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Comment by ajsnigrutin | Hacker News Reader

The problem (atleast in slovenia) is, that you don't get back the amount that you paid in. Eg. you work 40 years, and expect 20 years on pensions (made up numbers, just an example).

If you get an average paycheck, pay 25% of it into the pension for 40 years, you expect to get approximately 50% of the average paycheck at the time of retirement. Well.. you don't (atleast not here). This also presumes, that there are 2x as many workers that pay into the fund, as there are retirees taking out of the fund... which sadly is not the case anymore, and the situation will get worse and worse.

Also, due to many laws and changes, every few years, you get average-paid people retired in eg. 1991 that receive more than the average paycheck in retirement, and newly retired people getting 400eur of retirement (=not enough to survive).

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> The problem (atleast in slovenia) is, that you don't get back the amount that you paid in. Eg. you work 40 years, and expect 20 years on pensions (made up numbers, just an example).

I don't know you but I never, ever, had the impression I'd get what I paid into any social security system. Neither here in Sweden or even less in Brazil. My salary is just too high compared to the median so I never had the thought that everything I paid into I'd get back as benefits.

And to me, that's ok. I earn quite above the average, I don't mind that I can help fund some part of society with my work if this society is functional and well managed, so in Sweden I'm perfectly fine with this arrangement. In Brazil it was the complete opposite, even though I don't care about paying taxes, I do care about taxes always being stolen by a multitude of corrupt actors in Brazil.

You're talking about a different issue (or indeed a non-issue). It's not that high income Slovenians get a lot less out of Slovenian state pensions than they pay in. It's that _everybody_, including low income Slovenians gets a lot less out of it than they contributed. In fact, if Slovenia is anything like Romania, the percentages often work out a lot better for high income contributors.

^yes, this.

I chose the average on purpuse, to do just that. Poor people pay less, and are "subsidized" by the rich, who pay more, but an average person should get as much as they paid in.

Considering that some people die young (before they retire), an average person should get even more than they paid into the system, because the heirs of the dead usually don't get the dead persons pension (with some exceptions, eg. underage kids)

I guess there's another issue with this equation: avgOUT = avgIN + L

The L(osses) ... the pension/social/levy system - no matter which country we're looking at - appears to have been hijacked by an ever growing parasitic group of financial institutions that milk whatever they can into their private pockets (and their shareholders').

Every penny in fees they receive for "working out" specialized retirement plans is in a way a L(oss) for society. Why? Because no matter what ingenious system a state devises, it all comes back to the fact that the current working/healthy part of the population has to provide for tho elderly and the sick and whoever can't provide for themselves. Every kind of juggling around with the money adding unnecessary steps in between is just milking the system for private gains.

I know nothing about Slovenia, but my hypothesis is that this is (kind of) by design. Those with good incomes subsidize those with low incomes, and everyone subsidizes those with no income.

The only way to 'earn more' is through a positive return on investment, but pension schemes necessarily must err on the 'safe side'. And currently 'safe' interest rates are negative.

> Those with good incomes subsidize those with low incomes,

This keeps the average values the same (that's why I used the average example)

> and everyone subsidizes those with no income.

This seems to be an ongoing problem, where we on one side need workers, and on the other side pay unemployment benefits to people who don't want to work. This is then translated to pensions, where people who work only eg. 10 years (instead of 40) get a small pension, but still more than the share they paid into the fund.

I consider the subsidization of poor and no-income as the cheapest alternative. Pay them enough to live and the external cost won't be more. Theft, property damage, judicial system and incarceration get lot more expensive than just paying them something. And all the money going to them is anyway spend so on large scale it might not even be net negative.

In Poland, by design, now people are paid on average >60% of paycheck while retiring at age 60-65, not taking into account some specific priviledges like for miners.

Meanwhile, people in 20s-30s are projected to get 25% while retiring at close to 70. The system does not make any sense to me.

It's the system that favors the voting majority.

A sate pension that pays 50% lol that's a big ask. I assume you have your employers pensions as well.

We don't have separate pensions. You pay into the state (~25% of gross income, part is taken from your gross, part is paid by the employer, to get a 'gross-gross' value), and that's your pension.

We have separate saving schemes for pension, where your income tax is deferred until you take the money out (due to progressive tax brackets, your tax percentage will be lower when you're retired, than it is now), but usually employers have nothing to do with that, and with interest lower than inflation, it's just not worth it.

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