Funded pensions under the conditions of consistently low and negative interest rates

developed countries sovereign bonds yields are going down, and this trend has been going on for a few decades already. Currently, in most countries whose sovereign debt is considered safe even long-term government bonds' nominal yields are close to zero (or even negative), and their real (i.e. inflation-adjusted) yields are even lower. This means that today there are virtually no safe assets in which pension funds could invest their clients' retirement savings with reasonably high rate of return. Therefore pensions funds in order to provide even barely satisfactory returns to their clients turn to riskier investment strategies. As a result, funded pensions are no longer a reliable financial protection for a persons' life after retirement; rather, it is just another type of speculative assets, which in case of good luck may bring a good return sufficient for a comfortable life after retirement, but in case of bad luck in investment or in case of a large-scale financial crisis, a significant part of the person's retirement savings will be lost. In this case, if the funded component constitutes a large part of the person's pension benefits structure, such person may end up without enough money for mere survival. Such situation is unacceptable for pension system, so state pension system should be of the pay-as-you-go (PAYG) type, while funded pensions can only be a voluntary supplement to people's PAYG pensions.