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Pension: a Feudal concept; and very unfair



On Wed, 16 Sep 1998 bdp.india@mailexcite.com wrote:

> Utkarsh: Even in the US which has an elaborate Social security system is 
> not enough for living in old age. So the concept
> of Pension is a genuine and resonable. After all if one gives his/her life 
> for the institution, institution must give back.
> A pension contribution after 5 year of service is not out of the world to me.

Let me elaborate my claim of pensions being a feudal (antedeluvian)
concept. When you pension out someone you treat that person as a bonded
laborer in a serious way. 

Illustration: I have now, 16 years of seniority in the IAS.  I am very
unhappy with the way things work in India and I do not see either any need
of persons like me in the system nor any way that I can help improve
things from within. I want to quit! Not right now!! But I do get this
unbearable urge to puke when I see the kind of leaders I am supposed to
work "under." Many a foul word would be inadequate to describe the scum
that rule India (again, not all are of this category).

Now. Take a look at this feudal thing called pension and how terribly
unfair it is to people who have a mind of their own, or other reasons, to
quit a job.

Under the rules framed by you - the citizen of India - I have to be
'bonded' to the IAS for 20 years before I can start drawing a pension. In
other words, I am supposed to make one choice of a career in my whole life
and not think about other things. Close my mind forever. I am BONDED!

If I were to leave this job now, I would be in pretty serious financial
distress, and that too, in the middle of my life, when usually other
career options are closing down rapidly. I would neither have any
unemployment allowance, nor any pension, nor any social security benefit.
On the streets! Boot out those who don't like to be bonded and
subservient!! Nothing to show for the massive number of "overtime" hours I
put into my job, not sleeping many a night at all, defending law and order
for you, the citizen, creating development schemes for you. I would simply
be thrown on the streets!

Take instead the system I am proposing: Social security benefits. Whatever
the ratio fixed, let there be some ratio, say 15% of the salary drawn.
That money must be paid OVER AND ABOVE by the employer into my social
security account. Therefore for the 14 years of actual paid service that I
performed in the IAS, I would have accumulated at least some money which
would help me in case I need to change my career midstream. I could then
do what I do best. Whatever that be.

If everyone does whatever they do best, what do we have? Efficiency.
Social Mobility. People changing careers midstream, constantly learning
new things. The country gains.

Block all this by enforcing a 20 year service-minimum rule on receipt of
pension and what have you? Everyone is completely scared of changing
careers. People hang on to their job even though they don't like either
the job or their bosses. Nobody works sincerely. Everyone is working for
that miraculous "pension." Who suffers? The country suffers.

Would you rather have 40% turnover in the IAS with people leaving for jobs
which they can do better, or would you have everyone compulsorily working
in the IAS simply because they happened to join it in a fit of
nationalistic idealism? At this point very few are actually leaving the
IAS precisely because they are hanging on for that mythical pension. Once
they do 20 years in the IAS they never leave because they are valueless
outside the service. Catch 22 situation. 

If you were to remove this pension business, I guarantee you that about
1/3 rd of the IAS officers would leave this job within the first 8 years.
Would not that be a better system? 

Utkarsh mentioned about the US social security system. I don't care about
the US social security system (by the way, I have about 100 pages of notes
that I made on this system over the course of six months, and I'll discuss
its weaknesses later, if need be). What I care for is that every employee
in every system, government or private, MUST be paid pension benefits
TODAY, the moment they work, and these pension/ unemployment insurance
benefits must be paid out to them irrespective of the number of years they
put into a job - into their Soc security accounts.

In other words, it would be immaterial whether a teacher worked on a
permanent tenure or a 3-year contract, AS FAR AS OLD AGE SECURITY is
concerned. 

However, as far as efficiency is concerned, the 3-year contract system
would be a million times more efficient. Therefore I hope my case against
a pension system and in favor of a fully funded social security system
(with some progressivity) is acceptable to all.

SS


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