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I think you're conflating "mandatory participation" with "defined benefits". You seem to want a system that prevents future-damaging choices by participants. I
by saltcured 3y ago
I think you're conflating "mandatory participation" with "defined benefits". You seem to want a system that prevents future-damaging choices by participants.
I think the other argument going on above is that "defined benefits" isn't actually possible without some escape mechanism (like tax collection) to provide the benefits when it turns out the fund didn't perform as well as hoped. When a private pension fund gets in trouble, its participants lose their safety. The others want a system that prevents future-damaging choices by fund operators, and see defined contributions as the only viable way to do this. You own a chunk of the fund and can transfer it to different stewards.
- fnordpiglet 3y agohttps://www.pbgc.gov/wr/find-an-insured-pension-plan/pbgc-protects-pensions https://www.pbgc.gov/wr/find-an-insured-pension-plan/pbgc-pr...
- lotsofpulp 3y agoPBGC relies on being bailed out all the time. Most recently, multi employer plans got another federal taxpayer bailout: https://www.nytimes.com/2021/03/07/business/dealbook/bailout-pensions-stimulus.html https://www.nytimes.com/2021/03/07/business/dealbook/bailout... If they didn’t, PBGC would have easily failed. The whole thing is an excercise in who has sufficient political power to get bailed out, and if I am playing that game, why not just directly put my hand in the SP500 and ensure I am bailed out directly rather than maybe via proxy.
- cool_dude85 3y agoSome escape mechanism like insurance. This is just scare talk, nobody says that a checking account is impossible without "some escape mechanism" meaning FDIC.