The Vision
To know that future generations will be able to enjoy a real, stable and sustainable economy. To know that every individual in a democratic country would be able to acquire the skills and tools needed for life and to find employment appropriate for his/her abilities and needs. To know that every individual will be receiving a ‘living wage’ pension for the rest of their natural life.
The Dangers En Route
· Violent struggles between the generations: The ratio of pensioners to the people at work has risen and will continue to rise dramatically. Workers will refuse to pay the health care and living costs of future pensioners
· Most people at work will struggle to finance their own monthly pension contributions, their own living costs, the general expenditure of the state and the cost of funding pensions for past generations: Everyone will be ‘weighted down’ by heavy debt
· Most governments (democratic) will drown in a sea of annual and cumulative deficits. This is a process which has an end: It is a grave danger to the survival of democracy (e.g. Greece, Ireland, Portugal, etc.)
· The current market forces economic model seems to favour and reward speculative short-term activity rather than constructive and productive economic management for the long term. Massive short-term speculative frenzy delivers violent swings in the economy, damages productivity, reduces overall economic creativity and threatens the security of the citizenship, society and the world. (Example: The collapse of the global banking system in 2008 and the difficult state of the global economy since – even gold has broken the $ 1500 per ounce mark!)
Are There Possible Solutions? The Vision
In the fullness of time to solve both the challenge of funding the cost of providing a reasonable pension for every individual in the nation (at relatively low cost) and create a new economic model able to combine the powers of a market forces economy with a national economic structure which is much more productive, much more stable and much more democratic in the way that national wealth cascades through society.
The Ten Pillars Program
1. Every child born in the nation will be the beneficiary of a new pension account. During the birth month the state will deposit in this pension account an agreed amount. These funds will be invested in productive economic activity by a new type of long-term investment organisation to be established (The Super Trusts – Pillar No.9). Half of a new tax financing the pension grant will be paid by each household (the poorest excepted) and half by all employers. The total annual cost is expected to be about half a percent of annual GDP. Female children will receive a higher grant and so will children of the poor (estimated at 20% of births).
2. Family and friends will have the opportunity to contribute to the pension account of the baby according to their ability (even small amounts will grow into valuable sums over the 70 years to retirement).
3. Family and friends could continue to make occasional contributions over the years.
4. Every working individual will be obliged to be member of a recognised pension scheme throughout their working life and contribute a minimum percentage of their income every single month.
5. Every employer will be obliged to contribute monthly a minimum percentage of each employee’s salary to a recognised pension scheme (as nominated by the employee).
6. Every young employee will be entitled to receive an additional contribution to his/her pension scheme if and when the total of the monthly contributions made by both employee and employer do not add up to a minimum annual amount. This payment will be made by the state and financed from the same tax used to finance the grant at birth. This added contribution will not exceed seven years, paid only when the total contributions fall short of an agreed amount and not later than age thirty: The idea is to benefit from the impact of long-term investment growth.
7. The tax system will encourage the individual to make additional contributions to her/his pension scheme when surplus funds are available.
8. The state will allow family members to transfer financial assets to the pension scheme of the child in order to increase its ultimate value. These transfers will be limited in order not to damage the pension plans of respective family members or to constitute a tax avoidance scheme.
9. A new type of long-term investment organisation will manage all pension funds provided by the state. These organisations (the Super Trusts) will not be managed by the state, will not be controlled by the state and will not be managed by existing pension trusts. Existing pension schemes extract high fees and invest mostly in government bonds and various stock markets. (This existing system does not provide pensioners with adequate and secure returns or significant capital growth).
The Super Trusts will invest and re-invest the pension funds directly in the economy by acquiring, establishing, managing and growing productive economic entities. All funds will be invested for the long-term with the aim to achieve a minimum of 5% per annum net compounded growth. The plan is to start paying pensions age 70. (The system allows early retirement subject to strict health criteria).
10. MaxiLife – This is a visionary computer program designed to offer the individual (and thereby society) a better life and better future. The MaxiLife concept proposes that the program (when available) will accompany each individual from the moment a toddler can start to touch a screen or play with a keyboard. MaxiLife will learn the individual traits and needs of each participating person and will support her/him loyally and discreetly as their ‘virtual advisor’ for life. This close cooperation between man and machine will allow the individual and society to extract much more value from our unique individual capacity to create, build, contribute, progress and simply be.
The Expected Outcome? A More Secure Future
· ‘Smaller government’ – less taxes, less politics in the economy. (States without vast deficits)
· Excellent pensions provided at a much reduced life time cost
· Everyone has a ‘living wage’ pension
· A new economic model much less exposed to the constant ‘boom – bust’ cycles of the financial markets
· A productive economy where speculation plays a much reduced role
· Less unemployment, less ‘entitlement payments’, fewer individuals living at the cost of the state
· The enterprises owned by the Super Trusts (Pillar No.9) are expected to be enlightened employers ready to invest in the skill set of their work force for long-term value
· Every individual will have a much greater opportunity to progress in life (taking advantage of their innate talents and abilities)
· The ‘generations wars’ will not materialise: On the contrary, the young will be employed and in the fullness of time pensioners will use their good income to buy goods and services, thereby providing employment to the young and mature workers
· ‘Class wars’ will not materialise: A greater national wealth will cascade down into society in a natural way and not through a draconian tax system (to achieve redistribution or even retribution!)
