The state pension system

When I wrote this note in my note­book about a year ago, I decided not to pub­lish it, since I thought it wasn’t worked out properly. But who has the time to work ideas out these days? “Ready. Fire! Aim.” Right?

Now every­one and his dog is talk­ing about it,¹ and once again I regret what I didn’t do.

So, briefly and naively, here it is as it is.

The state pen­sion system. In fact, state pen­sion pro­vi­sion is no more reli­able than its pri­vate counterparts. What’s more, since it’s run by offi­cials, people man­ag­ing other people’s money, it’s more vulnerable. Officials easily dodge responsibility.

A pri­vate com­pany can col­lapse: I think that’s the most common stone thrown at pri­vate pen­sion systems. Right, and the state can’t col­lapse? Is the state for­ever? Tell that to my grandmother. Her par­ents were born and grew up in one State, she lived into old age in another, and when she retired, her State col­lapsed, taking all her sav­ings with it. And I, her grand­son, now live in a third State.

/* third both in order and in stan­dard of living, by the way */

Even in a state that hasn’t col­lapsed, you can easily be deprived of the pen­sion you’re owed. And in gen­eral, under a state pen­sion system, your life in old age will be in offi­cials’ hands. Do you want that, @username?

On top of that, rising aver­age life expectancy com­bined with a polit­i­cally fixed retire­ment age (rais­ing the retire­ment age is sui­cide for any politi­cian who so much as brings the sub­ject up), plus falling birth rates (and these are world­wide trends that won’t go away in the fore­see­able future): these three fac­tors put the state pen­sion system in dire straits. Pension funds are simply unable to meet their oblig­a­tions to pensioners. This applies even to the most “con­sci­en­tious” pen­sion funds of the most stable devel­oped countries.