• Knock_Knock_Lemmy_In@lemmy.world
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    2 days ago

    This is a fundamental misunderstanding of how these funds work.

    This misunderstanding is on your side. There is a method of funding pensions refered to as pay as you go (PAYG).

    The goal is not to pay people with the money from new people paying into the pot.

    This is exactly how many unfunded, state sponsored pension schemes function. No pot of money exists. Only the ability to collect taxes.

    They invest the money and then the pot grows and that money is used to pay out.

    This is true for private pension schemes run by companies and individual pension schemes. Funded pension schemes are (usually) not ponzis.

    • LandedGentry@lemmy.zip
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      2 days ago

      State pension plans are primarily funded (in order of what comprises the most) by 1) the government 2) investments and 3) employee contributions.

      Pay as you go is about employee contributions, which is typically the smallest pot being contributed. I don’t think you know what you’re talking about.