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Do any government pensions around the world have a requirement to demonstrate that their financial plan is indefinitely sound? That is, not selling out the viab
by Waterluvian 3y ago
Do any government pensions around the world have a requirement to demonstrate that their financial plan is indefinitely sound? That is, not selling out the viability of the pension plan for future generations.
- throwaway98797 3y agothere’s no way to guarantee this
- Waterluvian 3y agoWell no. But you can set certain assumptions and require that any financial plan adheres to them.
- MichaelZuo 3y agoSet by who? By definition the current electorate is fine with what they have assumed so far.
- rich_sasha 3y agoSome governments rely primarily on private, defined contribution schemes. So they are "safe" in that the government isn't promising anything, and so can't underdeliver. But the pension provider sure can, and indeed usually people don't save enough for retirement.
- andyferris 3y agoDemonstrate to who? There is no "world government". Where I live (in Australia) the vast majority of "pensions" are funded by individual's regulated superanuation savings (like a 401K?), with the government pension as just a safety net. In our case "selling out" would actually be "stealing people's money", which could theoretically be achieved by tax, but would be ridiculously unpopular and rather nonsensical. It's not perfect but it means the current young people aren't funding (all) the current old people, so it smooths out the changes in demographics somewhat. And since the superannuation fund might invest internationally, its value isn't necessarily as tied to the national fortunes as would be a bank account with Australian dollars or a governement pension, again buffering against the risks that come with an aging population (and declining economy).