The ageing population has led to increasing concerns about pensions and their future sustainability. There are conflicting views on whether the government or the private sector should be responsible for old people during their retirement. Although private pension is becoming popular, my view is that it is the government’s responsibility to provide financial stability to its senior citizens in retirement.
To begin with state pension programs will help alleviate poverty for older citizens after retirement. For example, in Mexico, studies showed that 55% of its workforce benefited from state pension programs and while those in non-contributory programs alleviated poverty by 20%. These programs are usually tied to employment, so that workers will receive financial and health care benefits when they get old and stop working. In some countries, the state pension plans also include non-contributory programs which benefit those workers whose employers were not compliant with superannuation systems as well as for those individuals that never worked by reason of disability, incapacity or possibly no proper education.
Further superannuation schemes provide social security for older people in the later years. Such schemes (often mandatory) encourage long term savings. There is also recognition that adults during their workforce years do not provide for their senior years because of current consumption over savings and insufficient saving for retirement when the person is younger. With government retirement programs, there is a redistribution of income within a person's lifetime to enable accumulation of wealth. This is illustrated when a 20year old may not even consider pension contributions upon entering the workforce and focus more on household expenditure or mortgage repayments.
In conclusion, government funded pensions benefit older citizens through poverty alleviation and social security which I think should only be institutionalised through the state and not burdened on individuals in the private sector.
The
ageing
population has led to increasing concerns about
pensions
and their future sustainability. There are conflicting views on whether the
government
or the private sector should be responsible for
old
people
during their
retirement
. Although private
pension
is becoming popular, my view is that it is the
government’s
responsibility to provide financial stability to its senior citizens in retirement.
To
begin
with
state
pension
programs
will
help
alleviate poverty for older citizens after
retirement
.
For example
, in Mexico, studies
showed
that 55% of its workforce benefited from
state
pension
programs
and while those in non-contributory
programs
alleviated poverty by 20%. These
programs
are
usually
tied to employment,
so
that workers will receive financial and health care benefits when they
get
old
and
stop
working. In
some
countries, the
state
pension
plans
also
include non-contributory
programs
which benefit those workers whose employers were not compliant with superannuation systems
as well
as for those individuals that never worked by reason of disability, incapacity or
possibly
no proper education.
Further
superannuation schemes provide social security for older
people
in the later years. Such schemes (
often
mandatory) encourage long term savings. There is
also
recognition that adults during their workforce years do not provide for their senior years
because
of
current
consumption over savings and insufficient saving for
retirement
when the person is younger. With
government
retirement
programs
, there is a redistribution of income within a person's lifetime to enable accumulation of wealth. This
is illustrated
when a
20year
old
may not even consider
pension
contributions upon entering the workforce and focus more on household expenditure or mortgage repayments.
In conclusion
,
government
funded
pensions
benefit older citizens through poverty alleviation and social security which I
think
should
only
be
institutionalised
through the
state
and not burdened on individuals in the private sector.