Pension funds | The Economist

Pension funds | The Economist:

"

A pension is a claim on the earnings of future workers. Some countries choose to pay these claims out of future taxes; others set up special funds to invest in financial assets. But these assets (equities, bonds and property) will be able to pay pensions only because future workers generate the income to make them valuable. So it is not necessarily disastrous for France and Greece that they have barely any pension-fund assets, whereas the Netherlands and Switzerland have accumulated funds worth more than their GDP. Still, pension funds may make matters plainer: Dutch and Swiss workers have clear claims to the assets, but French and Greek workers have to rely on the promises of politicians."

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