They’re paid out according to their contributions. But they’re paid with money current workers are paying in. It is technically a ponzi, but was designed to be sustainable instead of promising reckless profits.
It’s technically not a ponzi, it’s just a standard pay-as-you-go system which requires some sort of growth in revenues (such as population growth or changes in taxation) to be sustainable.
A ponzi scheme is fraud that can never pay out what it promised.
Are your parents paid out according to your contributions or their own?
They’re paid out according to their contributions. But they’re paid with money current workers are paying in. It is technically a ponzi, but was designed to be sustainable instead of promising reckless profits.
It’s technically not a ponzi, it’s just a standard pay-as-you-go system which requires some sort of growth in revenues (such as population growth or changes in taxation) to be sustainable.
A ponzi scheme is fraud that can never pay out what it promised.