Even before the euro crisis, people were worried about Europeâs pension bomb. State-funded pension obligations in 19 of the European Union nations were about five times higher than their combined gross debt, according to a study commissioned by the European Central Bank. The countries in the report compiled by the Research Center for Generational Contracts at Freiburg University in 2009 had almost 30 trillion euros ($39.3 trillion) of projected obligations to their existing populations. Germany accounted for 7.6 trillion euros and France 6.7 trillion euros of the liabilities, authors Christoph Mueller, Bernd Raffelhueschen and Olaf Weddige said in the report. âThis is a totally unsustainable situation that quite clearly has to be reversed,â Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington, said in a telephone interview. A recession threatening the worldâs second-biggest economic bloc, along with efforts to reduce debt across Europe, is exacerbating the financial risks. Stable or falling birthrates, plus rising life expectancies, are adding to pressures, with the proportion of economic output devoted to spending on retirement benefits projected to rise by a quarter to 14 percent by 2060, according to the ECB report. Increased retirement ages and lower benefits must be part of any package to hold the 17-nation euro area together, according to analysts, including Fergal McGuinness, the Zurich- based head of Marsh & McLennan Cos.âs Mercerâs pensions consulting unit for central and eastern Europe. http://www.bloomberg.com/news/2012-...reat-grows-as-regional-economies-sputter.html
The entire global economy is one vast ponzi scheme. Pensions are but one aspect. The current model requires continuing exponential economic growth to support itself. Clearly this is completely unsustainable. It doesn't take a genius to work out that this is all going to come to a rather unpleasant head.
Obviously the present system is not only unfair but unsustainable. Why the rich should get bigger pensions than the poor is a relic from the past of a bust capitalist/socialist system. The sooner the greedy elite realize they have obligations, the sooner the problem is fixed. The fix is simple. Put all the money available for the country's pensions in one pot and then pay it out equally to the pensioners annually.This makes the whole pension problem sustainable. Was it the rich that got dirty on construction and other jobs ? Oh no. and they have already been well rewarded for their activities. Get real get decent this is 2012 not 1900 !!
i didn't realize governments gave out more in soc sec to the higher income people who had paid in more their entire lives. i was always under the impression that there was a set amount that everyone got. at least in the US you either qualify or you don't based on how many years you have worked and paid in, but the check you recieve is always the same for everyone much as you suggest. the problem is that we have lopped all the money into one pot and our politicians have stood below it for the last 20 years drilling as many holes as they can to fund any program that comes to their minds. now someone just stuck their head above the rim and is seeing how woefully inadequate the amount left is.
Hmmm, whatever other valid points this article mentions, surely it's meaningless to offer a number for the liabilities, without providing an estimate for the assets currently held against these liabilities?
I regret I don't know about the US system but here in Britain the pension is earnings related. i.e. the higher the earnings the greater the pension. There is the company pension and state pension for which everyone qualifies. The latter is peanuts to the rich and inadequate for the poor. It's a choice of cut down on the food or heating usually. Either way hastens a miserable end.
Um, not sure what you are talking about but Social Security in the US is not the same for everyone and is based on how much you paid in. That is why you can go to the SS site and see what your projected benefits will be (based on how much you have contributed and how much you expect to). http://www.ssa.gov/planners/calculators.htm Social security isn't supposed to be welfare - it was designed from the beginning that benefits be tied to amount you contribute. http://en.wikipedia.org/wiki/Social_Security_(United_States)#Benefits
OH YEAH!!! EURUSD @ 126.89. Where is the bottom? All the talk two years ago about the fincial mess being a non issue. Way to go A. Merkle. ; 0 Welcome to Planet Misery, Akuma Gold back in play