If I was young and my pension fund was to invest in a bridge, I would want and need for it to lead to somewhere great!

Sir, John Authers with respect to future pensions holds that “if we have done our job properly, we should by now be scared out of our wits”, “There is still time to alter the script of the pensions crisis” August 27.

And just like in The Graduate Mr McGuire recommended Dustin Hoffman “plastics”, Authers recommends current kids “infrastructure”.

How did we get here? The answer is that regulators, with their risk weighted capital requirements, told the banks to go to where pension funds did much of their savings, basically in what was perceived as fairly safe.

Authers spends most of his article writing on how we should adapt to lower yields and longer life resulting in huge pension deficits. He argued for instance “There is no reason why young investors’ long-term savings should not go into funding infrastructure, or clean energy, or other beneficial investments for the future.”

That could be, clearly supposing the specific beneficial investments for the future, yield enough real returns for our retirement planning young investors. We have left them enough debts so as to complicate matters even more by sticking to them some bridges to nowhere!

But, before that, we must see to that our banks, again become banks making profits and returns on equity by taking risks, and not by just minimizing equity.

While concluding Authers writes: “it grows clear that the issue of pensions divides us, particularly along generational lines. Many view it in moral terms. This is all wrong. We are all in this together, whether we are generationally lucky or not.” Absolutely, for a starter, if the economy is not prosperous and employ the young, who is going to buy all the retirement investments at the price of a then decent purchasing power?

The only way to keep an economy moving forward, so that it does not stall and fall, is to ascertain that primary societal risk-takers, like banks should be, take the risks that are needed. Too much risk aversion is riskier than too much risk taking.

Of course, we all want and need for that risk-taking to be carried out with reasoned audacity. God make us daring! 

@PerKurowski ©