In addition to their many other practical problems, defined-benefit pension schemes are profoundly racist and sexist. This is because different demographic grou

In addition to their many other practical problems, defined-benefit pension schemes are profoundly racist and sexist. This is because different demographic groups have wildly different life expectancies, and these differences aren't taken into account when calculating benefits. Let's look at Social Security. Consider Alice, an Asian-American woman, and Bob, and African-American man. They are exactly identical in every way that is visible to the SSA: they begin working at the same time, they make the same payments on the same dates, and they retire at the same age. Suppose further they both retire at the standard age of 67, and they both have made enough in-payments that they will get the maximum amount of $2,900/month or $34,800/yr. When she retires at age 67, Alice has a long life to look forward to. Asian-American life expectancy is 87 years, and women get a life bonus on top of that, bringing her expectancy to just under 90 years. So on average she'll receive about 23 years of payments, for a total of $786K. Bob's situation is quite different. The African-American life expectancy is 75.4 years, and men get a life penalty, bringing Bob's expectancy to about 73 years. So in expectation he'll receive just about 6 years of payments before passing away, for a total payout of $205K. So these two people make the exact same contributions over the same period of time, but one of them gets almost 4x more of a benefit, on account of her race and gender. The system is literally forcing one group of people to subsidize the retirements of another group that lives longer than them (and, as a separate point, makes much more money).