Over the last century, pensions have extended financial support to millions retired. However, due to the continuous bearish trend in the financial markets, most of the pension funds have turned red. The growing mismatch of assets and liabilities in pension funds raised serious concerns about the future of the retirees.
Social
security has been assuming the center stage ever since
the collapse of the stock markets in 2000. Though initially,
a very few people were worried about the future of their
social security, it has now transformed into a big crisis.
A large population across the world is seriously affected
by depreciation of funds investments. Pension funds
riding high on the bull market of the late 1990s have
promised more returns to the investors than what can
be really affordable.
Worldwide
pension funds are known more for their social security
element. It has assumed more importance from the day
private sector has started replacing the state. In a
pension fund system, any employee working with the state
enterprise was saving in bits and pieces in the pension
funds and was assured of his social security needs once
he retires. In the absence of such a system, employees
have to save on their own and perhaps sometimes put
in more hours of work to sustain. But with pension funds,
employees of both state and private sector are assured
of their future safety.
In
spite of the good features of the pension system, it
ended up in trouble. The crisis is in the making as
the pension liabilities of various funds across the
globe have shot-up. The problem is more pronounced in
European countries followed by US and Japan. The escalating
pension demands have forced the governments worldwide
to cut down pension benefits, which are being currently
financed from taxes on working classes.
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