(The Real Agenda News) In Europe alone, the IMF promotes the arrival of over 5 million illegals to sustain the decaying pension funds.
The governments of Latin America, North America, and Europe have mishandled, not to say stolen, the money saved by workers for decades.
Most of the public and private savings accounts and pension funds were looted by governments to pay for political promises and an insurmountable public debt.
Government handled pension funds are some of the biggest scams ever perpetrated on the working classes in the history of humanity. Consider this: The average person begins working at 18 years of age and contributes to a public fund for over 40 years.
Once it is time to retire, the worker files the paperwork to receive proportionally the average salary he or she earned 40 years earlier. What happened to the earnings that his pension contributions earned over 4 decades?
Did they help pay for other people’s pensions? The answer is a decisive No. The profits made by governments on the monies provided by the working class over decades of hard work was stolen to pay for never-ending entitlement programs, skyrocketing interests from debt accumulated by governments over dozens of years.
Many of these payments are made to international banking institutions like the IMF itself, the World Bank and so-called partner states that lend money at a large profit.
What will happen to the pensioners of the future? In a recent analysis, the International Monetary Fund outlines a way to reform the system.
To do this, it draws up projections with all the variables that condition the Social Security accounts: the number of retirees that is expected, the number of workers, immigration, contributions or generosity with pensioners.
The IMF concludes that it is possible to articulate a financially sustainable system that is socially acceptable at the same time.
But yes: you have to touch many elements, make reforms in depth and, in any case, pensions will be reduced compared to the average salary.
“A public pension is not intended to cover the full income that the retiree would need to retire”, explains the IMF.
If there is such an expectation, it must be made clear that it cannot be fulfilled,“the report stresses. Hence, it asks governments to establish complementary plans.
On the one hand, the Fund collects the projection of retirements that will be in the coming years.
Given that the contributors of today are the pensioners of the future, the only certainty is that the number of benefits will grow.
On the contrary, the rest of factors can vary much more: the number of people working, immigration, contributions made by contributions or other sources of income and the generosity of the system with pensioners.
Adding all these variables and with the intention of giving an idea of the challenge, the IMF outlines various scenarios by 2050.
One is based on the premise that the current generosity is maintained: now the average pension represents almost 50% of the average salary.
To preserve this status, according to the estimates of the Fund, contributors would go from contributing 21% of the salary to 47.8% in 2050. And spending on pensions would be at 22% of GDP, twice the current rate.
In another scenario, the IMF freezes contributions at the levels they are now. Then the expenditure on GDP remain the same.
But in this case the funding of the system collapses during the next 30 years, and the relationship between pension and the average salary is cut by more than half to 22.6%.
In the Fund’s opinion, neither scenario is acceptable. Neither workers can bear a pressure for contributions as in the first case. Neither can a pensioner live with dignity with only 22% of the average salary as in the second.
So the Fund draws an intermediate horizon. In this third hypothesis, spending on GDP would be at 12.9% and the contribution for contributions would rise to 27.3% of their salary, a very high level.
Income would have to increase by raising the ceiling of maximum contributions while leaving the ceiling of the maximum pension the same.
That is, those who earn more would contribute more but would not receive more, penalizing contributivity, the Fund admits.
In addition, some 5.5 million immigrants would need to arrive in countries like Spain. That represents 12% of the current population and a similar proportion to the number of people that entered the country between 2000 and 2007.
And the rate of people working would have to climb from 59.7% to 79%, a very demanding milestone and more difficult to achieve if prices rise.
“This could be achieved through parametric reforms of pensions that lead to greater participation in the labor force, longer working lives and structural reforms that lower the natural rate of unemployment,” it says.
Even so, the pension would end at 35% of the salary. And that, in the opinion of the IMF, does not seem acceptable either. Therefore, consider that you need to save around 5% of the annual salary.
So the IMF recommends that governments adopt the alternative of “automatically enlisting workers in a second private fund backed by the State”.
It also suggests, as another option, private business plans that fatten the savings by taking a part of the future salary increases, in the style of the British system inspired by the Nobel laureate Richard H. Thaler.
Finally, given that there is a lot of savings in housing, the IMF urges that mechanisms be encouraged to sign reverse mortgages.
In the opinion of the men in black, this scenario would be “plausible, financially viable and possibly socially acceptable”.
As you can see, the size of the figures means that you cannot face the challenge with a solution taken from the hat.
You have to touch many things and none by itself fixes it. And, above all, “there is no room to reverse the reforms”, says the Fund.