Exactly the right situation analysis!
The YEL problem is not in the collectible premium level, but in the lack of funding. All actions without funding are just kicking the can down the road.
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Entrepreneurs should only be required to pay YEL (Entrepreneurs’ Pension Act) contributions up to the amount sufficient for a guarantee pension. The state covers the losses of the current system. Each entrepreneur would then build their own personal pension program on top of this, using pension insurance or other investments.
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TyELs should also be taken into account. When TyEL and YEL (and possible MyEL) together are at the level of the basic pension, their accumulation should be able to be stopped. Regardless of whether you were in paid employment, an agricultural entrepreneur, or covered by YEL. Voluntarily, anyone who wishes could pay them.
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So, should funding be added to the payment level without affecting it?
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I am not familiar with entrepreneurs’ income generation, so I cannot propose a suitable and reasonable funding method for the capitalization of YEL funds. Therefore, I did not propose one either.
I am familiar enough with the principles of long-term saving that I clearly expressed my stance in favor of capitalization, utilizing the compound interest phenomenon. Do you disagree with this principle?
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Funding would help, but if the payment level is not touched, it would mean that additional money would have to be found from the state’s coffers at the same time as the state would want to reduce its contribution at the expense of entrepreneurs.
If you were an entrepreneur, would you want to pay a lot or a little money into a system from which you would receive a pension sometime in the future, if you live that long. Of course, disability pensions are also paid. At the same time, however, you know that not a single penny is saved, meaning that when you retire, that money will again have to be dug out from the entrepreneurs and the state at that time. It only takes one political decision in a tight spot for those “pension savings” to be radically cut.
A stalemate, pure and simple.
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Okay, sorry, I thought you were commenting on the current state of the system.
I agree with you that the best solution would be to build a time machine and have pensions be based more heavily on actual existing savings and investment returns, and not just the eternal “next generation pays more” cowardice.
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