5 ms·

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 limitin

by 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?
      - rhizome 9y ago
        So...it's not that people have to change jobs because pensions don't really exist anymore, it's that there aren't really pensions because companies don't give a shit about employees anymore? I guess that's a reason other than pensions, technically.
    - taurath 9y ago
      Moving companies is the only way to get a promotion or a substantial raise in the current business climate. Had I stayed at the same company I'd be the highest paid developer but making 40-50% less than what a competitor has paid for my skillset.
      - rhizome 9y ago
        To be clear, you're talking about direct cash, right?
        taurath 9y ago
        Yes - this doesn't apply to big4, who realize this and tend to do a better job of stringing you along with big stock grants.
- naravara 9y ago
  Portability is nice. I’ve seen so many people in government just trying to ride it out until they qualify for the pension. They don’t really care about the job and are just trying to avoid having to do anything until it’s time to retire. Long-standing structural problems just get covered up and ignored for the next chump to deal with. It also represents a huge tax on people who want to be able to change jobs. I would prefer a world where people feel more free to leave jobs that suck or aren’t good fits for them. Locking them down with pensions, options plans, or 401k matching programs that vest over time are all mechanisms for employers to recapture what would have been paid out as wages from employees who leave early (who often tend to be younger). A UBI that puts you somewhere above the poverty line supplemented with a forced savings program seems like the best move. It gives you portability, simplifies the system and administrative burden, and offers a hedge against the vagaries of the market.
Retric 9y ago
Fractional pensions are a thing, the minimum can be a low as 3 years.
taneq 9y ago
That's why pensions should be provided by the government, as one of the things paid for by all those taxes you paid over the years. Which is why I get really mad when the current Australian government tries to spin it that retirees are 'bludgers' and are a drain on the system when they draw their (paltry) pensions. No, these people paid 40 years' worth of taxes to the government, and being supported by the government after they retired was part of that deal. You can't offer to pay me tomorrow for a hamburger today, and then when I ask for my money tomorrow, call me a beggar.
- briandear 9y ago
  How about lowering taxes and let people be adults and plan for their own retirement? With those 40 years of taxes invested in an index mutual fund, I’d be a millionaire many times over rather than hoping for a paltry check each month. Any retirement plan dependent on government means that you will get less value out than you put in. Think about “management fees” on an index fund – a fraction of a percent generally. Think about the de facto management fee taken by government – orders of magnitude more. Not to mention your return on “investment” is rather low and you can’t pass on a government pension to your children. So if you die at 50, the government keeps all that excess you “paid in.” That isn’t fair. People ought to have the freedom to opt-out. A compromise might be to require paying in to a system, but you get to direct where that money is invested. Somewhat like a mandatory IRA. In the US, you are forced to pay into social security – why not “force” people to have an IRA instead? However I think the real reason that doesn’t work is that it would make people less dependent on particular political parties – because the government no longer has as much power over your survival. “Vote for us or else <the other party> will cut your benefits and make you starve. Unfortunately, with all the talk of freedom, it’s mostly just talk. Actual freedom means being able to make your own decisions as well as living with the good or bad consequences of those decisions.
  - taneq 9y ago
    Sure, if you're starting on that basis. But it's a different thing entirely if you start out with an explicit deal saying "you pay 30% of your income to the government, and you get a pension when you retire" and then after you fulfill your part of the bargain, the government says "oh uh, that money you paid, we spent it." We now have mandatory superannuation contributions which work pretty much how you're suggesting, and the government is pushing towards getting rid of pensions in future.
hobarrera 9y ago
Actually, you mean "pensions are defined in the US" aren't portable. Employer and pension are not tied together in a great deal of countries - for example: state-controlled. So even if you switch jobs, the plan remains the same. (Also relevant is that most countries have a single state, so state-controlled means you can actually move anywhere inside the country and keep the same plan).

by dv_dt 9y ago

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?
    - rhizome 9y ago
      So...it's not that people have to change jobs because pensions don't really exist anymore, it's that there aren't really pensions because companies don't give a shit about employees anymore? I guess that's a reason other than pensions, technically.
  - taurath 9y ago
    Moving companies is the only way to get a promotion or a substantial raise in the current business climate. Had I stayed at the same company I'd be the highest paid developer but making 40-50% less than what a competitor has paid for my skillset.
    - rhizome 9y ago
      To be clear, you're talking about direct cash, right?
      - taurath 9y ago
        Yes - this doesn't apply to big4, who realize this and tend to do a better job of stringing you along with big stock grants.
naravara 9y ago
Portability is nice. I’ve seen so many people in government just trying to ride it out until they qualify for the pension. They don’t really care about the job and are just trying to avoid having to do anything until it’s time to retire. Long-standing structural problems just get covered up and ignored for the next chump to deal with. It also represents a huge tax on people who want to be able to change jobs. I would prefer a world where people feel more free to leave jobs that suck or aren’t good fits for them. Locking them down with pensions, options plans, or 401k matching programs that vest over time are all mechanisms for employers to recapture what would have been paid out as wages from employees who leave early (who often tend to be younger). A UBI that puts you somewhere above the poverty line supplemented with a forced savings program seems like the best move. It gives you portability, simplifies the system and administrative burden, and offers a hedge against the vagaries of the market.

Retric 9y ago

Fractional pensions are a thing, the minimum can be a low as 3 years.

taneq 9y ago

That's why pensions should be provided by the government, as one of the things paid for by all those taxes you paid over the years. Which is why I get really mad when the current Australian government tries to spin it that retirees are 'bludgers' and are a drain on the system when they draw their (paltry) pensions. No, these people paid 40 years' worth of taxes to the government, and being supported by the government after they retired was part of that deal. You can't offer to pay me tomorrow for a hamburger today, and then when I ask for my money tomorrow, call me a beggar.

briandear 9y ago
How about lowering taxes and let people be adults and plan for their own retirement? With those 40 years of taxes invested in an index mutual fund, I’d be a millionaire many times over rather than hoping for a paltry check each month. Any retirement plan dependent on government means that you will get less value out than you put in. Think about “management fees” on an index fund – a fraction of a percent generally. Think about the de facto management fee taken by government – orders of magnitude more. Not to mention your return on “investment” is rather low and you can’t pass on a government pension to your children. So if you die at 50, the government keeps all that excess you “paid in.” That isn’t fair. People ought to have the freedom to opt-out. A compromise might be to require paying in to a system, but you get to direct where that money is invested. Somewhat like a mandatory IRA. In the US, you are forced to pay into social security – why not “force” people to have an IRA instead? However I think the real reason that doesn’t work is that it would make people less dependent on particular political parties – because the government no longer has as much power over your survival. “Vote for us or else <the other party> will cut your benefits and make you starve. Unfortunately, with all the talk of freedom, it’s mostly just talk. Actual freedom means being able to make your own decisions as well as living with the good or bad consequences of those decisions.
- taneq 9y ago
  Sure, if you're starting on that basis. But it's a different thing entirely if you start out with an explicit deal saying "you pay 30% of your income to the government, and you get a pension when you retire" and then after you fulfill your part of the bargain, the government says "oh uh, that money you paid, we spent it." We now have mandatory superannuation contributions which work pretty much how you're suggesting, and the government is pushing towards getting rid of pensions in future.

hobarrera 9y ago

Actually, you mean "pensions are defined in the US" aren't portable. Employer and pension are not tied together in a great deal of countries - for example: state-controlled. So even if you switch jobs, the plan remains the same. (Also relevant is that most countries have a single state, so state-controlled means you can actually move anywhere inside the country and keep the same plan).