Reform the state pension Ponzi scheme

A PONZI scheme is a fraudulent investment operation that pays increasing returns to its investors primarily from the money paid by subsequent investors, rather than or more so from any actual profit earned by the scheme.

When the well of subsequent investors dries up the scheme collapses in a sea of bad debt where the investments of those last in pay for the payouts to those first in and first out. Those last in get nothing.

The current state pension scheme where former contributors, now pensioners, did not pay in enough and the contributions of current taxpayers are required to pay for the pensions of former contributors now pensioners, is just such a scheme.

With almost 15% unemployment, the well of current contributors (tax payers) has shrunk to unsustainable levels and but for the fact that the Government can require current and future tax payers to keep making increased contributions, this State Pension Ponzi scheme would have collapsed quite some time ago.

In such a scenario there is every justification for collapsing the scheme or at very least reducing current pensions to the level of payments justified by current pensioner’s own contributions.

All State pensions should be reduced to a basic pension only and the tax incentive to invest in top-up pensions should be at a standard rate of 15-20% for all.

Kevin T Finn

Muntervary

Kingston Close

Mitchelstown

Co Cork