As Germany grapples with the intricacies of its state pension system, the federal government's yearly commitment surpassing €100 billion raises concerns. The postponed introduction of the equity pension further complicates the financial landscape. In the end these systems are gigantic Ponzi schemed that will need growing subsidies as the demographic situation worsens.
10 sats \ 9 replies \ @Undisciplined 28 Nov 2023
Have defined contribution plans not made it to Europe yet? Or, is there some sort of moral objection to them?
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628 sats \ 8 replies \ @TomK OP 28 Nov 2023
Is it ESG-friendly?
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25 sats \ 7 replies \ @Undisciplined 28 Nov 2023
It can be. Most defined contribution plans restrict the investment options pretty dramatically, so they could restrict it to ESG approved investments.
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628 sats \ 6 replies \ @TomK OP 28 Nov 2023
I asked because the germans have fallen deep into this crap. It's like a religion
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25 sats \ 5 replies \ @Undisciplined 28 Nov 2023
I mean they could only offer government bonds if they wanted to. The benefit is that defined contribution plans can't go insolvent or have a huge unfunded liability issue, because the risk gets shifted to the employee's portfolio.
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628 sats \ 4 replies \ @TomK OP 28 Nov 2023
Ah ok. I don't think that this type of plan exists over here.
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25 sats \ 3 replies \ @Undisciplined 28 Nov 2023
Most US retirement funds have shifted to this model over the past twenty years or so. Basically, it's just an investment portfolio that you and your employer are forced to contribute to and that you aren't allowed to withdraw from until retirement.
One of the reasons it worked politically is that it funnels crazy amounts of money directly to Wall Street.
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628 sats \ 2 replies \ @TomK OP 28 Nov 2023
That's always the idea behind stare driven pension plans: where can we onload our debt/crap
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