Pensions

The purpose of the state pension regime in the UK is to ensure a basic pension to those who have paid reasonable contributions (via national insurance taxation) during their work life. It is essentially a system that attempts to ensure a subsistence income after retirement. The regime is an opt-out system: workers can decide to leave the state pension regime and receive a rebate on national insurance contributions. The current rebate, however, in not enough to incentivise significant numbers of workers to leave the state pension and look for alternative pension funds. Anticipating the pension age increase not only is just a palliative solution to a systemic problem of the pension regime, but it also unfair.

With the Scottish referendum around the corner and other ones looming on the horizon, IREF investigates the accounts of states thinking about a divorce. What are assets and liabilities to be split? Is the currency such asset, for example?

A new IREF Policy Paper by Senior Fellow Alexander Fink analyses the colourful patchwork of various private pension schemes the government has created, and compares their inflexibility and other disadvantages to the US system. A “single pot” which would enjoy some of the currently individualized incentives would be a much better idea for everyone in Germany. And it may even contribute towards social justice.

Summer temperatures bring new wave of strikes to France (not that they’re seasonal…). Two concurrent current strikes involve nudity. Fiscally, though, they have very different implications. It does not depend on what you do with your clothes, it depends on who is your employer.

A company is mismanaged when some indicators are in the red such as factory costs higher than those of its competitors; highly unprofitable activities; general and administrative costs much higher than those of its competitors; too many employees in too many locations; outstanding wages and incredible social benefits; various waste; assets sold at low prices and no return on investment; lack of reaction to badly needed reforms.

If the Banque de France’s 2012 financial statements are compared to those of the Bundesbank (German Central Bank), it can be argued that the Banque de France is very poorly managed.

The staff costs are higher at the Banque de France than in the Bundesbank! This is one of the conclusions of our comparative study “Banque de France vs Bundesbank”. On the one hand, 1.45 billion euros, in the other hand, 700 million euros! Regarding pension costs, the comparison also makes a significant difference: 440 million euros in France compare to the Bundesbank’s 100 million. With this precision: the Bank of France pensions are not funded …

Something is rotten in the European Union! It looks like a hide and seek game, where countries and banks are playing a very dangerous game for the citizens’ future. Thus, between political instabilities, stealthy defaults, unhealthy and reckless banks and a real estate market that is artificially boucing back, there are many concerns about the EU’s future.

Reforming is a path for reelection: German Chancellor Angela Merkel privatized, deregulated, capitalized. She did not reflate nor accepted deficits : she reduced taxes. For sure, there are some lessons to learn for France.

This is the translation of an op-ed published by Jean-Philippe Delsol on August 24th, 2013 in the leading French newspaper “Le Figaro”.

In France, during the last 30 years, social spending went from 21% to 33%. It is the sign of an ever growing Big Government that is out of control and unbearable. Thus, as German Chancellor Angela Merkel pointed out, Europe “gathers 7% of the world population, 20% of the production and 50% of social spending”, and France has the spending leadership. According to the OECD, 60% of France’s spending is made in the social sector, i-e 33% of its GDP whereas Germany is spending 26.2% of its GDP in the social sector, the United Kingdom 23.8% and the OCDE average is at 22.1%.

WP 2013-04. Executive Summary The critical situation of most state-pension schemes plays a key role in explaining the public-finance crises that characterize many West-European countries. Although most observers refrain from…