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Yes however the risks and costs are on the organization, not the individual. Even if the organization goes bankrupt or catastrophically mismanaged the fund used

Yes however the risks and costs are on the organization, not the individual. Even if the organization goes bankrupt or catastrophically mismanaged the fund used for the pension, the employee still gets their pension regardless of whether this occurs while or after they are working for the org. That's the important point. The costs and risks are on the org. They can guarantee the pension with low risk investments or dollar equivalents and have effectively no risk or they can try higher risk investments in an effort to save money but at the end of the day the employee/pensioner gets the amounts promised from the beginning.

seanmcdirmid 3y ago
Retirement money has to be invested somewhere, otherwise it’s simply not available when people retire. Just because it’s someone else’s responsibility to fulfill a promise doesn’t change that intrinsic fact. You can’t just store production efficiently in a silo, or store money under your bed and expect that work out.
- CuriousCosmic 3y ago
  Sure however: 1. They can allocate measurably portions of it to low risk investments, bonds, etc. 2. A qualified direct benefit plan (which is referred to as a pension) has guarantees attached to it. Even if the company goes completely under and all that money bursts into flames, the PBGC (https://www.pbgc.gov/ https://www.pbgc.gov/) will guarantee the payout of the pension to the pensioner and foot the bill. I'm not trying to suggest that there aren't costs that need to be borne by someone but forcing the worker to bear those costs seems like it's quite obviously the wrong choice (they should be allowed to bear it if they want to though).
  - seanmcdirmid 3y ago
    Bonds don’t pay out much over inflation, and most retirement plans bank on contributions making much more than inflation to be solvent. A lot of our debt is simply savings for retirement on the other side, it is very necessary for anyone to invest these days (directly or not) if they have any hope of not being destitute when they can’t work anymore. More than that, even if we left it to the government (eg a better funded Social Security), they would have to invest as well, there simply is no way around it given current moribund population growth.

seanmcdirmid 3y ago

Retirement money has to be invested somewhere, otherwise it’s simply not available when people retire. Just because it’s someone else’s responsibility to fulfill a promise doesn’t change that intrinsic fact. You can’t just store production efficiently in a silo, or store money under your bed and expect that work out.

CuriousCosmic 3y ago
Sure however: 1. They can allocate measurably portions of it to low risk investments, bonds, etc. 2. A qualified direct benefit plan (which is referred to as a pension) has guarantees attached to it. Even if the company goes completely under and all that money bursts into flames, the PBGC (https://www.pbgc.gov/ https://www.pbgc.gov/) will guarantee the payout of the pension to the pensioner and foot the bill. I'm not trying to suggest that there aren't costs that need to be borne by someone but forcing the worker to bear those costs seems like it's quite obviously the wrong choice (they should be allowed to bear it if they want to though).
- seanmcdirmid 3y ago
  Bonds don’t pay out much over inflation, and most retirement plans bank on contributions making much more than inflation to be solvent. A lot of our debt is simply savings for retirement on the other side, it is very necessary for anyone to invest these days (directly or not) if they have any hope of not being destitute when they can’t work anymore. More than that, even if we left it to the government (eg a better funded Social Security), they would have to invest as well, there simply is no way around it given current moribund population growth.