Readers of this Forum will note that there have been several posts of late about how privatizing certain government services is a disaster. We publicize this because only public opinion will stop Conservatives from their goal of outsourcing to private firms all of the functions of government. Social Security is a good example. For over 70 years they have hated Social Security and its success and everyday they fight to see the system changed to private accounts.
One thing private accounts would mean is private investment managers. What might that look like? Well in
looks pretty ugly.
Nine in 10 of the country’s biggest pension fund managers fail to warn people about the levies, which typically wipe more than £100,000 from the value of a middle-class worker’s pension.
The report by the RSA, a think tank, found that workers were routinely denied simple, low-cost pensions that are readily available elsewhere in
See right now SS is managed by the government. And the SS fund is invested in
U. S. government securities, the safest and best
investment in the world, which is why interest rates on U. S. bonds are at historical
lows. That doesn’t take any private management. But private accounts will have to be managed
by private, profit making Wall Street firms.
And those firms will charge fees, and if the experience in Britain is a
guide, those fees will be huge.
The report said pension charges accounted for up to 40 per cent of typical retirement savings.
Several international pension funds offer cheaper, more transparent deals elsewhere in
Europe while charging British customers more. The average
Dutch person can expect a pension worth 50 per cent more than their British
equivalent because the country has far simpler charges.
The Daily Telegraph previously disclosed that an investor putting £50,000 into a fund providing typical returns over 25 years would lose £108,000 because of unnecessary charges.
So, anybody wondering why Wall Street firms are supporting Republicans? Anybody?