Pensions

I'm involved in an international effort to help a group of pensioners get their pensions.  As in many parts of the world, (I won't tell you where I'm working) borders have changed and the government that collected the money for pensions from workers is gone.  That happened all over East Europe in East Germany, Czechoslovakia, Yugoslavia and places in the Middle East such as Iraq.  It is a big worry for South Korea in case Kim Jong Il's tyranny falls.

I find that most people assume there was a pension trust fund that is now gone. 

However, I was trained as an economist so I know that national pension funds are really transfer taxes from workers to retirees. There is not and never was a trust fund. Not in the U.S. not anywhere.

So, who should pay the retiree's pensions? In Iraq there is oil revenue, in East Germany there were the prosperous West Germans.  The rest of the former communist world is still suffering with trying to find the money to make the pension payments since the original communist governments occupied the same nation states that are now free.

How do you address this issue?