Tuesday, November 15, 2011

How many public pension schemes are there?

Today we can read in the Portuguese news that the military pension fund is being saved by a 6.5 million euro  payment from the government, that will keep it afloat until the end of the year.  That is good, I suppose, otherwise the retired military personal would stop receiving money.

6.5 million is a refreshingly small number.  Usually the debts are listed in billions.

But it does bother me quite a bit.  How many public pension funds are there?  I thought everybody was in the big one belonging to social security.  A few weeks ago the news were about the bankers pension fund being merged with the social security.  Now we hear about the military pension fund?!

Is there a special fund for politicians as well?  I would not be surprised.  If so, there should be one for baker's apprentices as well.

May I suggest one and one only public pension fund?  To save money?  To be fair?  To get rid of some bureaucracy.  Portugal is a small country and there are modern technologies.  It no longer makes economic sense to have the same basic bureaucratic organization repeated several times over.

Also from a point of fairness and cohesion, stop giving groups special privileges.

The military is one of the good examples of a candidate for more for efficiency.  There are three "estados-maior", military commands.  One each for the army, air force and the navy.  On top of that there is a "supreme estado-maior", military command for all three.  There is a also a separate health service for military personal and family members with own hospitals.   There is a separate military police for each branch of the armed forces and the military has a separate pension fund.

I was for a short time military myself and I have immense sympathy for armed forces and consider them a necessity of free society, not to speak of treaty obligations.  But I would like to see an efficient military.  Let us look at another number.  There are 132 generals in "the active" in Portugal.  United States, the only super power, has around 870.  I will let the reader calculate how many generals the US would have following the Portuguese standard (estimated active personal armed forces US: 1.4+ million, Portugal: 45000).  I have one question though: Who sweeps the floors of the officer clubs in Portugal?  Majors/Commanders?   This is however, not a Portuguese only problem.  Many countries now have a ratio of 5 or less enlisted per officer.

It does not sound very efficient - does it?

What about, for starters, one military command, one military police, pensions through social security and health treatment through the public hospitals.  A smaller military health structure, a field hospital, could be kept for UN or NATO deployments.  All this would permit more soldiering, less administration, and it would show that the armed forces are an integral part of society and also understand times of austerity.  Looking for goodwill?

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