Friday, August 2, 2013

Public sector pensions - Generous world wide!

I was somewhat surprised by The Unsteady State of America which I read in the Indian Express. The surprise was that the generous pension which various Indian governments had been offering their employees was not all that unique. (Realistically, it is the government employees who are taking care of themselves.) Even US public sector had been offering pension based on the number of years of service and the last drawn salary!

Governments seem to have been remarkably ignorant of the life expectancy of their people or the financial implications of the long life span.

Government of India tried to offer the same pension option for even private sector employees(mandatory). I wonder what led them to implement it with an absurd limit of Rs. 6500 per month (less than US $ 110 per month) rather than scrap it. My unhappiness with the pension scheme is because all it seems to do is increase the size of bureaucracy while hurting the interests of the "organized sector" employees and doing nothing at all for the informal sector employees.

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