The largest 300 Pension Funds collectively hold about $18 trillion (12 zeros) worth of assets. The idea of a retirement fund has taken root. That you can build capital to put to work on your behalf when you no longer can. Many Retirements Schemes started life as Defined Benefit Pension Plans (DB). This means the payment was a promise from the container the retiree was part of (employer/sponsor). The amount of the promise depended on formulas based on length of service, final salary, and age (for example) rather than on investment returns. Many were funded Pay-As-You-Go (PAYG) with those currently working effectively paying those who retired directly. PAYG is fragile with a constant balance between contributors and beneficiaries. There has been a big shift to Defined Contribution (DC) where individual accounts are set up. Where the amount paid depends on the Capital built over the working life. There are lessons to be learnt in figuring out how Universal Basic Income can be funded. How do we build the assets to support strong, flexible, foundations?
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