Saturday, 24 June 2017

Pension Liabilities - serious problem but overhyped

No one will deny that with an aging population and dropping birth rates the pension systems in many - if not most - countries is in serious trouble sooner or later. But dramatic talk of tens of billions of 'unfunded' liabilities is off the mark. Of course one can look at the spending side, add up the expected numbers and discount them to the present. All very well, but then you have to do the same for the other side of the equation. No individual would say he has 'unfunded' liabilities by adding up his expected lifetime spending, at age 35 for example. Doing this would find nearly all citizens are technically bankrupt. So please listen, economists, politicians, journalists and assorted 'experts'. Try to solve the REAL pension problems rather than engage in scaremongering for political purposes. Prevent early retirement (esp in the public sector), prevent abuses in the corporate sector (huge pensions for a few fat cats), prevent costly subsidies on pension saving by the well-off, prevent expensive private pension schemes that can charge high fees while being treated to lavish tax and regulatory support that only benefits providers.
Illinois victim of dysfunctional public pension system

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