> The way most pensions work Most pensions historically. People entering the job market today (or even most of the millennial generation) were never offered t

> The way most pensions work Most pensions historically. People entering the job market today (or even most of the millennial generation) were never offered these final salary pensions. Instead we get defined contribution plans, 401Ks, or nothing at all. The key difference being that defined contribution plans (and 401Ks) are always only worth what was contributed (and investment performance profits). Things like your final salary, final position, or year of retirement (except for IRS rules that give significant tax advantages) don't mean very much except contributing more to these funds. It is a better system from a larger society perspective (nothing is "loaned") but may result in few actually being able to afford retirement.