The pension system is the biggest evil ever invented.

[John Cuthber]

"Well the UK pension system is ..."

 

Which one?

[studiot]

 

"Well the UK pension system is ..."

 

Which one?

 

 

 

All of them.

 

I have already said that, when I endorsed your question in my first post in this thread.

 

Edit Just to add that I am suprised no mod has moved this to a more appropriate section.

 

It is not Science.

Edited August 31, 2015 by studiot

[Strange]

 

Depends, do you disagree with my statement ?

 

Not really, but it sounds implausible. For example, the UK government has just introduced an "opt out" scheme for pensions; i.e. you will be automatically enrolled in a pensions scheme and you have to choose not to. Because there were too many people who, even if they new they should have a pension, hadn't bothered to arrange one.

[Roamer]

 

Not really, but it sounds implausible. For example, the UK government has just introduced an "opt out" scheme for pensions; i.e. you will be automatically enrolled in a pensions scheme and you have to choose not to. Because there were too many people who, even if they new they should have a pension, hadn't bothered to arrange one.

 

Looks like a good system, no enforced participation, just a little push to the people who don't bother to make their minds up.

In such system, if the pensionsystem is bad(or, more likely, there are better alternatives) participation-rates will still go down and/or the sytem is forced to improve.

I suppose my previou assumption only holds true for "good" pension-systems, where people can clearly see the benefit to them.

 

 

I disagree with this as an assumption. Much depends on what happens to people in any society who don't have a way to support themselves when they retire. Will they be homeless and starve? If the society ensures this won't happen, then the society is paying for elder care anyway, and probably in a less efficient manner.

 

If the society is going to pay for poor elders anyway, why do you need a pension-system ?

A better alternative is paying a minimum to elders, no matter whether they 're rich or poor, and allow individuals to safe money through a pension if they want to have more then the minimum when they 're retired.

[swansont]

 

If the society is going to pay for poor elders anyway, why do you need a pension-system ?

 

That's a big "if", and the related question of "how much?"

 

What the US pays is a meager subsistence, and that may also be true elsewhere. If I retire when planned, my pension will be about twice what I would get from social security, and that's only the defined benefits portion from paying into an annuity.

 

I also have a version of a 401(k) (investments) to which the government employer contributes as well as personal savings. But such things are only possible for people with disposable incomes.

 

A better alternative is paying a minimum to elders, no matter whether they 're rich or poor, and allow individuals to safe money through a pension if they want to have more then the minimum when they 're retired.

 

Is that not what is happening?

[georgi_zlatev]

Removing the pension system will make people more responsible for there future.They shall make small businesses,shall buy perspective stocks or bonds or buy a land and become farmers.Also when they become 65 years old they shall not retire if they can work yet.

[ACG52]

Removing the pension system will make people more responsible for there future.

It will also result in greater numbers of people in poverty and starving to death.

[ajb]

Removing the pension system will make people more responsible for there future.

Well lot of people do take responsibility by saving, investing and buying private pensions. I see the UK state pension as a safety net. Remember than not everyone has much of a disposable income to invest in the future.

 

They shall make small businesses,shall buy perspective stocks or bonds or buy a land and become farmers.Also when they become 65 years old they shall not retire if they can work yet.

Rather than actually retire, just still work. Again, lots of people are doing that and working longer than they may technically have to.

 

I also question the idea that everyone can run a small business, including a farming business. Moreover, you want people to work all day until the day they actually die?

[swansont]

 

I 'm all against forcing people to participate in pensions,

however, if people would be free to participate in a pension-system, pensions would still be used by the majority of the people who participate now.

 

Not really the case. If your employer offered you an extra $1000 a year instead of a pension, a lot of people would take the money in hand, even though it would mean turning down several thousand $$ a year in retirement. Money is generally tighter when you're young, and for a lot of folks in general.

 

And this isn't even a hypothetical argument. There are a lot of people who decline to participate in 401(k) plans, even though there is matching by the employer if they do. They are turning down free, though deferred, money. 20% don't participate at all and only 10% contribute the maximum amount they are permitted to. That's the same choice as you describe.

 

http://crr.bc.edu/wp-content/uploads/joomla/Coming%20Up%20Short%20Book%20page/myths.pdf

 

Participation tends to go up dramatically when it's opt-out vs opt-in. Still voluntary, but accounting for inertia.

[ajb]

 

 

It will also result in greater numbers of people in poverty and starving to death.

We would go back to a more traditional system where adult children pay for their parents. Given the way the West's economics are set up; two working adults just about getting by, is not really suited to also paying directly for older family members.

[iNow]

I think georgi is an anti-pension bot. He's not actually responding to anything people are actually saying, just repeating different versions of the same assertion.

[swansont]

I think georgi is an anti-pension bot. He's not actually responding to anything people are actually saying, just repeating different versions of the same assertion.

 

No, probably not. Such musing being of dubious value anyway (IMO), suffice to say georgi didn't just sign up for this thread.

[studiot]

 

 

iNow

I think georgi is an anti-pension bot. He's not actually responding to anything people are actually saying, just repeating different versions of the same assertion.

 

 

+1

 

georgi

I have asked at least twice and others many more times which pension scheme you are referring to but we have all received no answer.

 

I therefore have no alternative but to report this breach of etiquette according to the rules of this forum.

Edited September 1, 2015 by studiot

[Roamer]

 

That's a big "if", and the related question of "how much?"

 

What the US pays is a meager subsistence, and that may also be true elsewhere. If I retire when planned, my pension will be about twice what I would get from social security, and that's only the defined benefits portion from paying into an annuity.

 

I also have a version of a 401(k) (investments) to which the government employer contributes as well as personal savings. But such things are only possible for people with disposable incomes.

 

It was the "if" i was responding to.

 

 

 

Is that not what is happening?

 

Differs from country to country.

but generally something like this is happening yes.

[Strange]

Removing the pension system will make people more responsible for there future.

 

That is an assertion and can therefore be disregarded.

 

They shall make small businesses,shall buy perspective stocks or bonds or buy a land and become farmers.

 

Why the obsession with people becoming farmers? In many countries small farmers are amongst the lowest income.

 

Also when they become 65 years old they shall not retire if they can work yet.

 

Why shouldn't they retire if they want to?

[John Cuthber]

Removing the pension system will make people more responsible for there future.They shall make small businesses,shall buy perspective stocks or bonds or buy a land and become farmers.Also when they become 65 years old they shall not retire if they can work yet.

http://xkcd.com/285/

[Phi for All]

Also when they become 65 years old they shall not retire if they can work yet.

 

There are a LOT of corruptible interpretations in the phrase, "...if they can work yet".

[swansont]

Removing the pension system will make people more responsible for there future.They shall make small businesses,shall buy perspective stocks or bonds or buy a land and become farmers.Also when they become 65 years old they shall not retire if they can work yet.

 

Isn't the government forcing people to work kinda socialist (not that socialism is inherently bad, but you've decried it)? Or is it fascist, like that's a better alternative?

[georgi_zlatev]

The present pension system is two types.First is called income and expenditure and all pension insurance that are coming in is spend for pension.This is bad to spend all the money for the pensioner.The second type is capital.In this case the pension insurance is spend for bonds and stocks.This type is better but the problem is that the bonds and stocks are toxic and the money for pensions are coming from incoming pension insurance not from the investment in stocks and bonds.Or this type is functioning as the first type.That is why I think that everyone must decide what to do with his pension insurance and that today’s pension system is socialist.

[ajb]

... that today’s pension system is socialist.

You seem to say this like it is a bad thing. Why?

[georgi_zlatev]

Yes it is bad.Because young people must pay the pensions instead pensioner to earn their pensions from investments.

[Sensei]

The pension must be prohibited the way they are today.The pension model is socialist.The pension insurance is collecting in funds which invested the money in companies and the risk is distributed among all who paid this insurance.The people must not paid pension insurance but the money they receive they must to invest at their own risk.In this way public companies will be motivated to earn more profit.Not having such insurance people will be much interested where to invest their money whether In stocks,bonds or land to became a farmer after years.Now people with this pension system are irresponsible.They are so irresponsible so that they do not want to have even children.They think that somebody else must pay their pension in future.The public companies shall also be more concerned in making money.Destroying this pension system people will be motivated to start small businesses and to became farmers and they shall wanted to have children.This pension system is in favour to big companies because they get the money of the pension funds.

Unlike others I won't ask what pension system you're talking about, because it's perfectly clear here.

There is dozen of on-line calculators where employer/employee enter gross salary,

and they will calculate how much of money will go to retirement funds, ill-person pension funds (don't know how to translate it better, this includes disabled persons), etc,

and how much employee will get in hand net salary.

 

Example, copied from calculator:

Gross salary 3750.00

Retirement insurance 366.00

Pension insurance (disabled persons included) 56.25

Ill-person salary insurance (disabled persons excluded. If you're ill and temporarily unable to work, it'll be used to pay your salary) 91.88

Ill-person insurance (your own, salary for doctors, hospitals etc.) 291.23

Income tax 265.00

Net salary 2679.65

 

You missed the point of this system.

What to do with:

- ill persons temporarily unable to work

- ill persons permanently unable to work (disabled persons).

- mentally ill persons.

- people unable to have children (you're mentioning children in sense that children should take care of their parents and grandparents in future. People unable to have them will be left alone in your system)

- people who don't have children

- people who currently are taking pension/retirement

 

If you want to destroy currently existing system, all these people who are currently using this system will be literally screwed and left without money..

They were participating in system for decades, and now some georgi zlatev comes, and want to take their money.. ?

 

People, at least majority, are not responsible. (see how many famous and intelligent (or rather better word: educated) "invested" in Madoff fund)

They will spend all the money they get now. And will be left with nothing in future.

Which would be serious problem for goverment, flood of grandpas/grandmas begging for money and food on streets, searching food, bottles and Aluminium cans in trashcans..

Don't bring USA here in Europe.

Edited September 2, 2015 by Sensei

[ajb]

Yes it is bad.Because young people must pay the pensions instead pensioner to earn their pensions from investments.

But then the cycle continues. The young will get their chance... assuming the system does not change.

 

I do not quite see why this is bad.

 

What is true, is that the system today is struggling as more and more people live longer. The whole system will have to adapt to this and more private schemes, investments and encouraging saving maybe the way forward.

[studiot]

 

The present pension system is two types

 

There are several more pension types and situations.

 

Further you cannot divorce the pension from the circumstances and history around the recipient.

 

I would seriously warn any (particularly young) person reading this that georgi is ignoring all the artificial rules and hoops that control pension action and any government contribution to pension or tax implications of any particular action.

 

 

All of this can seriously affect your eventual pension.

Edited September 2, 2015 by studiot

[georgi_zlatev]

When the today's pension system bunkrupt we shall talk again.