Ecuador Socializes Private Pension Funds

Ecuador Socializes Private Pension Funds | ecuador-flag-457x300 | Sleuth Journal

Workers will be obligated to surrender their life savings to the government.

Teachers and other unionized workers have had to provide the Bank of the Ecuadorian Institute of Social Security (Biess) savings they have accumulated on their own to improve their lousy public pensions.

The teachers’ pension fund is the most significant, with $405 million saved in 23 years by 126,000 teachers. That is why they are the ones denouncing the arbitrary nature of the government’s demand to surrender their hard-earned money. The confiscation of their funds was approved by the Monetary and Financial Code adopted last September by the National Assembly.

This document stipulated that the Banking would hire external auditors to examine the more than 60 additional private funds in the country whose savings amounted to almost $1,0 billion.

Then it decided that the funds have received state support for their establishment or strengthening and therefore pensoniers must return that money to the state.

Among the pension funds that were being scrutinized by the audit was that of the Magisterium, whose spokesman, Juan Jose Castello, said they have not received anything from the state and that the audit commissioned by the Superintendency of Banks has not concluded yet.

On the other side is the argument issued by Biess president, Richard Espinosa, who says that the audit has already determined that the bottom of the education sector recorded a deficit in the period 1999-2000, which was covered by 40% by the Ecuadorian Institute for Social Security, which had contributions from the State.

Espinosa also said that from the $405 million that teachers claim as their only 17 million are in cash and the rest was invested in real estate projects.

Other funds that have been transferred to the Biess add up to three million and belong to the workers of the South Central Regional Electricity Company, at the Polytechnic School of the Army and the civil servants of the Ministry of Interior and Government in the provinces of El Oro and Morona Santiago. However, members of these groups have not shown any oposition against the government’s decision.

The message that has been issued by the government of President Rafael Correa is that the money from these unions “will be managed in a technical, efficient and independent way to improve its stability and performance for shareholders.”

But so far, the message has not sit well and dozens of teachers have gathered at the offices where their savings are managed. There have been scuffles and violence as many contributors have not received answers about what exactly will happen to their life savings or how and when will they be able to use their monies.

This episode provides two very hard but powerful lessons. First, the government that has the power to give you something also has the power to take it away; and second, many bureaucrats in government share the firm believe that they are beter fit to manage other people’s money even though they are unable to manage their own or the one in the coffers of the central government.

No one who understands sovereignty and self-responsibility will ever agree to hand over their money or property to a government, because it is clear this entity is not well suited to manage it. Therefore, the only weapon left that a government uses to obligate its citizens to hand over their life savings, as it happens in the case of Ecuador, is violence.

Deny the government access to your home or property, your savings or pension fund, and it will come and take it all from you. That is a lesson that most people need to learn.


Luis R. Miranda is an award-winning journalist and the founder and editor-in-chief at The Real Agenda. His career spans over 18 years and almost every form of news media. His articles include subjects such as environmentalism, Agenda 21, climate change, geopolitics, globalisation, health, vaccines, food safety, corporate control of governments, immigration and banking cartels, among others. Luis has worked as a news reporter, on-air personality for Live and Live-to-tape news programs. He has also worked as a script writer, producer and co-producer on broadcast news. Read more about Luis.


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About The Author

Luis R. Miranda is an award-winning journalist and the founder and editor-in-chief at The Real Agenda. His career spans over 18 years and almost every form of news media. His articles include subjects such as environmentalism, Agenda 21, climate change, geopolitics, globalisation, health, vaccines, food safety, corporate control of governments, immigration and banking cartels, among others. Luis has worked as a news reporter, on-air personality for Live and Live-to-tape news programs. He has also worked as a script writer, producer and co-producer on broadcast news. Read more about Luis.

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