Tuesday, January 28, 2014

On a seventy-foot yacht

Sometimes I fret about the world my granddaughters will live in. Of course they’re only young yet, and one or both may work and live in foreign countries, like their father and I have done. But wherever they live, it might not be as comfortable for them as the world Linda and I have lived in, and I wonder how they’ll cope. Will they find work easily? Will they find what health-care they need? Will they have pensions to look forward to in their old age?

They are Norwegians, and Norway has a huge “sovereign fund” that can be called on in tough times. But will it be enough? Several European nations have already reduced their state pensions, or have stolen money from private pension funds; and several US cities have already stolen money from their former employees’ trust funds.

Over-borrowing by greedy politicians has screwed everybody. Will my girls be able to find work at all? Economic commentators tell us that the whole world economy is entering a long depression, in which employment opportunities will be severely limited. High rates of inflation may destroy the value of all paper currencies. What then?

Linda and I have never worked in any one country for long enough to acquire government pension rights, and have never been forced to pay into company pension schemes. So now, we have no pensions at all. However, we also haven’t paid Income Tax since we left Canada in 1967, and working in offshore tax-havens has allowed us to salt our savings away. In effect, we financed our own pension fund, and are drawing on it now, in our retirement. (Note to self: persuade the granddaughters to find jobs in offshore tax- havens.)

The most diligent of plans and hopes will never get it 100% right, though. I recall reading a comment made by some English woman in a newspaper interview, about how she and her husband had been forced to pull in their horns financially, after they both stopped working. “He always dreamt of spending his old age on a seventy-foot yacht with a seventeen-year-old companion,” she said. “Instead, the poor old chap has had to settle for a seventeen-foot boat with a seventy-year-old companion. Hah!”

Here’s a story from fifty years ago, from my time as an auditor with Touche Ross in London... Half a dozen of us young auditors, all in our middle twenties, were standing around the office one day during elevenses, drinking coffee. I was the sole expat, and a newbie, being lauded for my reckless bravery in having struck out on my own to see the world. It was embarrassing.

“We could never do that”, one of the group said; “the company would never give us our jobs back.” “Never mind: there are plenty of other jobs”, I said. “I might not get my job back, when I get home.” “That’s all right for you”, he said: “but we’d lose all our pension rights!” They all paled at the thought.

I had no answer to that. English pensions weren’t portable in those days, and changing employers meant starting a pension programme on the bottom rung again, and walking away from however much had been paid into the old scheme. (Australia didn’t have compulsory pensions.)

Back in our Earls Court flat, my fellow wastrels and I marvelled that a bunch of 24-year-olds would worry about benefits that lay forty years and more into the future. Ah well... I wonder if those chaps today are receiving their full entitlements to their promised pensions. I wonder if any of them are spending their retirement living on a seventy-foot yacht, with or without a seventeen-year-old companion.