<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>notJim</author><text>In some sense, isn&amp;#x27;t this inherently how something like a pension fund works?&lt;p&gt;Forget about the layers of obfuscation, and think about how the economy works. Some people work and produce stuff, some people do not. The norm (and a defensible one, IMO) is that young people work, and old people do not. This means that some of the output of the work that young people do has to be funneled to old people.&lt;p&gt;You can do that by building up vast stores of wealth and funneling it to people over time, or you can do it by directly taxing current production, but either way the effect is to direct resources from people who produce to those who don&amp;#x27;t.&lt;p&gt;Theoretically, we take the store of wealth approach, but in actuality that store of wealth depends greatly on the economy backing it to be sufficiently productive that there are enough resources to go around. The pension funds don&amp;#x27;t control the entire economy obviously, so they have to predict as best as they can. It seems extreme to call it a Ponzi scheme unless there was actual fraud occurring.&lt;p&gt;Edit: thrustvectoring[1] probably does a better job making the point I&amp;#x27;m trying to make (or at least a related one.)&lt;p&gt;[1]: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;news.ycombinator.com&amp;#x2F;item?id=21174917&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;news.ycombinator.com&amp;#x2F;item?id=21174917&lt;/a&gt;</text><parent_chain><item><author>aazaa</author><text>&amp;gt; The warning comes as pension firms across Europe struggle to generate the returns they need to cover their growing obligations. In Denmark, some funds saddled with legacy policies guaranteeing returns as high as 4.5% have had to use equity to meet their obligations.&lt;p&gt;Using equity to meet current obligations sounds a lot like a Ponzi scheme:&lt;p&gt;&amp;gt; A Ponzi scheme ... is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.[2] The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Ponzi_scheme&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Ponzi_scheme&lt;/a&gt;&lt;p&gt;Provided that the equity drain is limited in scope, a pension fund can continue to fight another year.&lt;p&gt;The more interesting (or scary) question is what happens when tapping into the equity becomes the norm? At what point does the fund manager level with pensioners and inform them that the fund is in fact insolvent?</text></item></parent_chain></comment><story><title>World&apos;s Best-Run Pension Funds Say It&apos;s Time to Start Worrying</title><url>https://www.bloomberg.com/news/articles/2019-10-06/world-s-best-run-pension-funds-say-it-s-time-to-start-worrying</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>burmanm</author><text>Not sure why you were downvoted as technically you&amp;#x27;re not that far from the truth. Most pensions do work this way, next one pays the previous ones.&lt;p&gt;For example in Finland the pension funds were started with the employees back then paying 1,5% of their salary to get pension. These days the rate is ~24% from salary, yet the gains are the same as those with 1,5%.&lt;p&gt;The risk is that current payers won&amp;#x27;t get their pension if there&amp;#x27;s no one in the future funding the system. Personally, I think it&amp;#x27;s very likely that the current payers are getting screwed in the end (by getting their pension cut and those who never payed will keep receiving theirs until they die).</text><parent_chain><item><author>aazaa</author><text>&amp;gt; The warning comes as pension firms across Europe struggle to generate the returns they need to cover their growing obligations. In Denmark, some funds saddled with legacy policies guaranteeing returns as high as 4.5% have had to use equity to meet their obligations.&lt;p&gt;Using equity to meet current obligations sounds a lot like a Ponzi scheme:&lt;p&gt;&amp;gt; A Ponzi scheme ... is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.[2] The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Ponzi_scheme&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Ponzi_scheme&lt;/a&gt;&lt;p&gt;Provided that the equity drain is limited in scope, a pension fund can continue to fight another year.&lt;p&gt;The more interesting (or scary) question is what happens when tapping into the equity becomes the norm? At what point does the fund manager level with pensioners and inform them that the fund is in fact insolvent?</text></item></parent_chain></comment><story><title>World&apos;s Best-Run Pension Funds Say It&apos;s Time to Start Worrying</title><url>https://www.bloomberg.com/news/articles/2019-10-06/world-s-best-run-pension-funds-say-it-s-time-to-start-worrying</url></story>