1/5
Pension funds & financial institutions are complicit in a lot of the rot but certainly not the cause of it. 2008 the gdp went as low $5bn. If GDP recovered to $15bn. It means new member contributions are way higher than old contributions. New members have bigger piece of pie
Pension funds & financial institutions are complicit in a lot of the rot but certainly not the cause of it. 2008 the gdp went as low $5bn. If GDP recovered to $15bn. It means new member contributions are way higher than old contributions. New members have bigger piece of pie
https://twitter.com/pacheduzw/status/1418602208262770691
2/5
This is because pension funds are a pyramid scheme. Nothing unique to Zim but worldwide. They rely on new members & new contributions to sustain them. It’s a huge problem in the UK. The US is different because of 401k. The individual has greater say in investing.
This is because pension funds are a pyramid scheme. Nothing unique to Zim but worldwide. They rely on new members & new contributions to sustain them. It’s a huge problem in the UK. The US is different because of 401k. The individual has greater say in investing.
3/5 In other words. Most pension funds around the world have not kept pace with inflation. Pension funds invest in property, stocks & bonds. They’re forced to take up bonds which yield negative returns. In Zim it’s prescribed assets. Which never yield positive returns.
4/5
So a member that joined say in 1960 paying real money. Inflation wipes away their savings. And only new members in 2021, contributing real present dollars can pay the retiree. The investments have underperformed inflation. Imagine were there is hyperinflation?
So a member that joined say in 1960 paying real money. Inflation wipes away their savings. And only new members in 2021, contributing real present dollars can pay the retiree. The investments have underperformed inflation. Imagine were there is hyperinflation?
5/5
While internationally the problem is a bulging,aging population with a contracting youth base esp in Japan. In Africa esp Zim it’s youth unemployment. In both cases pensioners will never maintain the same lifestyle after retiring. Hyperinflation just exposed quickly the skew!
While internationally the problem is a bulging,aging population with a contracting youth base esp in Japan. In Africa esp Zim it’s youth unemployment. In both cases pensioners will never maintain the same lifestyle after retiring. Hyperinflation just exposed quickly the skew!
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