PNW - In the year 1348, after more than a decade of war with France, King Edward III of England noticed that many knights who returned home from the front lines had become completely impoverished.
The war had taken a massive financial toll on Edward's men. Some of them had been captured in battle and forced to sell all of their property in order to ransom themselves. Others had become grievously wounded, and their permanent disabilities prevented them from earning a living.
So the King created a special foundation to care for some of these men, who became known as the 'Poor Knights'.
Those who were admitted into the foundation received an annual pension of 40 shillings, worth roughly $3,000 in today's money, plus free room and board at the College of St. George.
It was a nice idea. But naturally it didn't take long for Edward's pension fund to become mismanaged.
The pension fund was in such dire financial straits, in fact, that it was typically only able to provide for three 'poor knights' at a time.
Eventually- and I'm talking hundreds of years later- the pension was ultimately restructured (i.e. bailed out) by King Henry VIII, and later by his daughter Queen Elizabeth I.
Financial mismanagement and bailouts have been the common fate of pension funds throughout history.
Emperor Augustus of the Roman Empire, for example, established a retirement fund for his legionnaires called the Aerarium militare. But subsequent emperors couldn't resist dipping into the fund to pay for their lavish lifestyles and pet projects. So the aerarium ultimately went bust.
Today pension funds around the world are in a similar position- and this is not a controversial statement. Even the OECD acknowledges that the worldwide 'funding gap' of public and private pensions runs into the tens of trillions of dollars.
To put this figure in context, the United Nations....READ MORE
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