Global Pension Crisis

“Then the sixth angel poured out his bowl on the great river Euphrates, and its water was dried up, so that the way of the kings from the east might be prepared” (Revelation 16:12 NKJ).

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Seven years of record-low interest rates has severely damaged the financial health of the world’s pension funds. In the U.S., the 1,500 companies that make up the Standard & Poor’s stock index have pension funds that, in the aggregate, are underfunded by some $560 billion. US state and municipal retirement funds are deep in debt, with deficits estimated at $3.4 trillion. In Illinois alone, the interest on pension debt is $9.1 billion annually. That state’s total unfunded liability (amount owed for benefits not covered by current assets) approaches $130 billion.

In the UK, that country’s largest 350 companies have pension assets equivalent to $950 billion, but payment obligations totaling $1.5 trillion. Of the country’s 5,945 pension schemes, 5,020 show significant deficits. The UK Pension Protection Fund, created to bail out the schemes if they fail, says the aggregate deficit is equal to $538 billion, but outside experts say it is twice as large. In the US, the equivalent Pension Benefit Guaranty Corporation (PBGC) had a total deficit of $76.4 billion. PBGC’s programs have been on the Government Accountability Office’s (GAO’s) list of high-risk government programs since 2003. PBGC’s projections expect slight improvement in some plans, but the overall position is expected to worsen considerably over the next 10 years.

In France, government pension liabilities amount to 3.5 times the country’s Gross Domestic Product (GDP). In Germany they are over 3.2 times the GDP. Australia is a rare case — liabilities are just 10 percent of GDP. In Hong Kong, investment returns on pension funds have been negative for five of the last 15 years.

On average, Brazil spends 50 percent more on pensions than other developed countries as a share of GDP, despite having half as many over-65s as a share of the population. Since the mid-20th century, Brazil has experienced a decline in fertility rates leading to a reduction in population growth. It is estimated that Brazil’s elderly group will form a growing portion of the country’s population where over-65s currently account for just over eight percent of inhabitants. Projections are that by 2050, the over-65s will make up one-fourth of the population, which could lead to problems meeting pension obligations (now 12 percent of GDP) as well as putting a strain on health services. In Rio de Janeiro, more pensioners are supported by the state than there are civil servants. For every police colonel on active duty, five are retired, putting Rio in the greatest danger of bankruptcy.

Rapidly aging populations across the world are radically altering the balance between those who work and those in retirement. In 1950, the world’s richest economies had only 10 percent of their population in the 65 and older age group; today, they account for 25 percent, and by 2050 they will account for one-half of the population. This crisis faces the privileged part of the world. Across the developing world, billions of people do not have the luxury of a pension.

Improvement Unlikely

The first known pension scheme appeared in Germany in 1883, when Count Otto von Bismarck set the pensionable age at 70, and average life expectancy was just 64. Most people died before they could draw a benefit, so funding was not a major issue. Today in Hong Kong (the world’s most long-lived society), a man who retires at age 65 can expect to live at least 16 more years, and his wife a further 22 years. During the last US administration, the amount owed by states to fund the pension plans of all public worker retirement systems went from $650 billion to $1.3 trillion. Additionally, in the last year of the administration, the president encouraged the states to start operating new retirement systems for private-sector workers who lacked pensions, enrolling them automatically into existing plans. As a result, almost all state budgets have piled up pension-related debts totaling several trillion dollars as assumed earnings on the plans have been unrealized. State budgets in 2017 project one-quarter of all disbursements will go toward pension obligations. Around the world, pension assets have never been as stretched as today, and the prospect of longer lives continues.

Only Jehovah Provides Security

Except for those who die young, everyone faces the uncertainties of growing old. Currently, the major concern for the world’s aging population is whether there will be adequate funds for health and retirement. With each new financial crisis, this concern grows.

The Bible predicts that financial burdens will be prominent among the reasons for the collapse of the world’s governments at the end of the Gospel harvest. “Before these days there were no wages for man nor any hire for beast; There was no peace from the enemy for whoever went out or came in; For I set all men, everyone, against his neighbor” (Zechariah 8:10 NKJ). As today’s financial crises become more regular, countries and populations face losing the ability to meet both current and long-term obligations. As evidenced in countries such as Greece and Brazil, confidence yields to revolution and sometimes anarchy.

Unknown to most, throughout the 6000 years since Adam transgressed the divine law, God has been executing a long term plan for humanity that will not be like the broken promises of politicians and the advancement of social agendas. God’s purpose is to deliver mankind from the sentence of death and provide them reconciliation, security, and everlasting life.

The only permanent solution to the overwhelming problems facing humanity lies in God’s plan, revealed in the promises of His Word. He will replace the current system based on selfishness with a system based on unselfishness. For 6000 years man has inherited the penalty of death because of disobedience to the laws of God and original sin in the Garden of Eden (Genesis 3:17). God promises that every resurrected human will be given an opportunity to learn the ways of the Lord and, if obedient, receive everlasting life on a perfected earth. God “is gracious unto him, and saith, Deliver him from going down to the pit: I have found a ransom. His flesh shall be fresher than a child’s: he shall return to the days of his youth” (Job 33:24, 25).

These words speak of a future time when righteousness and Truth will prevail on earth and mankind will witness the benefits of God’s kingdom. The oppressed will be set free from sin, death, and the dying process as well as earthly tyrants and taskmasters. Isaiah speaks of the blessings available to mankind in Christ’s future kingdom through the example of the nation of Israel. “Then your light will break out like the dawn, and your recovery will speedily spring forth; and your righteousness will go before you… you will call, and the LORD will answer” (Isaiah 58:8, 9 NASB). When Israel follows the requirements of the kingdom, it will be an example to the nations. When the ransom is applied to mankind, it will release them from Adamic condemnation. “The inhabitant will not say, ‘I am sick:’ The people who dwell in it will be forgiven their iniquity” (Isaiah 33:24 NKJ).

Disobedience will be restrained then. Humanity will learn truth and righteousness, and receive the wonderful gift of life on a perfected earth by following those righteous ways and displaying unselfishness and love for their fellow human beings.

Revelation says, “He shewed me a pure river of water of life, clear as crystal, proceeding out of the throne of God and of the Lamb. In the midst of the street of it, and on either side of the river, was there the tree of life … the leaves of the tree were for the healing of the nations” (Revelation 22:1,2). The curse, instituted because of disobedience to God, will be removed by the Christ, “There shall be no more curse … the throne of God and of the Lamb shall be in it” (verse 3). In that Day, none will worry about their ability to care for themselves. God’s plan will provide all the security they will ever need!