Free Eco Weekend
This health crisis will have led to inflating the public debt at a speed unmatched since the post-war period. It will also have further weakened our public pay-as-you-go pension scheme. It is the duty of any somewhat responsible citizen to think about a supplement for his retirement, especially since the interest collected on the 300 billion euros of precautionary savings does not bring enough income to compensate for inflation. Keeping your capital in a savings account is the certainty of getting poorer.
One of the OECD recommendations with regard to Belgium is to encourage its population to build up additional pension income. There are pension savings products offered by insurers, but management fees are very high relative to expected returns, which are not always guaranteed or fiscally attractive, or even both.
An origin that dates back to the 17th century
There is another under-exploited avenue, that of collective savings associations, whose origins date back to the 17th century in Italy, France and Portugal, notably under the influence of Nicolas Bourey, originally from Antwerp. In the 19th century, insurance annuities very frequently came from these associations.
Their principle is very simple. Each member of the association invests the desired amount in an investment fund in order to build up a supplementary pension, ideally in the form of a monthly pension. The proceeds of this fund are redistributed to members upon retirement provided they are alive, as is the case with statutory state pensions.
The annuity paid is not necessarily fixed once and for all; it may increase with age if you live longer than other members, which may help cover higher-than-expected health care costs. This is crucial, because the risk of longevity is very often underestimated by the population. For many people, and not only in the most disadvantaged segments of the population, legal retirement will be insufficient to enjoy their fourth “youth” while avoiding dependence on those close to them.
Solidarity within the association is also strong and fair; it does not mortgage the future of its members, nor that of the younger generations, who will undoubtedly have to undergo a painful reform of pension plans one day or another. And logically, people who live long receive more than those who die earlier, as is the case with statutory retirement. The amounts invested always remain the full property of the members and no external party should be compensated in addition, apart from any investment costs, because the risk sharing is done directly between the members. This avoids the costs that insurers often have to charge due to their regulations, the use of very conservative mortality tables, and their administrative structure.
Socially responsible fund
The contribution of each member to the development of the economic and social fabric is also more direct. Instead of allowing banks to invest their savings that earn nothing in their account without knowing where it goes, members choose to directly invest their capital in funds that can be socially responsible, aimed at reconciling economic performance and social responsibility. and environmental. Members thus contribute to a productive and personalized use of their capital, while minimizing costs and defending their personal interests.
Without seeking to blame anyone, the state management of this health crisis will have been a calamity. To fill the gaps in the welfare state, let’s quickly set up collective savings associations to take charge of our supplementary pension.
–
