8 ms·

Yes, financial regulation is hard. People are always trying to game it. Unfortunately there are really good reasons to avoid ex post facto laws. So you have the

Yes, financial regulation is hard. People are always trying to game it. Unfortunately there are really good reasons to avoid ex post facto laws. So you have the cat and mouse game where people find a loophole, exploit it, and it gets fixed. It gives the appearance of people "getting away with it". Overall the system works, and - almost by definition - you just hear about the exceptions. The solution isn't to give up.

friedman23 7y ago
The solution is to not offer pensions.
- behringer 7y ago
  That's a great short term solution, but then what do you do with society's old people? We still haven't yet seen what's about to happen with the destruction of pensions in the US.
  - Bombthecat 7y ago
    Germany will probably find out soon...
    - ChuckNorris89 7y ago
      How so? Germany's population is aging, but they're also importing immigrants like there's no tomorrow to ballance things out.
      - Bombthecat 7y ago
        It will take two or three generations before they make (enough) money to pay for the "high pensions" of old Germans... And even we get a ton of new people. The old generations are still more.. M
    - distances 7y ago
      For someone not familiar with the German situation, do you have some article or other details to clarify?
  - xkde 7y ago
    The same thing as the thousands of years prior to pensions?
    - fzeroracer 7y ago
      Societies did one of the following: 1. Had the government or community take care of the elderly. 2. Criminalize poverty and force them to work or be imprisoned. 3. Let them die. Even the Roman Empire had pension for people that served in the military. You can take your pick as to which system you'd prefer, but pensions have quite literally existed for thousands of years in some form.
      - xkde 7y ago
        4. Personal saving / investing. 5. Lean on family (super common, even in several non-American societies today) It’s disingenuous to assert that the alternative to no pension is blood in the streets.
        behringer 7y ago
        A pension is a personal savings. Back when pensions were actually offered by companies, you'd often choose your company by not just your paycheck, but by the retirement plan they offer. You would literally turn down jobs that might pay better but offer no pension. If that's not saving your money, then what is?
        xkde 7y ago
        Because pensions aren’t portable. They lock you into a particular organization. 401k, stocks, savings accounts, etc, do not. Pensions (in the private sector, public ones are another ball of wax entirely) do not protect you against inflation. You have no control over what they’re invested in (which in some cases, is the pension manager’s retirement). There are much better options available.
        walshemj 7y ago
  - deleted 7y ago
    [deleted]
- leetcrew 7y ago
  I always feel like I'm missing something fundamental when I read these debates. unless the only alternative is "no retirement plan", why would you ever want a pension? wouldn't you be much better off having your employer dump the funds in your 401k?
  - xkde 7y ago
    As a general rule, the returns are better in 401k, yes. This assumes that it’s invested in something with good growth potential (U.S. stock index funds, etc) and not money market funds or something highly speculative, of course.
  - throwaway5752 7y ago
    Maybe. Pensions, like social security, are better understood as longevity insurance. Pensions are complicated by lump sum payouts, survivor benefits for spouses, and a bunch of other things. But you collect them for life. If you live a short time, the 401k might be a better outcome and the beneficiaries of your will can inherit the wealth (or your spouse, if you outlive them, vs reduce survivor benefits). If you live a long time, it's overwhelmingly likely you have not saved up enough for it, and short of letting the elderly eat cat food and die on the street, the costs of that outcome are socialized to the rest of us.
    - leetcrew 7y ago
      I guess the risk pooling is the part that I didn't fully appreciate. still AFAIK, most pensions are not inflation adjusted, so if you live for a long time, you risk "running out of money" anyway.
      - jsmith99 7y ago
        In the UK these pension schemes, known as 'defined benefit', legally have to be inflation adjusted. There is still loads of risk to the employer as they are on the hook for any future shortfall. Shortfalls are common as there is huge correlation of risk, such as actuaries systematically under estimating gains in life expectancy. That's why most such schemes are in deficit.
- coldtea 7y ago
  So, like in some third world shithole?
TheSpiceIsLife 7y ago
> Overall the system works Do you have your head in the sand?
_0ffh 7y ago
> Yes, financial regulation is hard. People are always trying to game it. Or they make sure the regulation comes with built-in loopholes to exploit later. https://translate.google.com/translate?hl=&sl=auto&tl=en&u=http%3A%2F%2Fwww.zeit.de%2Fnews%2F2019-10%2F29%2Fzeuge-im-cum-ex-prozess-staat-selbst-foerderte-steuerdeals https://translate.google.com/translate?hl=&sl=auto&tl=en&u=h...

friedman23 7y ago

The solution is to not offer pensions.

behringer 7y ago
That's a great short term solution, but then what do you do with society's old people? We still haven't yet seen what's about to happen with the destruction of pensions in the US.
- Bombthecat 7y ago
  Germany will probably find out soon...
  - ChuckNorris89 7y ago
    How so? Germany's population is aging, but they're also importing immigrants like there's no tomorrow to ballance things out.
    - Bombthecat 7y ago
      It will take two or three generations before they make (enough) money to pay for the "high pensions" of old Germans... And even we get a ton of new people. The old generations are still more.. M
  - distances 7y ago
    For someone not familiar with the German situation, do you have some article or other details to clarify?
- xkde 7y ago
  The same thing as the thousands of years prior to pensions?
  - fzeroracer 7y ago
    Societies did one of the following: 1. Had the government or community take care of the elderly. 2. Criminalize poverty and force them to work or be imprisoned. 3. Let them die. Even the Roman Empire had pension for people that served in the military. You can take your pick as to which system you'd prefer, but pensions have quite literally existed for thousands of years in some form.
    - xkde 7y ago
      4. Personal saving / investing. 5. Lean on family (super common, even in several non-American societies today) It’s disingenuous to assert that the alternative to no pension is blood in the streets.
      - behringer 7y ago
        A pension is a personal savings. Back when pensions were actually offered by companies, you'd often choose your company by not just your paycheck, but by the retirement plan they offer. You would literally turn down jobs that might pay better but offer no pension. If that's not saving your money, then what is?
        xkde 7y ago
        Because pensions aren’t portable. They lock you into a particular organization. 401k, stocks, savings accounts, etc, do not. Pensions (in the private sector, public ones are another ball of wax entirely) do not protect you against inflation. You have no control over what they’re invested in (which in some cases, is the pension manager’s retirement). There are much better options available.
        walshemj 7y ago
- deleted 7y ago
  [deleted]
leetcrew 7y ago
I always feel like I'm missing something fundamental when I read these debates. unless the only alternative is "no retirement plan", why would you ever want a pension? wouldn't you be much better off having your employer dump the funds in your 401k?
- xkde 7y ago
  As a general rule, the returns are better in 401k, yes. This assumes that it’s invested in something with good growth potential (U.S. stock index funds, etc) and not money market funds or something highly speculative, of course.
- throwaway5752 7y ago
  Maybe. Pensions, like social security, are better understood as longevity insurance. Pensions are complicated by lump sum payouts, survivor benefits for spouses, and a bunch of other things. But you collect them for life. If you live a short time, the 401k might be a better outcome and the beneficiaries of your will can inherit the wealth (or your spouse, if you outlive them, vs reduce survivor benefits). If you live a long time, it's overwhelmingly likely you have not saved up enough for it, and short of letting the elderly eat cat food and die on the street, the costs of that outcome are socialized to the rest of us.
  - leetcrew 7y ago
    I guess the risk pooling is the part that I didn't fully appreciate. still AFAIK, most pensions are not inflation adjusted, so if you live for a long time, you risk "running out of money" anyway.
    - jsmith99 7y ago
      In the UK these pension schemes, known as 'defined benefit', legally have to be inflation adjusted. There is still loads of risk to the employer as they are on the hook for any future shortfall. Shortfalls are common as there is huge correlation of risk, such as actuaries systematically under estimating gains in life expectancy. That's why most such schemes are in deficit.
coldtea 7y ago
So, like in some third world shithole?

TheSpiceIsLife 7y ago

> Overall the system works Do you have your head in the sand?

_0ffh 7y ago

> Yes, financial regulation is hard. People are always trying to game it. Or they make sure the regulation comes with built-in loopholes to exploit later. https://translate.google.com/translate?hl=&sl=auto&tl=en&u=http%3A%2F%2Fwww.zeit.de%2Fnews%2F2019-10%2F29%2Fzeuge-im-cum-ex-prozess-staat-selbst-foerderte-steuerdeals https://translate.google.com/translate?hl=&sl=auto&tl=en&u=h...