Whether Governments in Developed Countries Should Continue to Make Major Contribution to Citizen's Pension
QUESTION: Governments in developed countries should continue to make a major contribution to the pensions of their citizens. How far do you agree with this statement?
Contents
1. Introduction ........................................................................................ 2
2. Where do pensions come from? ................................................... 2
3. Four main problems faced by government ................................. 3
4. Reasons for ‘cuts’ and no ‘cuts’ .................................................... 4
4.1 Life expectancy and dependency ratio ........................................ 4 4.2 Recoveries from financial crisis ................................................... 4 4.3 Government’s obligation.............................................................. 5
5. Recommendations with evaluations ............................................ 5
5.1 Saving more now ........................................................................ 6 5.2 Increasing retirement age............................................................ 6 5.3 Shifting from DB to DC ................................................................ 7
6. Conclusion ......................................................................................... 7
7. Bibliography ....................................................................................... 8
1
1. Introduction
With the increasing average life expectancies in developed countries, pensions — which afford people a decent standard of living by offering access to an adequate amount of monthly money during retirement — have become one of the biggest social concerns in recent decades. It has been a common belief that government should have the ability to offer the bulk of pensions in order to maintain a good health of its aging citizens and thus a society with stability, which is seen as a symbol of prosperous nations. However, confronted with increasing financial
Contents
1. Introduction ........................................................................................ 2
2. Where do pensions come from? ................................................... 2
3. Four main problems faced by government ................................. 3
4. Reasons for ‘cuts’ and no ‘cuts’ .................................................... 4
4.1 Life expectancy and dependency ratio ........................................ 4 4.2 Recoveries from financial crisis ................................................... 4 4.3 Government’s obligation.............................................................. 5
5. Recommendations with evaluations ............................................ 5
5.1 Saving more now ........................................................................ 6 5.2 Increasing retirement age............................................................ 6 5.3 Shifting from DB to DC ................................................................ 7
6. Conclusion ......................................................................................... 7
7. Bibliography ....................................................................................... 8
1
1. Introduction
With the increasing average life expectancies in developed countries, pensions — which afford people a decent standard of living by offering access to an adequate amount of monthly money during retirement — have become one of the biggest social concerns in recent decades. It has been a common belief that government should have the ability to offer the bulk of pensions in order to maintain a good health of its aging citizens and thus a society with stability, which is seen as a symbol of prosperous nations. However, confronted with increasing financial
Bibliography: The Economist, 2011a. Falling short. The Economist [Internet], 7th April. Available from: < http://www.economist.com/node/18502013> [Accessed 3rd July 2011] The Economist, 2011b. Too much, too young. The Economist [Internet], 7th April. Available from: < http://www.economist.com/node/18502005> [Accessed 4th July 2011] The Economist, 2011c. Hiring grandpa. The Economist [Internet], 7th April. Available from: < http://www.economist.com/node/18474681> [Accessed 4th July 2011] Pollock, L., 2011. Public sector pensions: The known unknowns. BBC News [Internet], 1st July. Available from: [Accessed 10th July 2011] 8