WI the public pensions systems that were put in place in most Western nations since the end of WWII, were fully-funded? I am thinking here of income-related (contributory) schemes, not social assistance for lower-income older people, which is different.
I admit to not knowing a great deal about the workings of these systems, but I am aware that in most cases the contributions of employers and employees into the system is mostly notional rather than actual, and it is just assumed that a future government will come up with the money when the time comes to pay.
However, what if the decision was made to make these systems fully-funded right from the beginning, similar to how most private pension funds work? So for instance if the government takes 10% of most employee's income, this money would be quarantined from other taxes and invested in a mix of bonds, debentures, property and shares, by a statutory public agency.
Basically what I am thinking of here is what are currently known as 'sovereign wealth funds'. However currently only a very small numbers of nations, such as Norway and the United Arab Emirates have these. What would be effect of them being universal among most Western nations?
I can see this idea being popular on the right, as the fully-funded nature of the systems would appeal to fiscal conservatism.
OTOH the left (especially in Western Europe, not so much in the USA) would like it as they would effectively over time indirectly nationalise or 'socialise' the economy.
What would be the advantages of such as system? What would be the disadvantages? I think much thought would have to be put in to making the government investment agency independent of direct political control, in order to stop political considerations overriding economic considerations.
I admit to not knowing a great deal about the workings of these systems, but I am aware that in most cases the contributions of employers and employees into the system is mostly notional rather than actual, and it is just assumed that a future government will come up with the money when the time comes to pay.
However, what if the decision was made to make these systems fully-funded right from the beginning, similar to how most private pension funds work? So for instance if the government takes 10% of most employee's income, this money would be quarantined from other taxes and invested in a mix of bonds, debentures, property and shares, by a statutory public agency.
Basically what I am thinking of here is what are currently known as 'sovereign wealth funds'. However currently only a very small numbers of nations, such as Norway and the United Arab Emirates have these. What would be effect of them being universal among most Western nations?
I can see this idea being popular on the right, as the fully-funded nature of the systems would appeal to fiscal conservatism.
OTOH the left (especially in Western Europe, not so much in the USA) would like it as they would effectively over time indirectly nationalise or 'socialise' the economy.
What would be the advantages of such as system? What would be the disadvantages? I think much thought would have to be put in to making the government investment agency independent of direct political control, in order to stop political considerations overriding economic considerations.
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