The pension system in the US has gone down the ratholes. About the only people now entering the workforce that can get them any more are government (mainly mun

The pension system in the US has gone down the ratholes. About the only people now entering the workforce that can get them any more are government (mainly municipal) employees and railroad workers. The larger employers have moved from employer-managed defined-benefit pension plans to employee-managed defined-contribution pension plans, usually named for the section of tax code that describes the characteristics of the plan. With defined-contribution plans, while you are working, your employer has the option of paying some money into your retirement account, which has various discouragements against early withdrawals. When you stop working, they stop paying. But you still control the account. With pension plans, the company sets money aside for future pension obligations, and may occasionally get audited by a regulator to ensure that the money is still there and adequate to pay out future benefits under certain assumptions that might not necessarily be true. But the promised benefits of each pension plan are different, selected by the company (or muni-corp) that offered them. There was always a perpetuity (until death), and there might have also been benefits for surviving widow(er)s and minor children. Various health care benefits might have been attached, but probably not, as most retirees would probably go to Medicare. The employee-managed accounts are seen as preferable to the older pension system, because some companies chose to use the employee pension fund to leverage their other investments or embezzle outright, and thus reneged upon their promises to retirees, who were forced to fall back on government-run pension insurance and Social Security. Even now, the pension funds for municipal employees are at risk in towns that overpromised benefits to attract their employees, and are now going bankrupt because of it. What do you do if you are forced to either take a permanent haircut on your pension payments, or live somewhere that cannot afford to hire a firefighter? In short, I think it very likely that every remaining pension plan in the US is based on accounting that simply does not compute. At some point in your career, you discover that someone was lying to you and cheating you, and by then it's usually too late. With the 401(k) plans, at least you know you're getting screwed out of your retirement as you're still working.