5 ms·

I agree with you. I think pensions are a mistake in general, however, many municipalities, counties, and states are locked in to existing pensions schemes. I

• sphinx65 10y ago
  Pensions aren't the mistake, low interest rates are the mistake.
• chrisseaton 10y ago
  Doing away with pensions? Huh? How would that work? What would everyone do when they got too old to work? Do you think people should just build up a savings account? Without an annuity what would they do if they live longer than they planned and run out of savings?
  • TDL 10y ago
    There are other accounts/instruments that can replace public pensions. The reality is that politicians over promise on pensions and create unsustainable obligations for future generations.
    • chrisseaton 10y ago
      They could just use defined contribution then there's no future liability.
      • TDL 10y ago
        Agreed
      • HillaryBriss 10y ago
        Yes. But try getting that enacted into law in California. Public sector unions are strongly against that sort of arrangement. They prefer that the taxpayer guarantee them a defined level of pension benefit (no matter what the investment markets do). In other words, it seems that public sector unions want the taxpayer to insulate them from the real world shocks which the other 80% of people have to endure. It's a very valuable benefit and it's understandable that they fight for it. But it is super expensive for the cities and states. In LA there was an attempt about 5 years ago to gather signatures just to put a measure on the ballot to transition city workers from defined benefit to a 401K style defined contribution pension plan. But certain public sector unions made it known that they planned to send their people out to sign those petitions with unverifiable, fake names and addresses. This would increase the likelihood of a failed signature verification process, meaning that the petition would probably not succeed at getting the measure on the ballot. So they dropped the whole effort.
  • eweise 10y ago
    You mean what would all the government workers do when they get too old to work? I don't know but I don't get a pension so why should I pay for theirs?
    • iofj 10y ago
      Given that interest rates are 0.25% and inflation (non-core, the one you'll be paying) is >3% ... what is your alternative ? A pension is the only chance you have of a decent life when you get old. There is nothing else.
      • sbardle 10y ago
        I'm hoping Basic Income will be up and running by the time I hit my late 60s.
        • iofj 10y ago
          But the "basic income" proposals are completely unrealistic. The real proposals, generally referred to as "helicopter money" are about just forgiving central-bank owned government debt, then using the free cash to embark on large infrastructure projects. You won't see any of that cash unless you're involved in the building industry.
    • chrisseaton 10y ago
      I don't understand (and I'm being down voted so I must be saying something stupid) but why do you care if government workers get a salary and a pension bought for them, or a bit more salary and buy their own pension? And don't most most jobs still include a pension as a standard benefit? I'd say you were in the minority if you're a full time tech worker and have no pension at all.
      • toast0 10y ago
        The problem with government pensions is that the work of today is paid for with money today and a promise of money in the future for an undeterminable number of years. Many governments have not saved prudently for their future obligations and the result is current taxes going to support past workers, which taxpayers don't appreciate when it gets extreme. In the private sector, pensions have been going away -- I've worked for about nine employers in the last 20 years or so, only one had a pension plan, a public school district. (I wasn't eligible to participate because I held a part time position) Many (most?) private sector employers offer participation in defined contribution retirement plans such as 401(k), some with employer contributions -- those are much simpler to manage, today's work gets paid for today. There are some government plans of this type, and taxpayers don't get upset about them, generally.
  • cylinder 10y ago
    They would save money themselves? I thought America is all about personal responsibility and independence and such? They can use 401k just like the private sector.
    • chrisseaton 10y ago
      But a private 401k is just another type of pension. The people I was replying to were saying that pensions, in general, so of all types, were a bad idea.
      • cylinder 10y ago
        Many pensions in the US promised guaranteed payments in retirement that they cannot now meet in low interest rate environments. This is one of the core issues with pensions in the US. Also, pensions are not controlled by the individual. The money is pooled and managed by the pension fund. This is of course subject to corruption and bloated fees as we have seen. The 401k program is not perfect, and in fact needs to be totally reformed, but they at least offer more choice and competition and do not promise guaranteed returns.
      • dragonwriter 10y ago
        Pensions are defined benefit, 401k is defined contribution. They are both retirement vehicles, but distinctly different, particularly in terms of risk.