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Proposal for a sustainable elderly pension system

  Personal statement: It would not be good manners and it would not be fair toward society to receive the financial support from society as...

 Personal statement: It would not be good manners and it would not be fair toward society to receive the financial support from society as an elderly as long as I have sufficient personal resources to support myself financially. It would be necessary to make this individual approach, this civil attitude, socially acceptable and generally followed.

The majority of current social pension systems, based on tagged taxation of the active population, which provide support to the elderly are almost universally facing significant financial imbalances and/or cost-of-living difficulties concerning the elderly population. The most important cause of these difficulties is the decline in the size of the working-age population, but there is also the legal or illegal minimization of taxable income. 

Beside to the socially sustained public pension, there is private pension providing a pension-like support for the elderly, but based on accumulated personal wealth of private long-term savings. Many pension systems are moving away from the social pension towards the private pension because of the difficulties of the social pension system. However, this shift does not solve the problem of the care of old age population, because the private pension is based on accumulated wealth, which create significant social divisions in old age population, cause differences in living standards, and lead to social justice tensions.

Because of the above problems, the pension system discussed and proposed in this thought addresses the reform and suggest a solution of the financial care of the elderly by the society. 

Definition: Social pension: the social sacrifice of financial support for elderly people who, because of their age, are no longer able to live a self-sustained life. 

According to this definition, a person who, after a defined age, does not have sufficient financial resources to live a self-financed life becomes entitled to the social pension. 

According to this interpretation, an elderly person who has the financial resources necessary for self-support is not entitled to a social pension. 

Based on these descriptions, the structure of a socially sustainable pension system is as follows:

- The active, non-pension-aged members of society are obliged to participate in society's efforts to support the elderly by setting up a social pension fund from a certain proportion of their income, as decided and specified by society. (While preserving private pension savings and retaining their state benefits.)

- All persons of pensionable age receive regularly the same amount of pension depending on the actual size of the social pension fund throughout their lifetime. The social pension is credited monthly on a cumulative basis from the social pension fund to the person's pension sub-account, which is separate but still administered by the social pension fund. 

- An elderly member of society becomes entitled to a pension payment from the person’s social pension sub-account if he or she does not have the resources for self-support (if he or she has a verifiable lack of sufficient income and has run out of savings). 

- A person of retirement age with insufficient resources for self-support is paid a weekly pension life allowance corresponding to the (accumulated) amount in the personal social pension sub-account. The weekly paid life allowance is calculated on the basis of statistically estimated life expectancy. 

- The unused deposit on a personal social pension account cannot be inherited after decease, it goes back into the social pension fund. 

With this community pension structure, society is able to provide care for its elderly members in an efficient (without wasting resources), sustainable (balancing expenditure and income), and socially just way.

The proposed pension system is a communal responsibility of society, a collective social activity, which can only be successfully operated if the members of society participate responsibly in maintaining the social pension system by respecting the rules. The proposed social pension system can operate efficiently and effectively and ensure a high standard of living for the elderly in societies, where a high level of social responsibility is a common feature. The proposed social pension system should operate on a non-profit basis, separate from the government budget, and function under civil control.

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