Feb 26 2018, 07:01 AM
QUOTE(Mr Gray @ Feb 26 2018, 12:53 AM)
You're confused between two types of pension system. Defined contribution vs defined benefits.
Defined benefits such as government pensions is unsustainable, as you're guaranteed to get a certain amount of money until you die. And even after that, your spouse would get it. This type of system requires more and more contributor to support it. It's good for the pensioners, but bad for the system provider aka government.
Defined contributions, such as EPF (Malaysia) and CPF (Singapore) is sustainable. Because you'd only get the money the you put in the pot, plus interests.
Go and read more about pension system. Uncle google can help you a lot.
I belong to a defined benefit super in Australia. It gives you a choice to decide upon retirement of a lump sum or a pension for life (and wife gets 2/3 of your pension after you die) or you can decide on a part lump sum/part pension. As you have correctly stated, this kind of retirement scheme (defined benefit scheme) is sending the govt broke as they guarantee the payout (and need to meet any shortfall) - this is why the govt has slowly been phasing it out since the 90s.Defined benefits such as government pensions is unsustainable, as you're guaranteed to get a certain amount of money until you die. And even after that, your spouse would get it. This type of system requires more and more contributor to support it. It's good for the pensioners, but bad for the system provider aka government.
Defined contributions, such as EPF (Malaysia) and CPF (Singapore) is sustainable. Because you'd only get the money the you put in the pot, plus interests.
Go and read more about pension system. Uncle google can help you a lot.
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