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> Defined benefit pensions existed for quite a while before "fully funded" pension funds, using a pay-as-you-go system, and could probably survive indefinitely
by bpt3 6y ago
> Defined benefit pensions existed for quite a while before "fully funded" pension funds, using a pay-as-you-go system, and could probably survive indefinitely that way if designed right.
The PBGC was created because this isn't the case. The issues with Social Security are another example of how pay as you go isn't completely sustainable.
- cool_dude85 6y agoThe PBGC is an insurance system. Of course, pension plans haven't always been able to pay out, but the fact that an insurance system exists for them doesn't make them any more of a failure than a savings account backed by FDIC. And what issues with social security do you mean? The program has taken in more than it's paid out since '83.
- bpt3 6y agoYes, and the PBGC exists because so many of the pay as you go pensions went under. Also, social security has required many changes that decrease benefits over the years to remain solvent, such as increasing the expected retirement age.