(From a recent issue of MoneyWeek, UK.)
Wednesday, March 23, 2011
Who pays the pensions
Many people believe that what they pay in taxes now is being saved up to pay for their pension when they grow old. S'not so, what's being paid now is paying for the current pensioners. And when the baby-boomers retire very soon, there may be a problem, it is a very large chunk of population to have on permanent vacation for 25 years, paid for by much small groups of younger generations.
Sorry, Eo, you are grossly misinformed.
ReplyDeleteThe UK state pension scheme is funded by the mandatory contributions of employed workers. The Government has invested those funds (and raided them for the general benefit of the nation) so as to be able to pay the state pensions of the people who qualify. The fund is in surplus to an enormous extent. Actuarial reports show there is ample funding for many years, and (of special interest to me and a number of former UK taxpayers) there is ample funding to pay all qualified recipients equally. At present, UK pensioners have their pensions uprated annually, whether they live in the UK, Denmark, Croatia, or the United States of America - but *not* if they live in Canada, Australia, New Zealand, South Africa and a number of other countries. This inequity must be stopped and successive UK governments have refused to treat UK citizens equally, regardless or state of residence.
The fundamental fact is that the US social security system is funded under the same theory of finance that Bernie Madoff used for his investment empire and is now serving life in prison for
ReplyDeleteI'd say a good chunk of the baby boomers are already retired and the system seems to be coping.
ReplyDeleteBruce, you're a fucking moron.
Obviously I would rather that I'm wrong! And I don't know all *that* much about it, I'm just quoting some pretty smart people who do.
ReplyDeleteEolake, I wish you were wrong, too, but I don't think you are. It's CalaryMark who is misinformed, and John W Campbell who is the REAL fucking moron. The system may be "coping" now, but it WON'T last, and there will be no retirement for me.
ReplyDeleteKenneth: Calgarymark is misinformed, apparently?
ReplyDeleteCould you elaborate?
Yeah, I would like to know where I'm misinformed too. My information comes from the Canadian Alliance of British Pensioners http://www.britishpensions.com/ - You have to be a member to get full benefit of the site. They - we! are pretty well informed, having taken a lawsuit all through the UK legal system and on to the European Court of Human Rights (which, too is misinformed - appeals are under way). It is important to point out that I'm referring to the UK scheme, since that is where Eo is located - the US experience may well be different.
ReplyDeleteCalgaryMark said...
ReplyDelete"It is important to point out that I'm referring to the UK scheme, since that is where Eo is located - the US experience may well be different."
Yes...I had wondered about what country that excerpt was referring to because, when I read the last sentence, I almost fell off my chair from laughter because that so does NOT reflect Corporate America! Anyone who is in their mid-40's or early 50's can tell you that they are the FIRST to see the door, in a downturn, and the ABSOLUTE LAST to get rehired, when the tap is turned back on! :-(
And...the elderly are "looked down upon" even more so - even from their own children - in this nation, as well! In fact, there are family members that make it their business to steal the social security numbers of their own seniors and their own babies, who we are made to register w/the Social Security department before the child has even been released from the hospital, on its first full day of life!
And...there was a time when people worked and invested their entire lives, at one job, but that will not be this generation! Corporate America bows to the Shareholder; they don't care about the employee. That went away w/business owners like Mr. Hewlett and Mr. Packard who modeled what "taking care" of an employee looked like and what "loyalty" looked like. After they were completely out of the picture, that entire model went down the toilet and the nation followed suit! And...as was already mentioned, that, together with the lovely Madoff MESS, we got to watch this nation crumble! People had been investing but, obviously and sadly, not in a very secure vehicle! But...it is STILL going to have to be the model for the future: to "self-secure" because many companies already don't offer investment vehicles to their employees! Anymore, a person is just DAMN GRATEFUL to have a fricken paycheck to pay the bills and put food on the table! :-(
You paint such a black picture of America TC. Coming from a UK resident it's refreshing to see that some of you CAN see beyond the rose tinted glasses and realise that the US is in a shitty state like many other countries
ReplyDeleteUS! US resident!!! :-)
ReplyDeleteC'mon Kenneth, rejoin the conversation.
ReplyDeleteWhere were you talking about? (UK, USA, elsewhere?)
Where am I misinformed?
Ok, CalgaryMark, I was assuming you were misinformed about Eolake being misinformed. Admittedly, I don't know much about UK pensions, but I didn't think it could be any better than US Social Security, where the "surplus" is an illusion and the system is on the verge of collaspe. Retirement truly IS an abberation of the 20th century and will never be experienced by people like me. By the way, you and Anonymous should know that, if anything, I find TC Girl's vision of America too optimistic.
ReplyDeleteThanks Kenneth - I can't speak at all about the US situation (nor most other countries). I like, and try to abide by the comment (I think it was Oscar Wilde's): "It is better to remain silent and be thought a fool than to open one's mouth (or put fingers to keyboard in the modern context) and remove all doubt".
ReplyDelete