Fico attacks pension funds

URL: http://www.newsflashenglish.com/170807pensionfunds2.htm

Ideas and Articles by David Robinson

17^th August 2007

Level: intermediate / upper intermediate

This lesson is the copyright of www.newsflashenglish.com

THE ARTICLE

Fico attacks pension funds

A press conference was hosted by Slovak Prime Minister Robert Fico recently (8^th August). It discussed the financial results of Pension Fund Management Companies (PFMC) in Slovakia The Slovak Spectator reported. Fico said, “There is a growing risk that pension savers in the capitalisation pillar will not even receive the sum they first contributed to their accounts.”

He expressed his concern that the companies’ cumulative losses totalled Sk1.45 billion in 2005 and Sk1.73 billion in 2006. The current law says the government is not a guarantor if pension fund management companies’ investments do not achieve their expected growth. Fico added, “and people will not get the pensions promised by bombastic advertisements, or they will get absolutely nothing.”

But the group that represents the PFMC says that’s completely untrue. Chairman Peter Socha said, “The losses of PFMC cannot harm pension savers. Pension savers’ money is deposited in pension fund accounts and the economic performance of the companies has absolutely no effect on their clients’ savings.”

The Sporitel’(Saver) civic association responded one day later saying Fico’s criticism was an attempt to mislead and manipulate the public with the aim of destroying the second pillar of the pension system.

Former social affairs minister and architect of the pension-system reform Ľudovit Kanik hit back. “Fico’s claims that savings deposited in PFMC are in danger due to their balance-sheet losses can be considered misleading. The earnings are governed by law and are separate from client deposits - as are contingent losses covered by law.”

Kanik rejected the claim that the existence of the second capitalisation pillar of the system was causing state pensions provider Sociálna Poisťovňa to produce a deficit, as the deficit existed long before the pension reforms were introduced. He added, “What is necessary is changes and adjustments to the first (state) pension pillar, which is not sustainable in the long term. The second pillar is healthy, functioning, and able to provide people with secure pensions.”

Following the government session on 8^th August Slovakia’s central bank (NBS) governor Ivan Šramko said, “The private pension system in Slovakia is safe, based on multiple controls, with savers money strictly separated from the pension companies own assets.” He added, “The losses that the companies have posted so far can be explained by the fact that the whole system has only just been launched. Some of the companies used legal accounting techniques to include all the initial costs in one year. These are the ones that posted the biggest losses. Companies that spread the costs over longer periods conversely posted smaller losses.”

START

1. PENSION FUNDS: What do you know about pension company’s and pension funds? Do you have a pension fund? Go round the room swapping stories. Change partners often.

2. DICTATION: The teacher will read some of the article slowly and clearly. Students will write down what they hear. The teacher will repeat the passage slowly again. Self correct your work from page 2 - filling in spaces and correcting mistakes. Be honest with yourself on the number of errors. Advise the teacher of your total number of errors. Less than 5 is very good. 10 are acceptable. Any more is room for improvement! More than 20 - we need to do some work!

3. READING: Get students to read the passage aloud. Swap readers every paragraph.

4. VOCABULARY: Students look through the article. Underline/highlight any vocabulary you don’t know. Look in dictionaries. Discuss and help each other out. The teacher will go through and explain any words or phrases you are stuck with!

5. PENSION FUNDS: With your partner or in small groups discuss: a) How the pension system operates in your country. b) How has it changed? c) Will it likely change? d) How does it compare with other countries?

6. FICO’S INTERFERENCE: With your partner or in small groups discuss: a) Is the Prime Minister right to intervene in the pension system? b) Do you agree with the Prime Minsters viewpoint? c) Who is right? d) What do you think will happen in the future? e) Will you loose any money? f) Will anyone loose any money? g) Is it right the top managers from these companies should take huge salaries (and allegedly expensive holidays) when the companies are posting huge losses? h) Your views of the pension business – include the governments’ current position.

7. PENSION COMPANIES: With your partner think of 4 Slovak pension companies.

1 3 2 4

8. QUICK DISCUSSION: Discuss with your partner no 7. a) Which one is the best? b) Which one do you belong to? c) What made you join your pension company? d) Were you in another pension company before you joined your present one? e) Do you belong to any other pension company? f) Your question

9. PENSION FUNDS: With your partner think of 3 advantages and 3 disadvantages of pension funds. Discuss.

Advantages Disadvantages 1 1 2 2 3 3

AFTER READING / LISTENING

1. TRUE / FALSE: After reading the article guess whether these sentences are true (T) or false (F):

a.	A press conference was hosted by the Slovak P.M. on 8^th August	T / F
b.	The companies’ cumulative losses totalled Sk1.55 billion in 2005	T / F
c.	Fico said people will get absolutely everything from these pensions	T / F
d.	The PFMC says the losses can harm pension savers	T / F
e.	Two days later the Sporiteľ Civic Association responded	T / F
f.	Central bank governor said the pension system in Slovakia is safe	T / F
g.	Some of the companies use illegal accounting techniques	T / F
h.	Ľudovit Kanik hit the Prime minister	T / F

2. SYNONYM MATCH: Match the following synonyms from the article:

a.	Risk	Big headed
b.	Savers	Not true
c.	Guarantor	Abandon
d.	Fund	Venture
e.	Bombastic	Peril
f.	Chairman	Disapproval
g.	Mislead	Assurance
h.	Criticism	Chairwoman
i.	Danger	Depositor
j.	Losses	Trust

3. PHRASE MATCH: Match the following phrases from the article (sometimes more than one combination is possible):

a.	A press conference was hosted	to mislead and manipulate the public
b.	There is a growing risk	cannot harm pension savers
c.	He expressed his concern	promised by bombastic advertisements
d.	The current law says	are governed by law and are separate…
e.	…people will not get the pensions	that the companies’ cumulative losses…
f.	The losses of PFMC	is deposited in pension fund accounts
g.	Pension savers money	deposited in PFMC are in danger…
h.	Fico’s criticism was an attempt	that pension savers in the capitalisation…
i.	Fico’s claims that savings	the government is not a guarantor
j.	The earnings	by Slovak Prime Minster

GAP FILL: READING (shortened article)

Put the words into the gaps in the text.

Fico attacks pension funds A press conference was hosted by Slovak Prime Minister Robert Fico recently (8^th August). It discussed the _________ results of Pension Fund Management Companies (PFMC) in Slovakia The Slovak Spectator reported. Fico said, “There is a growing risk that pension savers in the ______________ pillar will not even receive the sum they first contributed to their _________.” He expressed his concern that the companies’ cumulative losses totalled Sk1.45 _______ in 2005 and Sk1.73 billion in 2006. The current law says the government is not a _________ if pension fund management companies’ investments do not achieve their expected ______. Fico added, “and people will not get the pensions promised by _________ advertisements, or they will get __________ nothing.”

capitalisation bombastic billion absolutely growth guarantor accounts financial

But the group that represents the PFMC says that’s completely untrue. Chairman Peter Socha said, “The losses of PFMC cannot ____ pension savers. _______ savers’ money is deposited in pension ____ accounts and the ________ performance of the companies has absolutely no effect on their clients’ savings.” The Sporitel’(Saver) civic association responded one day later saying Fico’s _________ was an attempt to mislead and manipulate the public with the aim of destroying the second pillar of the pension system. Former social affairs minister and architect of the pension-system reform Ľudovit Kanik hit back. “Fico’s claims that savings deposited in PFMC are in ______ due to their balance-sheet losses can be considered misleading. The earnings are governed by law and are ________ from ______ deposits - as are contingent losses covered by law.”

separate danger economic harm criticism fund client pension

GAP FILL: LISTENING: (shortened article)

Listen and fill in the spaces.

A ____________________ hosted by Slovak Prime Minister Robert Fico recently (8^th August). It discussed the financial __________________ Fund Management Companies (PFMC) in Slovakia The Slovak Spectator reported. Fico said, “There is a growing risk that pension savers in the capitalisation pillar _____________________ the sum they first contributed to their accounts.”

He expressed ____________________ companies’ cumulative losses totalled Sk1.45 billion in 2005 and Sk1.73 billion in 2006. The current law says the government _____________________ pension fund management companies’ investments do not achieve their expected growth. Fico added, “and people ________________ pensions promised by bombastic advertisements, or they will get absolutely nothing.”

But the group that represents the PFMC says that’s completely untrue. Chairman Peter Socha said, “The losses of PFMC cannot harm pension savers. Pension savers’ money is deposited in _____________________ and the economic performance of the companies _________________ effect on their clients’ savings.”

The Sporitel’(Saver) civic association responded ____________________ Fico’s criticism _________________ mislead and manipulate the public with the aim of destroying the second pillar of the pension system.

Former social affairs minister and architect of the pension-system reform Ľudovit Kanik hit back. “Fico’s claims that savings deposited in PFMC are in danger due to their balance-sheet losses can be considered misleading. The earnings are governed by law _____________________ client deposits - as are contingent losses covered by law.”

DISCUSSION

STUDENT A’s QUESTIONS (Do not show these to student B)

a) Did the headline make you want to read the article?

b) Did anything in the article surprise you?

c) Do you have a pension fund?

d) What do you think of the Prime Ministers actions?

e) Are pensions important?

f) What age will you be able to take your pension?

g) Have you heard of early retirement pensions?

h) Do they have early retirement pensions in your country?

i) Do you fully understand the ‘ins & outs’ of this debate?

$---------------------------------------------------------------------

STUDENT B’s QUESTIONS (Do not show these to student A)

a) Did you like reading this article?

b) What do you think about what you read?

c) Do you think it’s a good idea to save money?

d) Do you think the pension companies are telling the truth?

e) Are the pension fund managers earning too much?

f) Do you think the pension funds will crash?

g) Will world stock markets affect these pension funds?

h) Has the public been mislead and by who?

i) Did you like this discussion?

AFTER DISCUSSION: Join another partner / group and tell them what you talked about.

1. What was the most interesting thing you heard?
2. Was there a question you didn’t like?
3. Was there something you totally disagreed with?
4. What did you like talking about?
5. Which was the most difficult question?

SPEAKING

ROLE PLAY: PENSION FUND MEETING:

In groups of three/four:

You are meeting the Prime Minister to discuss your concerns about his intensions to change the pension system in Slovakia.

Role play the following…

	Findings
1. You are Prime Minister Robert Fico	You don’t like the current system of pension funds in Slovakia. You want to have only one state pension fund. You want to close all the private pension funds. You are the Prime Minister!
2. You are a concerned client of a pension fund	You are a worried pension saver. Who is right? What can you do?
3. You are Ľudovit Kanik - ex social affairs minister and architect of the pension-system reform	You strongly disagree with the Prime Ministers views. You will fight him. You invented the current system that needs more time but works.
4. You are Peter Socha	You are the Chairman of the PFMC. You don’t see eye to eye with the Prime Minister

The teacher will select some students to discuss their situations in front of the class.

LANGUAGE: CORRECT WORD: Choose the correct words from a–d below and write them in the article.

A press conference was hosted by Slovak Prime Minister Robert Fico recently (8^th August). It discussed the financial results of Pension Fund Management Companies (PFMC) in Slovakia The Slovak Spectator reported. Fico said, “There is a growing risk that pension savers in the capitalisation pillar will not even receive the sum they first contributed to their accounts.”

He expressed his concern that the companies’ cumulative losses (1)___ Sk1.45 billion in 2005 and Sk1.73 billion in 2006. The (2)___ law says the government is not a (3)___ if pension fund management companies’ investments do not achieve their expected growth. Fico added, “and people will not get the (4)___ promised by bombastic advertisements, or they will get absolutely nothing.”

But the group that represents the PFMC says that’s completely untrue. (5)___ Peter Socha said, “The losses of PFMC cannot harm pension (6)___. Pension savers’ money is deposited in pension fund accounts and the economic performance of the companies has absolutely no (7)___ on their clients’ savings.”

The Sporitel’(Saver) civic association (8)___ one day later saying Fico’s criticism was an attempt to (9)___ and manipulate the public with the aim of (10)___ the second pillar of the pension system.

Former social affairs minister and architect of the pension-system reform Ľudovit Kanik hit back. “Fico’s claims that savings (11)___ in PFMC are in danger due to their balance-sheet (12)___ can be considered misleading. The earnings are governed by law and are separate from client deposits - as are contingent losses covered by law.”

1.	(a)	total	(b)	totalling	(c)	totally	(d)	totalled
2.	(a)	currant	(b)	current	(c)	currently	(d)	now
3.	(a)	guarantors	(b)	guarantied	(c)	guarantee	(d)	guarantor
4.	(a)	pensions	(b)	pension	(c)	pensioned	(d)	pensioning
5.	(a)	Leader	(b)	Chairperson	(c)	Chairwoman	(d)	Chairman
6.	(a)	save	(b)	savers	(c)	saving	(d)	saved
7.	(a)	affected	(b)	effect	(c)	effected	(d)	affect
8.	(a)	responsibly	(b)	responding	(c)	respond	(d)	responded
9.	(a)	misquote	(b)	mishap	(c)	misleading	(d)	mislead
10.	(a)	destroying	(b)	destroy	(c)	destroyed	(d)	stopping
11.	(a)