Archive for July 10th, 2008

Many individuals have spent the greatest part of their lives contributing to society both through the work that they have provided as well as through the taxation and securities that they have paid. Throughout the educational process when such individuals were still young, they were brought up to believe that the way to be successful in life was to perform well in school, get a well-paying, stable job in which one could contribute and earn a living, get married and raise a family and, once a ripe age is reached, the cherry on the cake would be to retire and enjoy the ‘golden years’ of their lives and live happily ever after on a state pension.

The reality has been changing and continues to change and such changes are gradually but surely sending shocks throughout the system. For one thing, the concept of the stable job is dissipating in favour of a more flexible workforce where movement is a fact of life.

Secondly, it takes about 4 working individuals to support the pension of the average retiree and, in the context of an ageing population; this is placing strain upon resources. The practice is unsustainable. Being most suited to growing (or at least stable) populations, the pinch of this reality is being felt, with pensions remaining on the low side while the age at which one becomes applicable for pensions creeps upwards. This has a two-pronged effect.

Materially, requiring the taxation contribution of four working persons to support a single pensioner in an ageing population forebodes a coming bottleneck where the functional continuation of pensions will no longer remain sustainable. Already the motions to shift the pensionable age upwards, under the convenient justification in the form of an increased life expectancy, may itself be interpreted to be a quiet admission of a system groaning beneath the weight of its own burden. A not so quiet potential sign of admission is the growing popularity and media emphasis on private augmentation in social securities and private pension schemes.

I am under the impression that this has not gone unnoticed by the general population. There is a thus far suppressed but growing awareness of the situation and a growing fear that the mandatory social security dues paid to the government under the impression that such would be going towards one’s own pension, may in fact not be honoured. One likely reason why this may not have been brought to the fore as of yet is because the engine is still grinding on and has not ground to a halt as of yet – the pensions are still being honoured so far – out of what is supposed to be the securities of the pensioners of tomorrow.

Once the reality of the situation does sink in however, the social implications may make themselves plainer to see. While it is highly doubtful that the younger generations would look upon their elders as parasites in the event of a pension crash, and would almost certainly not attribute blame in the event of a seizure, the elderly person may feel the weight of burden upon themselves simply because that is the placement that the system would have engineered them to assume in the present of any such crisis to be. As for the Government… well the Nationalists have already gotten away with rises in VAT, departure taxes, utilities surcharges (the precursor of which Labour failed to get away with a decade earlier) and who knows what more. People will still pay through the nose and the people will still blindly and unquestioningly support those who seem accountable only to themselves.