[myrmidon]

You need to pay taxes and have kids for the numbers to work out.

If your pension benefits are calculated based on a 4 workers/retiree ratio, but then your whole generation has like 1 kid per family then the system will obviously break down...

[triceratops]

But why? That would imply a worker 30 years ago produces only as much as a worker today. Which is obviously untrue.

[myrmidon]

No, it would only imply that the worker/retiree income ratio (and tax/pension burden) are somewhat constant which is arguably the case; german pensions specifically rise with wages and get adjusted for inflation.

Productivity gains on the other hand get easily eaten up by increased consumption/expectations, or are overstated to begin with: producing 5 times more TVs/ipads does not make the plumber cheaper (nor a house), and unaffected professions actually suffer (=> baumol effect).

[triceratops]

> german pensions specifically rise with wages

Is that because higher earners make higher contributions to the pension plan?

[myrmidon]

No, it is because pensions are scaled (yearly) proportionally to wages (simplified, the actual process is more complicated)

[triceratops]

People automatically get a higher pension because they make more money? Without actually paying more into the system? That's an obviously flawed and unfair system, bound to fall over no matter what.

[myrmidon]

Working people collect points each year based on their income relative to the average (this is proportional to how much they pay).

Retirees then get paid based on how many points they have.

Both the worth and the "cost" of those points scales with average income every year.

This basically autocompensates for inflation and rising wage levels, but decreases in population size are problematic.

[SkiFire13]

As I said, this is how the economics of pensions work.

But the social contract does not care about that.