Snippets from > Growing old before growing rich, by Andrew Sheng

Snippets from > Growing old before growing rich, by Andrew Sheng

As Tennessee Williams said, “you can be young without money, but you can’t be old without it.”

• There is a major difference between being old in Asia and being old in the advanced countries. In 2011, private pension funds in nine Asian economies had assets of US$663bil or only 5.3% of GDP in 2011, way below the OECD average of 70% of GDP.
• In the past, when families were large, the young were the “pensions” of the old, because it was taken for granted that the young will take care of the old. Today, when many urban families have only one or two children, this dream is no longer possible.
• the reverse is happening. In Japan, single children in their twenties who still live with their parents are called Parasite single (parasaito shinguru). A single Chinese child today is showered with gifts and love from six adults (four grandparents and two parents). But when he or she becomes an adult, one cannot take care of at least four to six old ones.
• The lack of pension coverage or under-funding of pensions is a serious problem in Asia. low interest means that many pensioners face a problem of lack of income from their financial assets for adequate retirement purposes.
• There are several good reasons why governments should reform pensions as a matter of priority. Firstly, there is a question of adequacy of retirement income. Secondly, to be fair, more people should have pension coverage. Third, pension funding should be sustainable, because as Greece found out, there was simply not enough money to cover the generous pensions for civil servants.
• More pensions for more people will make for a more equitable society, which means that long-term pension funds can take long-term equity positions that invest in future green growth.