I want to tell you a story of what happened in Ireland 4 years ago and to quote my friend David Woods, I ask the people of Ireland “Where is the outrage?”

Let’s say that you being a prudent person had decided that you wanted to save up some money to sustain yourself in your old age. Money to pay your heating bills and buy your clothes and your food and let’s say you saved up over the last 20 years a sum of €200,000. You estimated that as you were approaching 65 a cash fund like that would provide you with €10,000 a year for 20 years before your money would run out.

Let’s say you didn’t trust the banks and who could blame you! In your wisdom you decided to keep the money at home in amounts of €5,000 hidden in different places.

One day by mistake you left the door of the house open and a burglar entered and found one of your bundles and took €5,000. As the burglar left a neighbour spotted him and he was quickly arrested and 6 months later he ended up in jail for taking your cash.

In June 2011 Michael Noonan decided to do a dawn raid on everybody in Ireland who was wise and prudent enough to save for their old age.

It is quite unbelievable what happened. Let’s assume that you had the same €200,000 saved for your retirement but instead of having it at home under the mattress or wherever, you prudently had your pension savings with one our solid financial insurance companies.

In June 2011 a compulsory withdrawal of .6% of the value of yours and every other retirement fund in the country was introduced and this money was basically robbed/extracted from your pension savings. The same thing happened in 2012 and 2013. That is a total of 1.8% of €200,000 for those three years which amounts to €3,600. In June 2014 the withdrawal will be another .75% of your fund which is another €1,500.

By June of this year the total taken from that prudently saved €200,000 will have been a whopping €5,100. Yes it is an outrage and this most unjust/unfair withdrawal must be stopped and in my view should be challenged in the courts and the money taken should be repaid.

Now this money taken was not a tax on profit this was an extraction of money from your building retirement fund.

Who gave our Government the right to take money from our retirement savings accounts to basically try to replace the money that had been lost by reckless borrowers, bankers, sloppy legislators and stupid town planners?

The really bizarre thing about the pension’s withdrawal/extraction is that if you were one of those people who couldn’t be bothered saving for the future and who thought that either your employer or the government was going to look after you in your old age you didn’t have to pay anything. No pension fund no loss…perhaps no financial independence either though!

In Ireland most of the country’s central pension reserve fund has been raided to fund Ireland’s bail out. As of now there is no fund to pay the current pension payments to retired politicians or retired civil servants. All of these considerable payments are made out of current income and expenditure. 

The old age pension age has been moved from 65 to 66 and will soon go to 68 and when people actually do get to age 68 it is uncertain whether or not the state will be in a position to fund the payments at that time.

The only certainty in this very uncertain world that is the economy of Ireland is that if the citizens of Ireland want to have income to sustain them in their old age they have to do it for themselves and not be depending on anyone else.

As of now very few people in Ireland will have sufficient moneys in their retirement funds and many will have to keep working till they drop to pay their day to day expenses.

Everyone needs to be encouraged to save more into their retirement funds and not to be penalised for doing so. The first step is to find the outrage and demand the abolishment of these very wrong and unjust withdrawals of cash from the prudent retirement savings of our people.

The next time a politician comes to your door…..have a gentle word with them and tell them you will never ever ever vote for them again until they stop stealing money from our retirement plans!

 Ted Dwyer Family Business

 February 2014

Ted Dwyer is the Founding Director of City Life Wealth Advisors a family business in Cork