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I've given this a lot of thought and pretty much concluded government needs to get out of the retirement game. Not saying this as a libertarian or any kind of p

I've given this a lot of thought and pretty much concluded government needs to get out of the retirement game. Not saying this as a libertarian or any kind of principled statement, simply looking at what happens time and again. We need to switch to 401(k)-style DC plans or something similar where the funds have to be contributed today and are beyond the reach of politics. The incentives to game the system are just too strong. Whether incorrect discount rates, systematic underfunding, whatever, people always treat the pension assets as a "big pot of money" for today's emergency, and use it for the pet project du jour. I even see this at my condo association. We have a replacement fund to stay on top of long-term replacement liability. We can't even balance that. What chance does a large government, with many stakeholders, have of getting this right?

lotsofpulp 6y ago
You’re exactly right. If people want an an annuity when they retire, they can go buy it from an insurance company. Politicians should be forced to pay government employees in cash or cash equivalent (aka 401k/HSA/etc), but any and all compensation needs to happen immediately. As a side note, defined benefit pensions don't have a place in the world anymore. It's the same thing as putting your money in a target date retirement fund from Vanguard/Schwab/Fidelity, except you also have to pay all those actuaries and pension fund managers so the expenses are higher. Their purpose has been automated out of existence, but only exists due to politics in the government sector.