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I think I misunderstood pensions. I suppose it is much more like a 401k, so when it says pension, that's probably almost exactly a 401k deposit except to NYSCR:

I think I misunderstood pensions. I suppose it is much more like a 401k, so when it says pension, that's probably almost exactly a 401k deposit except to NYSCR: https://en.wikipedia.org/wiki/New_York_State_Common_Retirement https://en.wikipedia.org/wiki/New_York_State_Common_Retireme... Guess these things are rather hard to understand as a financial layman. I don't know which interpretation is correct, or if something else is more correct.

socialist_coder 6y ago
A pension pays you a fixed rate per year until you die. Very different from a 401k. And that is why all these government entities have such hefty pension responsibilities. It seems absolutely stupid. Like, just do the math. What did these people think were going to happen 50 years down the road?
- jfengel 6y ago
  For a number of years, it was a tactic for resolving impasses between labor and management. Labor would accept a lower salary in exchange for a pension -- funded by expected growth rather than an investment account. Everybody wins. Workers get a safe retirement. Management gets to hold the line on salaries. Oops. It might even have worked, if growth had continued the way it did in the 50s and 60s, where there was often 5% GDP growth. Then came the 80s. Things have leveled off at a reasonable 2% growth, but that's not enough to support all of these pensions. But the pension plans were promises, and not contingent on that. So it's not quite as stupid as it sounded. But it's still pretty stupid. Everybody thought they were taking advantage of the other side.