 unions over cuts to public sector pensions started at midnight, leading to the closure of most state schools; cancellation of refuse collections; rail service and tunnel closures; the postponement of thousands of non-emergency hospital operations; and possible delays at airports and ferry terminals.

The TUC said it was the biggest stoppage in more than 30 years and was comparable to the last mass strike by 1.5 million workers in 1979. Hundreds of marches and rallies are due to take place in cities and towns across the country.

Pickets began to form before dawn at many hospitals, Whitehall departments, ports and colleges.

The strikes have been called over government plans to overhaul pensions for all public sector workers, by cutting employer contributions, increasing personal contributions and, it emerged on Tuesday, increasing the state retirement age to 67 in 2026, eight years earlier than originally planned.

Union leaders were further enraged after George Osborne announced that as well as a public sector pay freeze for most until 2013, public sector workers’ pay rises would be capped at 1% for the two years after that.

In Scotland an estimated 300,000 public sector workers are expected to strike, with every school due to be affected after Scottish headteachers voted to stop work for the first time.

The UK Border Agency is braced for severe queues at major airports after learning that staffing levels at passport desks will be “severely below” 50% despite a successful appeal for security-cleared civil servants to volunteer.

“We will have the bare minimum to run a bare minimum service,” said a Whitehall insider. Many major public buildings and sites, including every port, most colleges, libraries, the Scottish parliament, major accident and emergency hospitals, ports and the Metro urban light railway around Newcastle and Sunderland will be picketed.

At Holyrood, Scottish government ministers and MSPs in the ruling SNP, the Liberal Democrats and Tories are expected to cross picket lines to stage a debate on public pensions; Labour and Scottish Green party MSPs will join the protesters.

Here are some of the actions across the country:

In London up to 2,000 schools will be shut or affected, and ambulance crews will strike, there will be pickets in Whitehall, at universities, hospitals and a TUC regional march through the city from Lincoln’s Inn Fields to the embankment.

• In Scotland union leaders including Rodney Bickerstaff, general secretary of Unison, will march through central Edinburgh to a mass rally outside the Scottish parliament, with protests at Edinburgh castle, a major march and rally attended by Scottish union leaders in Glasgow, where civil servants will picket MoD and tax offices. There will be marches and protests in Dundee, Inverness and Aberdeen.

• In southern and south-west England and Wales unions will hold marches and rallies in towns and cities including Brighton, Southampton, Bristol and Exeter, while a New Orleans-style marching band will lead a march through Cardiff.

• In the north-west up to 25 Cumbrian schools may open, the Mersey tunnel is expected to be closed, while in Liverpool protesters will be urged to sound car horns, blow vuvuzela horns, clap and shout at 1pm in an action dubbed “One Noise at One”.

• In the Midlands union general secretaries including the TUC leader Brendam Barber and Dave Prentis of Unison will lead a rally at the Birmingham Indoor Arena, while marches will be held in Nottingham.

• In the north-east of England, Metro services will be severely hit and the RMT rail union leader Bob Crow will address a rally.

• In northern England marches are due to be staged in Manchester, Bradford, Leeds and Sheffield.

• In Northern Ireland there will be no train or public bus services, Belfast’s passport office will be closed along with leisure centres and schools. The main march will be through central Belfast.

The TUC said the strike would also include tens of thousands of border agency staff, probation officers, radiographers, librarians, job centre staff, courts staff, social workers, refuse collectors, midwives, road sweepers, cleaners, school meals staff, paramedics, tax inspectors, customs officers, passport office staff, police civilian staff, driving test examiners, patent officers, and health and safety inspectors.

Unions and employers have struck local deals to avoid disruption to emergency operations and essential medical services at hospitals, mental health units and residential care units for children. Emergency rotas have been introduced by mental health social workers with union agreement.

The Prospect union has exempted staff from strike action who work in 100 essential defence posts, including intelligence analyst posts at British bases in Afghanistan and civil servants supplying frontline troops.

Steve Jary, the national secretary of Prospect, which represents thousands of MoD staff, said: “These people are not the Whitehall bureaucrats of popular imagination. It is ironic that this important work by staff who risk their own lives in supporting the UK’s armed forces only comes to light in a situation like the industrial action.”

Dean Royles, the director of the NHS Employers organisation, which represents NHS trusts in England and Wales, said the unions had agreed to protect emergency services but he warned patients they might still experience significant delays that could spill over into Thursday.

“The absolute priority of everyone in the NHS must be to ensure that patients are safe and we avoid unnecessary distress too patients,” he said. “We believe robust plans will be in place for the people who need urgent care but those needing non-urgent care may experiences delays.”

The Local Government Association, which represents English and Welsh councils, said it was “working tirelessly” to minimise disruption to essential services, and to protect services for the elderly, vulnerable and young. Social workers were operating emergency rotas, children’s residential centres were being staffed as fully as possible and service updates would be posted on council websites.

Source: http://www.guardian.co.uk/society/2011/nov/30/public-sector-workers-strike-uk