Parents Must Pay for Their Children’s Retirement
Our story, which we call “The Postmortal“ after the 2011 novel by Drew Magary, begins in a dystopian future where genetic advances have allowed the current generation to live forever, subject only to murder, infectious disease, and accidental death. Soon, the global population begins to soar and good jobs for younger generations become scarce as experienced professionals, managers and workers stop retiring. Fortunate children work for their wealthy parents. The less fortunate struggle for a living wage.
Growing concerns about unsustainable population growth and rising income inequality cause governments to enact laws mandating that newborn children remain mortal, be sterilized, and live under the financial care of their parents. The Parental Responsibility Act (PRA) imposes a legal obligation on parents to pay for the medical care and retirement needs of their children, whatever it costs. Parents can be imprisoned for defaulting on these obligations, even for failing to pay for their children’s funeral expenses.
To assure financial responsibility, parents are required annually to produce audited estimates of their children’s future medical and retirement costs and demonstrate their “ability to pay” to the Child Protection Agency (CPA). Parents are not required to set aside dedicated funds for the benefit of their children. Instead, wealthy parents can “self bond” by showing financial responsibility based on their income and assets. Working class parents and once-wealthy parents that fall on hard times must post a surety bond and pay “death taxes” or else euthanize any existing children and be sterilized.
Although mortal, children continue to live ever longer and medical costs keep rising at double-digit rates. Injuries due to accidents and disease add even more cost uncertainty. Parents can only guess the ultimate price tag for their children’s health care and retirement. Because the number of children they can have depends of their ability to pay, parents are incentivized to guess low and hope for the best. But each year, as parents incur higher child support payments than predicted, it’s necessary to increase their PRA estimates.
The CPA accepts as reasonable any estimates that are in line with other similarly situated parents. The CPA knows that reported PRA estimates are way too low. But consistency rather than accuracy is the goal. The PRA does not require, or even allow, actuarial estimates based on projections of historical costs and growth rates, and the CPA’s hands are tied. The CPA also reasons that as long as parents are able to meet their current child support payments, it doesn’t matter if the PRA estimates are grossly understated.
Occasionally, parents die unexpectedly with too few assets to meet their PRA obligations, and the community steps in to care for their children. In rare cases, orphans are placed under the care of the state. The new system works reasonably well for decades until tragedy strikes.
The unforeseen tragedy is a mosquito-borne pandemic disease that first debilitates and then gradually exterminates parents around the world. None are spared. As parents become ill, mounting medical costs deplete their financial resources, and their inability to work prevents the generation of new income.
The wealthy ultimately die poor, and the bond surety companies fail in succession as working class parents expire en masse. The money is gone, and the world awakens to billions of orphaned children with no jobs, no retirement savings and no health benefits. Global financial instability and wars ensue.
Continue reading how this story relates to the industry’s environmental debt…