7 ms·

For my money I would much, much rather own shares of stock in my retirement plan than have a state- or corporate-backed pension. Have you seen the movie Casino

For my money I would much, much rather own shares of stock in my retirement plan than have a state- or corporate-backed pension. Have you seen the movie Casino? That actually happened, the Teamsters pension fund came under control of the mob. What about Illinois, which is facing a $120 billion pension shortfall due to decades of accounting gimmicks? What about the UAW guys, who were counting on pensions from the big 3? All I'm saying is, look at how it _actually_ works, in practice, vs. how it _could_ work, in theory. The reality is, DB plans are getting phased out because they're too expensive to service, and too risky for employees. You can make the argument that people aren't getting compensated enough, and maybe that's true, but that's not an argument about DB vs. DC. The point is, there are no certainties in this world, and if someone tells you there are, they're lying.

frgtpsswrdlame 9y ago
Sure but if you look at how 401ks and IRAs _actually_ work you'll see people being broke in retirement as well and the idea that DB is more risky than DC for employees is just totally backward. The fix here is more transparent DB, not shoving people into DC plans which were never meant for them.
Retric 9y ago
And I vastly prefer the reverse. Pensions avoid the classic hopping you die before you run out of money. Further, money enough to cover the basics is vastly more important than 'extra'.
- haltingthoughts 9y ago
  Annuities do exist and you can buy them with IRA/401k savings.
  - Retric 9y ago
    While true, they generally don't have government backing and can thus fail fairly easily.
- dv_dt 9y ago
  Pensions aren't portable - in the modern labor market where people are expected to have multiple emplyers and possibly even career arcs, that's a pretty limiting. Personally, I feel that too many pensions plans (private and state) are at financial risk and have seen too many companies go under (wiping out pensions), or severely cut back (changing their payouts and coverage). Really, I'd prefer something more portable than even a 401k. Rolling over to an IRA after you change companies is ok, but I'd really rather have savings separated from employers to a greater degree even when it's accumulating.
  - joeyo 9y ago
    > Pensions aren't portable - in the modern labor market > where people are expected to have multiple emplyers and > possibly even career arcs, that's a pretty limiting. Which is the cause and which is the effect? Do workers want to have multiple employers and career arcs?
    - dv_dt 9y ago
      I don't think they necessarily want to, but I think it's often needed for reasons mostly tangential from pensions. But if you accept that multiple jobs/careers are a reality, then pensions plans, as traditionally constructed, don't do much for workers.
      - rhizome 9y ago
        I think it's often needed for reasons mostly tangential from pensions Such as?
        dv_dt 9y ago
        Companies used to provide pensions as an incentive to stay at the company long term and not change employers, but really most of them don't care to plan for employees to stay and be developed long term.. so accordingly no pension plan is offered either. Even ones that still offer pensions, if the support isn't there then it's in conflict with how a pension matures it's benefits. Many companies treat workers as interchangable cogs and don't provide/encourage for any exceptional wage or career growth or training. So to move upward one has to change companies - dropping (or at best pausing) the pension. Not all companies are like this, but many (most) are. I thought this all was pretty widely understood?
- scarface74 9y ago
  You can buy an immediate annuity that has guaranteed income until you die with different options: A) guaranteed life B) guaranteed life of you or your spouse C) guaranteed life with a return of the unused amount D) guaranteed life with a guaranteed x year certain Of course the different options you choose affect your monthly payout.
  - ACow_Adonis 9y ago
    And effectively all guarantees (be they government or private) are probably better understood as guarantees conditional on institutional survival risk.

frgtpsswrdlame 9y ago

Sure but if you look at how 401ks and IRAs _actually_ work you'll see people being broke in retirement as well and the idea that DB is more risky than DC for employees is just totally backward. The fix here is more transparent DB, not shoving people into DC plans which were never meant for them.

Retric 9y ago

And I vastly prefer the reverse. Pensions avoid the classic hopping you die before you run out of money. Further, money enough to cover the basics is vastly more important than 'extra'.

haltingthoughts 9y ago
Annuities do exist and you can buy them with IRA/401k savings.
- Retric 9y ago
  While true, they generally don't have government backing and can thus fail fairly easily.
dv_dt 9y ago
Pensions aren't portable - in the modern labor market where people are expected to have multiple emplyers and possibly even career arcs, that's a pretty limiting. Personally, I feel that too many pensions plans (private and state) are at financial risk and have seen too many companies go under (wiping out pensions), or severely cut back (changing their payouts and coverage). Really, I'd prefer something more portable than even a 401k. Rolling over to an IRA after you change companies is ok, but I'd really rather have savings separated from employers to a greater degree even when it's accumulating.
- joeyo 9y ago
  > Pensions aren't portable - in the modern labor market > where people are expected to have multiple emplyers and > possibly even career arcs, that's a pretty limiting. Which is the cause and which is the effect? Do workers want to have multiple employers and career arcs?
  - dv_dt 9y ago
    I don't think they necessarily want to, but I think it's often needed for reasons mostly tangential from pensions. But if you accept that multiple jobs/careers are a reality, then pensions plans, as traditionally constructed, don't do much for workers.
    - rhizome 9y ago
      I think it's often needed for reasons mostly tangential from pensions Such as?
      - dv_dt 9y ago
        Companies used to provide pensions as an incentive to stay at the company long term and not change employers, but really most of them don't care to plan for employees to stay and be developed long term.. so accordingly no pension plan is offered either. Even ones that still offer pensions, if the support isn't there then it's in conflict with how a pension matures it's benefits. Many companies treat workers as interchangable cogs and don't provide/encourage for any exceptional wage or career growth or training. So to move upward one has to change companies - dropping (or at best pausing) the pension. Not all companies are like this, but many (most) are. I thought this all was pretty widely understood?
scarface74 9y ago
You can buy an immediate annuity that has guaranteed income until you die with different options: A) guaranteed life B) guaranteed life of you or your spouse C) guaranteed life with a return of the unused amount D) guaranteed life with a guaranteed x year certain Of course the different options you choose affect your monthly payout.
- ACow_Adonis 9y ago
  And effectively all guarantees (be they government or private) are probably better understood as guarantees conditional on institutional survival risk.