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Whether Governments In Developed Countries Should Essay

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QUESTION: Governments in developed countries should continue to make a major contribution to the pensions of their citizens. How far do you agree with this statement?

Contents

1. Introduction ........................................................................................ 2

2. Where do pensions come from? ................................................... 2

3. Four main problems faced by government ................................. 3

4. Reasons for ‘cuts’ and no ‘cuts’ .................................................... 4 4.1 Life expectancy and dependency ratio ........................................ 4 4.2 Recoveries from financial crisis ................................................... 4 4.3 Government’s obligation.............................................................. 5

5. Recommendations with evaluations ............................................ 5 5.1 Saving more now ........................................................................ 6 5.2 Increasing retirement age............................................................ 6 5.3 Shifting from DB to DC ................................................................ 7

6. Conclusion ......................................................................................... 7

7. Bibliography ....................................................................................... 8

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1. Introduction

With the increasing average life expectancies in developed countries, pensions — which afford people a decent standard of living by offering access to an adequate amount of monthly money during retirement — have become one of the biggest social concerns in recent decades. It has been a common belief that government should have the ability to offer the bulk of pensions in order to maintain a good health of its aging citizens and thus a society with stability, which is seen as a symbol of prosperous nations. However, confronted with increasing financial difficulties, governments in most developed countries have tended to cut state pensions. Although state pensions play a pivotal role in the pension system as a whole, it seems that state pension cuts would probably be the most realistic and practical way to address these problems. This essay will briefly outline the sources of pensions in developed countries, and will analyse several related problems. It will then put forward reasons for cutting state pensions, and will also inclu...

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