Indeed it does, but only at the cost of subjecting current and future retirees to a far greater risk--the risk of living until the Ponzi scheme of pay-as-you-go pensions begins to break down.
Leading the way was Chile, which in 1981 moved to phase out its pay-as-you-go system and replace it with privately owned individual retirement accounts.
* It is scalable, providing capacity on demand in a pay-as-you-go model.
"The processing, the storage, the applications, the systems management, security, load-balancing -- all of it -- can be provided over the Net as a service." Gerstner also promised that IBM would focus on this new utility model, delivering software, server time and data storage to customers on a pay-as-you-go basis, like power from a socket.
First-year expense under the ED was compared to pay-as-you-go
expense for the field test companies.
pension systems in Europe are being blamed in advance for a potential financial crisis that some industry experts believe will be brought on by the behavior of special-interest groups and politicians.
retirment systems in every country are heading toward total disaster," says Michael Tanner of the CATO Institute.
And over time, as economist Martin Feldstein notes, privatization would gradually transform Social Security from an unfunded, pay-as-you-go
system to a fully funded pension with real assets instead of promises.
Even a company that has no portfolio investments could borrow the necessary contributions (instead of "borrowing" from executives, as it does under the pay-as-you-go
One option is to continue the pay-as-you-go
(cash basis) and terminal accrual (accrue at retirement) approaches would no longer be acceptable.