Britain's 25 year pension reform experiment BOMBED

[ailsagirl]

Privatization Bombed in Britain
Now they’re looking for a way out

By Norma Cohen
February 2005

The president’s bold new plan to partly privatize Social Security, which has many on Wall Street salivating, is not new at all. In fact, it looks remarkably similar to Britain’s 25-year experiment with pension reform, which included substituting private investment accounts for a portion of government pension benefits. It is an experiment now regarded as a dismal failure.

In short, the British public—and government—lost money. They learned the hard way that the costs of administering private accounts can affect returns and reduce the size of a retirement pot by up to 30 percent.

Unusual for Britain, there is now an emerging consensus among labor and business, liberals and conservatives, that the government pension system—the United Kingdom’s counterpart to Social Security—needs serious reform. Recommendations for an overhaul are expected after the elections in May.

One reason for the intense attention is that the U.K.’s traditionally generous system of employer-sponsored pensions is collapsing, exposing the weakness of the government pension system just as more retirees are being forced to rely on it.

So while the United States is looking at privatization, British experts are eyeing the more generous and simpler U.S. Social Security system.

http://www.aarp.org/bulletin/socialsec/ss_britain.html

[babylonsister]

1. Thanks for this, because I heard

McCain on FAUX recently/tonight referring to how well this reform has worked In Great Britain. He's not a DINO, or a RINO, in my opinion he's sucking up to anyone who might vote for him. So I will never...

[ailsagirl]

2. You're kidding!!! Well, the Brits are looking for a way out!!!

McCain is a liar. Plain and simple.

[babylonsister]

4. No, McCain was using the Brits as

an example of how great it is/has been/will be. Such crap.
This a.m. I heard, perhaps on Imus, that McCain is the leader in everybody's hearts (polls for '08). Not mine! I used to like him til he started sucking repug %$#^&**. He's gross in my view.

[Warpy]

3. Chile got out of it dirt cheap, with service charges eating up

only 15% of the accounts. Somehow, I think Bush's scam will be closer to the UK scam, possibly exceeding it.

Even at the more "reasonable" 15%, people who invested in the Chilean plan found they had a lot less left over to retire on than they'd been promised when Pinochet started the whole thing. Most are still working, living on charity or an additional dole, or have found relatives to take them in.

Maintaining the paperwork on millions of small accounts is fiendishly expensive, especially when the job is turned over to Wall Street.

Contrast it with the 0.8% in administrative overhead that Social Security costs.

We can't afford the Bush scam. Not now, not ever.