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There are very few companies that offer pensions. A 401k is not a pension. A pension is recurring money that is given to you upon retirement in perpetuity. A 40

There are very few companies that offer pensions. A 401k is not a pension. A pension is recurring money that is given to you upon retirement in perpetuity. A 401k is just a means of investing your salary into the stock market pre-tax. Your employer does not even have to contribute to it although many if they offer a 401k plan offer some form of match up to x%. My last employer offered to match my contributions up to 6% my current employer offers no match. 401k and pension are very different.

deleted 7y ago
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chrisseaton 7y ago
> A 401k is just a means of investing your salary into the stock market pre-tax. If you plan to spend it when you're retired then it's a pension!
- wonderwonder 7y ago
  ok... Then I guess my savings account is a pension too as well as the jar of small change I keep on the kitchen counter.
- mbrameld 7y ago
  @chrisseaton I'll just go ahead and spoon feed it to you: pension in the context of this discussion means a defined-benefit plan contributed to solely by your employer. I'm surprised a Senior Staff Engineer at Shopify is struggling so hard to grasp the concept of context.
  - chrisseaton 7y ago
    Well I went to look it up on Wikipedia and that's what I read. Not sure why there's such a big disconnect between what people expect you to think it means and what references tell you it means!
    - mbrameld 7y ago
      The reference does include the meaning as applied in this thread, you just have to read past the first couple sentences. You do understand that the same word can have different meanings depending on the context, right? Edit: because I think you just won't be able to get there on your own, look under the heading "Defined benefit plans" on the Wikipedia page for Pension. If you need help defining the words in that section let me know, my spoon is ready to feed Chris Seaton, the Shopify Senior Staff Engineer that doesn't understand context.
      - chrisseaton 7y ago
        Not really sure why you're so worked up about this? I thought a 401(k) was a pension, since it pays you money when you retire, which is what a pension is to me. I went looking it up on Wikipedia which said it was as well. Can you see how I'd think it was a pension? > If you need help defining the words in that section let me know Well I must not understand the word 'pension' then, because it says multiple times that it's a 'pension'! If you don't to explain it to me you're not obligated to.
        mbrameld 7y ago
        I'm happy to explain. Let's start with the fundamentals: Do you understand that the meaning of a word is dependent on its context?
        chrisseaton 7y ago
        I think you're deliberately trolling me so I'm not going to keep responding.
        mbrameld 7y ago
        Your initial confusion was understandable. You said you didn't see how pensions and unions were related. Someone explained to you that most people with pensions in the US are union members. You then said most professionals have a pension but not many are in a union. At that point you revealed the source of your confusion: you don't understand the meaning of the word pension in this context. So somebody else helpfully told you, "When talking about pensions in the USA, people are usually referring to retirement plans where the employer says something roughly like "when you retire, we will pay 80% of your salary". or "when you retire, we will pay you X/month". The responsibility is on the employer to ensure that money is around when you retire." That should have been it. That should have cleared up your confusion by clarifying exactly which definition of pension was being used. You then insisted that a 401k was a pension after being told explicitly that wasn't the type of pension being discussed. What was your point there? Edit: I thought you weren't going to respond? Don't go away mad...
- sct202 7y ago
  It is not. In America, if someone refers to a pension they are usually referring to defined benefit retirement plans, where you work X years and get $Y as a result of some formula and $Y is not related to market performance or how much money is in the pot. This is significant because the risk is on the employer to make up any short falls if the pension fund is not able to pay $Y because of market performance or underfunding. A 401K shifts the risk to the employee. If it's not enough to provide $Y per year, that's the former employee's problem to deal with.

deleted 7y ago

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chrisseaton 7y ago

> A 401k is just a means of investing your salary into the stock market pre-tax. If you plan to spend it when you're retired then it's a pension!

wonderwonder 7y ago
ok... Then I guess my savings account is a pension too as well as the jar of small change I keep on the kitchen counter.
mbrameld 7y ago
@chrisseaton I'll just go ahead and spoon feed it to you: pension in the context of this discussion means a defined-benefit plan contributed to solely by your employer. I'm surprised a Senior Staff Engineer at Shopify is struggling so hard to grasp the concept of context.
- chrisseaton 7y ago
  Well I went to look it up on Wikipedia and that's what I read. Not sure why there's such a big disconnect between what people expect you to think it means and what references tell you it means!
  - mbrameld 7y ago
    The reference does include the meaning as applied in this thread, you just have to read past the first couple sentences. You do understand that the same word can have different meanings depending on the context, right? Edit: because I think you just won't be able to get there on your own, look under the heading "Defined benefit plans" on the Wikipedia page for Pension. If you need help defining the words in that section let me know, my spoon is ready to feed Chris Seaton, the Shopify Senior Staff Engineer that doesn't understand context.
    - chrisseaton 7y ago
      Not really sure why you're so worked up about this? I thought a 401(k) was a pension, since it pays you money when you retire, which is what a pension is to me. I went looking it up on Wikipedia which said it was as well. Can you see how I'd think it was a pension? > If you need help defining the words in that section let me know Well I must not understand the word 'pension' then, because it says multiple times that it's a 'pension'! If you don't to explain it to me you're not obligated to.
      - mbrameld 7y ago
        I'm happy to explain. Let's start with the fundamentals: Do you understand that the meaning of a word is dependent on its context?
        chrisseaton 7y ago
        I think you're deliberately trolling me so I'm not going to keep responding.
        mbrameld 7y ago
        Your initial confusion was understandable. You said you didn't see how pensions and unions were related. Someone explained to you that most people with pensions in the US are union members. You then said most professionals have a pension but not many are in a union. At that point you revealed the source of your confusion: you don't understand the meaning of the word pension in this context. So somebody else helpfully told you, "When talking about pensions in the USA, people are usually referring to retirement plans where the employer says something roughly like "when you retire, we will pay 80% of your salary". or "when you retire, we will pay you X/month". The responsibility is on the employer to ensure that money is around when you retire." That should have been it. That should have cleared up your confusion by clarifying exactly which definition of pension was being used. You then insisted that a 401k was a pension after being told explicitly that wasn't the type of pension being discussed. What was your point there? Edit: I thought you weren't going to respond? Don't go away mad...
sct202 7y ago
It is not. In America, if someone refers to a pension they are usually referring to defined benefit retirement plans, where you work X years and get $Y as a result of some formula and $Y is not related to market performance or how much money is in the pot. This is significant because the risk is on the employer to make up any short falls if the pension fund is not able to pay $Y because of market performance or underfunding. A 401K shifts the risk to the employee. If it's not enough to provide $Y per year, that's the former employee's problem to deal with.