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I saw a video on YouTube of a Yellow employee of 30 years distraught that he wouldn’t receive pension that he was counting on (see https://youtu.be/kZyHlPMOCvw?

I saw a video on YouTube of a Yellow employee of 30 years distraught that he wouldn’t receive pension that he was counting on (see https://youtu.be/kZyHlPMOCvw?t=105s https://youtu.be/kZyHlPMOCvw?t=105s) . It’s heartbreaking. I don’t really understand the pension model or how it is legal to just take it away randomly. Why isn’t the model just to pay employees more and let them save to a 401k that they control? Anyways this outcome sounds like good news. Employees get what they were due.

rwmj 2y ago
In the UK after a number of scandals of this type, these kinds of "defined benefit" pensions are now backstopped by a government agency (paid for by a levy on all pensions): https://en.wikipedia.org/wiki/The_Pensions_Regulator https://en.wikipedia.org/wiki/The_Pensions_Regulator (edit: actually it's the https://en.wikipedia.org/wiki/Pension_Protection_Fund https://en.wikipedia.org/wiki/Pension_Protection_Fund which does the backstop but the two bodies are related) There is a conflict of interest here, but regular employees aren't able to evaluate that.
ryandrake 2y ago
We don't really know yet if the 401k experiment is going to be successful. People retiring right now are by and large the earliest beta testers of the 401k idea. My parents and their parents had typical Defined Benefit pensions, and they were all able to simply enjoy their retirements without having to lift a finger to understand the stock market and index funds and tax rules and without needing to micromanage some brokerage account. They never had to worry about contribution limits, IRAs vs. 401k, Roth vs. non-Roth, asset allocation, the right investments for pre-tax vs post-tax money, rules about withdrawing contributions vs. earnings, having to guess what year they'll die to pick the right draw-down rate. They just worked, retired, and money magically came in. You have to admire the simplicity.
- toomuchtodo 2y ago
  > We don't really know yet if the 401k experiment is going to be successful. Unlikely, based on the data. https://news.ycombinator.com/item?id=41488940 https://news.ycombinator.com/item?id=41488940 (citations from a previous comment I wrote)
  - datavirtue 2y ago
    401ks are great, if you know what you are doing. I consider it a miracle if a blue collar worker has a 401k, is actually putting money in it, AND has the funds allocated to an appropriate fund AND hasn't withdrawn it a few times in some cockamamie attempt at making a smart financial decision like: paying cash for a truck so they don't have a payment. Our public school system has failed. Full stop.
    - deleted 2y ago
      [deleted]
    - missedthecue 2y ago
      Public schools successfully teach most Americans to read and do basic math. Being able to read and do math is all you need to navigate the greater part of modern society. Putting 15 year olds into a personal finance or home economics class can be productive, but we can't expect high school to teach you what to do in every possible scenario you'll encounter in life. At some point you're going to have to read and do a little bit of math.
      - ghaff 2y ago
        I'm certainly not opposed to having a home economics class even in a college prep curriculum. Throw in some stats while you're at it and maybe some cooking lessons. But that doesn't stop people from being greedy and stupid like a lot of the tech folks during the past couple decades or so. Yeah, some won big, but so do some people who play the lottery every week. And sometimes it even makes sense to roll the dice a bit.
      - PaulDavisThe1st 2y ago
        Pretending that successfully managing investments during 40+ years of working life so as to provide a reasonably comfortable requirement just requires "a little bit of math" is disingenuous in the extreme.
        datavirtue 2y ago
- blackeyeblitzar 2y ago
  Can you clarify what you’re referring to with defined benefit? I am really looking to make it so that companies don’t hold pensions hostage. I think they should be putting money into some outside thing that is independently managed
  - garciasn 2y ago
    The retirement payment is based on the employee's work history, age, and earnings, rather than on investment returns.
    - ghaff 2y ago
      Right. And there are some (fairly significant) protections these days. Learned recently that my pension which was farmed out to an outside benefits company at one point is now being farmed out to an insurance company TBD. I'm not especially concerned. The risk seems fairly low and I'm not really dependent. But this is the plus and minus of defined benefits versus something like a 401(k).
  - Arainach 2y ago
    Retirement plans are defined benefit ("employee will be paid $X per time period during retirement") or defined contribution ("the company puts $Y per time period into this retirement vessel"). https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/cash-balance-pension-plans https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/...
- missedthecue 2y ago
  The main reason 401k wouldn't work is if people ignore and neglect it until they're 60 years old. Sadly a lot of Americans do this. This could be solved by making contributions mandatory like Australia and Singapore. As long as you're putting money in, the rest is just math + time.
  - deleted 2y ago
    [deleted]
  - unyttigfjelltol 2y ago
    Or a custodian steals the money. Or the beneficiary selects poor investments. Or their employer doesn't do a generous match. Or the retiree switched jobs a few times and never fully "vested" in employer contributions. Or the market doesn't make the "math + time" formula work quite right. Or they couldn't contribute at various times due to family or health emergencies. Or all of these things.
    - missedthecue 2y ago
      Most of these points apply to pensions too. Getting laid off two weeks before your pension vests is an all too common story. Companies go bankrupt and the judge rules the opposite of what he did here. Pension plans themselves can go bankrupt, and although they're insured, it's only up to a certain limit. And most of your 401k is going to be the money you put in, not the match anyway. So it sucks when you aren't able to vest or your employer doesn't match well, but that doesn't kill the concept. The formula is proven to work in other countries. My point is you can't refuse to use a defined contribution scheme and then complain it didn't work.
    - jellicle 2y ago
      "my retirement is safe and secure, I've invested with Crypto401K"
- office_drone 2y ago
  If it doesn't work, we can always go back to the pre-finance retirement model - raise lots of kids and live with them during a 'retirement' in which you continue to work as much as possible.
- ghaff 2y ago
  Defined benefit plans mostly work OK (with some bankruptcy exceptions modulo various legal protections) for people working a decade or two for a firm. Probably not great benefits but I know I wasn't even thinking about my pension early career. So now it's essentially free money from mental accounting perspective. 401ks require deliberate action which a lot of people won't do or at least put off and they may make poor investment decisions--like invest everything in their own company's stock if that's an option.
- jancsika 2y ago
  > We don't really know yet if the 401k experiment is going to be successful. Wouldn't there have been some segment of the population with about 25 years of 401k by 2008? It should be possible to compare them retiring during the downturn to people living off their pensions.
jncfhnb 2y ago
A pension plan is guaranteed. A 401k is not. A pension is theoretically much better because the company must pay you the money even if the investments didn’t work out. Contingent on the pension being there at the end of your career it’s much better. YMMV on getting a worse deal with a 401k that is more secure. They can’t “take it away”. They just ran out of money with the judge ruling that shareholders don’t get priority access to what’s left.
- bb88 2y ago
  Look at United Airlines. UA didn't fund the pension plan, then declared bankruptcy in 2005 primarily to get the $10B pension off it's books. Now that UA is profitable again, it's under no obligation to fund the pension plan it discharged from it's 2005 bankruptcy. https://www.pbgc.gov/wr/large/united/united-airlines-plan-restoration https://www.pbgc.gov/wr/large/united/united-airlines-plan-re...
  - toomuchtodo 2y ago
    We're doing better. Just have to keep grinding.
- blackeyeblitzar 2y ago
  Didn’t Boeing get rid of its pension plan? I don’t know the details but at least news interviews of striking union workers made it seem like a pension that they had worked for previously was then taken away, which seems unfair.
  - jncfhnb 2y ago
    A quick Google suggests they stopped offering it and moved to a 401k, not that they just canceled their existing obligations. This is generally the popular move because pensions plans create huge liabilities over time because you’re promising a final outcome rather than a promised level of funding.
    - ghaff 2y ago
tezzer 2y ago
Pensions pay (paid?) regardless of how the stock market is doing, and they pay for life. They grow with inflation, and you don't need to know anything about stocks, markets, funds, rebalancing or anything else to benefit. It was an elegant weapon for a more civilized age. If it wasn't mismanaged and raided. Incidentally, today only 1/3 of working Americans have 401ks.
- ghaff 2y ago
  "More civilized age" also mostly meant people working for an extended period of time, e.g. 10-years plus, for a single employer. And, even if an employer doesn't offer a 401(k) these days, there are generally other tax-advantaged savings mechanisms although they, of course, don't get employer contributions.
CharlieDigital 2y ago
> Why isn’t the model just to pay employees more and let them save to a 401k that they control? If you really want to understand this, it's probably worth your while to check out the Frontline piece The Retirement Gamble[0] But a few key takeaways: 1) the 401k was never designed to be a general purpose retirement plan, 2) you would expect professional fund managers to be better at maximizing returns compared to a trucker selecting their own individual funds..., 3) if they even voluntarily invest in it in the first place. The purpose of the pension is that a pool of employees collectively invest a portion of their income by hiring professional investment managers that ostensibly know what they are doing and can stay abreast of the market. They design short and long term investment strategies to meet the defined obligations of those pension contracts. The 401k is not the same thing; we are placing the onus on the individual to research funds, understand the market, re-balance their portfolio. And in the event of a recession, the individual might be SOL if they are dependent on that portfolio. Next time you're at a rest stop, take a sampling and see how financially literate they are and how much they know even about mutual fund selection. [0] https://www.pbs.org/wgbh/frontline/documentary/retirement-gamble/transcript/ https://www.pbs.org/wgbh/frontline/documentary/retirement-ga..., https://www.pbs.org/wgbh/frontline/documentary/retirement-gamble/ https://www.pbs.org/wgbh/frontline/documentary/retirement-ga...
- snarf21 2y ago
  Fair enough, but we also know that an index fund beats "professional investment managers" over any reasonable time horizon. Warren Buffet bet a million dollars that this is true and won. The big problems with a pension is the rent seeking by all the brokers and "professionals" just for the employee to earn less than the index and if there is a recession, you need more new employees to prop up and bail the pension out (pyramid scheme). Why not just have something like SIMPLE+ and you get a matching percentage that has to be a major index and you can't move it out until retirement when you can roll to your own devices and whims. The employees and their families would see a net benefit of such a mechanism.
  - ghaff 2y ago
    Companies do restrict 401(k) options. Of course you could restrict even further but a lot of employees complain (loudly) that they don't have a broader array of investment options.
throw0101a 2y ago
> I don’t really understand the pension model or how it is legal to just take it away randomly. Why isn’t the model just to pay employees more and let them save to a 401k that they control? 1. It is not legal to just take it away, as this ruling kind of indicates. 2. Most people are absolutely at (a) putting aside money, and (b) investing it properly. See for example "Retirement Crisis: The Great 401(k) Experiment Has Failed for Many Americans": * https://www.nbcnews.com/business/retirement/great-401-k-experiment-has-failed-many-americans-n327321 https://www.nbcnews.com/business/retirement/great-401-k-expe... Doing a search for "401k experiment has failed" will give lots of results.
blackoil 2y ago
Why is pension managed by the company, wouldn't a national pool be better? In India in the latest system, employee pays some, company adds some and from the money collected over lifetime, the pension will be given. The fund is managed by central government.
- know-how 2y ago
  [dead]
- stvltvs 2y ago
  For the US, you're describing the Social Security program more or less which almost all workers participate in. The benefits aren't enough to live comfortably on, so people need to supplement it with something else.
  - ghaff 2y ago
    A lot of people complaining about the downsides of company-sponsored defined benefit programs (which are significant) basically just want higher social security payouts (and presumably associated taxes).
jerf 2y ago
It isn't legally possible to "just" take a pension away. However, it is not economically possible to deliver defined benefits into an uncertain future. The collision of the unstoppable force of law and the immovable rock of economic reality creates a great deal of excitement and uncertainty. Also rather a lot of those "heat and not much light" arguments, as people speaking in one of those two frames argue with someone else in the other and they end up talking right past each other.
- _DeadFred_ 2y ago
  I agree with your point that delivering on this is an impossibility for business, which inherently means it's an even bigger impossibility for individuals (if a huge corporation can't figure it out, Bob working on the line definitely can't) and should therefore be moved to the government as the other option (Logan's running everyone) is going to be a really hard sell.
  - jerf 2y ago
    Government can't do it either. Defined benefit is impossible for everyone. "Government" should be understood as a general term, not just "The US government" or whatever Western country you may live in. How many governments have fallen in the past 20 years? Probably more than you may realize. How sure are you that "the government" you live under will be there in 30 years? There's an awful lot of stress in the world right now. And I'm not even talking about governments providing pensions, I'm talking about the fact you can't even count on them to exist. They still can't provide the impossible after that and promise absolutely defined benefits. Although this is a non-trivial part of why defined benefit is impossible for any entity to provide, because no entity can provide 100% reassurance it's going to be there in 40-50 years. None. Not government, not an individual, not a foundation, not a company, none. There is no way to put an obligation on future humans that the future humans can not do some combination of repudiation or simply failing to be able to meet them. It is already looking to me very likely that if the US does have continuity up until my retirement, still ~20 years away, that while it may nominally provide all the "dollars" it promises I will receive, that those dollars will be not worth very much. There's more than one way to fail to make good on promises and confusing people about "give me $20 today and I'll give you $50 in 40 years" is one that still gets almost everyone... that sounds fantastic to most people and it's actually terrible, if the government also controls what dollars are worth.
jmclnx 2y ago
Yes, very good news, but I wonder if this can and will be appealed. If it hits the US Supreme Court, we can guess what will happen :(
legitster 2y ago
This is highly misleading. The fund is solvent and also guaranteed by the federal government right now.
ars 2y ago
I didn't watch the video, but the Pension Benefit Guaranty Corporation would pay him if Yellow Trucking didn't. The argument is about the source of the money, not if they'll get paid. > how it is legal to just take it away randomly That's not what's happening. It's not random, the company has no money, so it can't pay. Instead the PBGC will pay in such a situation (companies pay an insurance premium to it, in case to go under). This particular argument is about leftover money - how much should go to which company, it's not about the individual retiree.
algaeselect 2y ago
Having control of your own destiny (whether in a 401k or an equivalent handled by the government on your behalf) is much better. With a pension, you may have to stick with the same company, or the company could mismanage the pension and go backrupt and try to dump the pension on the federal government, which may not pay out at 100% (especially if too many companies try to discharge their pension obligations this way). I actually think a government run program that taxes employees and puts it in the S&P 500 would be a better system. No need for these pension-runners to be earning fees.

rwmj 2y ago

In the UK after a number of scandals of this type, these kinds of "defined benefit" pensions are now backstopped by a government agency (paid for by a levy on all pensions): https://en.wikipedia.org/wiki/The_Pensions_Regulator https://en.wikipedia.org/wiki/The_Pensions_Regulator (edit: actually it's the https://en.wikipedia.org/wiki/Pension_Protection_Fund https://en.wikipedia.org/wiki/Pension_Protection_Fund which does the backstop but the two bodies are related) There is a conflict of interest here, but regular employees aren't able to evaluate that.

ryandrake 2y ago

We don't really know yet if the 401k experiment is going to be successful. People retiring right now are by and large the earliest beta testers of the 401k idea. My parents and their parents had typical Defined Benefit pensions, and they were all able to simply enjoy their retirements without having to lift a finger to understand the stock market and index funds and tax rules and without needing to micromanage some brokerage account. They never had to worry about contribution limits, IRAs vs. 401k, Roth vs. non-Roth, asset allocation, the right investments for pre-tax vs post-tax money, rules about withdrawing contributions vs. earnings, having to guess what year they'll die to pick the right draw-down rate. They just worked, retired, and money magically came in. You have to admire the simplicity.

toomuchtodo 2y ago
> We don't really know yet if the 401k experiment is going to be successful. Unlikely, based on the data. https://news.ycombinator.com/item?id=41488940 https://news.ycombinator.com/item?id=41488940 (citations from a previous comment I wrote)
- datavirtue 2y ago
  401ks are great, if you know what you are doing. I consider it a miracle if a blue collar worker has a 401k, is actually putting money in it, AND has the funds allocated to an appropriate fund AND hasn't withdrawn it a few times in some cockamamie attempt at making a smart financial decision like: paying cash for a truck so they don't have a payment. Our public school system has failed. Full stop.
  - deleted 2y ago
    [deleted]
  - missedthecue 2y ago
    Public schools successfully teach most Americans to read and do basic math. Being able to read and do math is all you need to navigate the greater part of modern society. Putting 15 year olds into a personal finance or home economics class can be productive, but we can't expect high school to teach you what to do in every possible scenario you'll encounter in life. At some point you're going to have to read and do a little bit of math.
    - ghaff 2y ago
      I'm certainly not opposed to having a home economics class even in a college prep curriculum. Throw in some stats while you're at it and maybe some cooking lessons. But that doesn't stop people from being greedy and stupid like a lot of the tech folks during the past couple decades or so. Yeah, some won big, but so do some people who play the lottery every week. And sometimes it even makes sense to roll the dice a bit.
    - PaulDavisThe1st 2y ago
      Pretending that successfully managing investments during 40+ years of working life so as to provide a reasonably comfortable requirement just requires "a little bit of math" is disingenuous in the extreme.
      - datavirtue 2y ago
blackeyeblitzar 2y ago
Can you clarify what you’re referring to with defined benefit? I am really looking to make it so that companies don’t hold pensions hostage. I think they should be putting money into some outside thing that is independently managed
- garciasn 2y ago
  The retirement payment is based on the employee's work history, age, and earnings, rather than on investment returns.
  - ghaff 2y ago
    Right. And there are some (fairly significant) protections these days. Learned recently that my pension which was farmed out to an outside benefits company at one point is now being farmed out to an insurance company TBD. I'm not especially concerned. The risk seems fairly low and I'm not really dependent. But this is the plus and minus of defined benefits versus something like a 401(k).
- Arainach 2y ago
  Retirement plans are defined benefit ("employee will be paid $X per time period during retirement") or defined contribution ("the company puts $Y per time period into this retirement vessel"). https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/cash-balance-pension-plans https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/...
missedthecue 2y ago
The main reason 401k wouldn't work is if people ignore and neglect it until they're 60 years old. Sadly a lot of Americans do this. This could be solved by making contributions mandatory like Australia and Singapore. As long as you're putting money in, the rest is just math + time.
- deleted 2y ago
  [deleted]
- unyttigfjelltol 2y ago
  Or a custodian steals the money. Or the beneficiary selects poor investments. Or their employer doesn't do a generous match. Or the retiree switched jobs a few times and never fully "vested" in employer contributions. Or the market doesn't make the "math + time" formula work quite right. Or they couldn't contribute at various times due to family or health emergencies. Or all of these things.
  - missedthecue 2y ago
    Most of these points apply to pensions too. Getting laid off two weeks before your pension vests is an all too common story. Companies go bankrupt and the judge rules the opposite of what he did here. Pension plans themselves can go bankrupt, and although they're insured, it's only up to a certain limit. And most of your 401k is going to be the money you put in, not the match anyway. So it sucks when you aren't able to vest or your employer doesn't match well, but that doesn't kill the concept. The formula is proven to work in other countries. My point is you can't refuse to use a defined contribution scheme and then complain it didn't work.
  - jellicle 2y ago
    "my retirement is safe and secure, I've invested with Crypto401K"
office_drone 2y ago
If it doesn't work, we can always go back to the pre-finance retirement model - raise lots of kids and live with them during a 'retirement' in which you continue to work as much as possible.
ghaff 2y ago
Defined benefit plans mostly work OK (with some bankruptcy exceptions modulo various legal protections) for people working a decade or two for a firm. Probably not great benefits but I know I wasn't even thinking about my pension early career. So now it's essentially free money from mental accounting perspective. 401ks require deliberate action which a lot of people won't do or at least put off and they may make poor investment decisions--like invest everything in their own company's stock if that's an option.
jancsika 2y ago
> We don't really know yet if the 401k experiment is going to be successful. Wouldn't there have been some segment of the population with about 25 years of 401k by 2008? It should be possible to compare them retiring during the downturn to people living off their pensions.

jncfhnb 2y ago

A pension plan is guaranteed. A 401k is not. A pension is theoretically much better because the company must pay you the money even if the investments didn’t work out. Contingent on the pension being there at the end of your career it’s much better. YMMV on getting a worse deal with a 401k that is more secure. They can’t “take it away”. They just ran out of money with the judge ruling that shareholders don’t get priority access to what’s left.

bb88 2y ago
Look at United Airlines. UA didn't fund the pension plan, then declared bankruptcy in 2005 primarily to get the $10B pension off it's books. Now that UA is profitable again, it's under no obligation to fund the pension plan it discharged from it's 2005 bankruptcy. https://www.pbgc.gov/wr/large/united/united-airlines-plan-restoration https://www.pbgc.gov/wr/large/united/united-airlines-plan-re...
- toomuchtodo 2y ago
  We're doing better. Just have to keep grinding.
blackeyeblitzar 2y ago
Didn’t Boeing get rid of its pension plan? I don’t know the details but at least news interviews of striking union workers made it seem like a pension that they had worked for previously was then taken away, which seems unfair.
- jncfhnb 2y ago
  A quick Google suggests they stopped offering it and moved to a 401k, not that they just canceled their existing obligations. This is generally the popular move because pensions plans create huge liabilities over time because you’re promising a final outcome rather than a promised level of funding.
  - ghaff 2y ago

tezzer 2y ago

Pensions pay (paid?) regardless of how the stock market is doing, and they pay for life. They grow with inflation, and you don't need to know anything about stocks, markets, funds, rebalancing or anything else to benefit. It was an elegant weapon for a more civilized age. If it wasn't mismanaged and raided. Incidentally, today only 1/3 of working Americans have 401ks.

ghaff 2y ago
"More civilized age" also mostly meant people working for an extended period of time, e.g. 10-years plus, for a single employer. And, even if an employer doesn't offer a 401(k) these days, there are generally other tax-advantaged savings mechanisms although they, of course, don't get employer contributions.

CharlieDigital 2y ago

> Why isn’t the model just to pay employees more and let them save to a 401k that they control? If you really want to understand this, it's probably worth your while to check out the Frontline piece The Retirement Gamble[0] But a few key takeaways: 1) the 401k was never designed to be a general purpose retirement plan, 2) you would expect professional fund managers to be better at maximizing returns compared to a trucker selecting their own individual funds..., 3) if they even voluntarily invest in it in the first place. The purpose of the pension is that a pool of employees collectively invest a portion of their income by hiring professional investment managers that ostensibly know what they are doing and can stay abreast of the market. They design short and long term investment strategies to meet the defined obligations of those pension contracts. The 401k is not the same thing; we are placing the onus on the individual to research funds, understand the market, re-balance their portfolio. And in the event of a recession, the individual might be SOL if they are dependent on that portfolio. Next time you're at a rest stop, take a sampling and see how financially literate they are and how much they know even about mutual fund selection. [0] https://www.pbs.org/wgbh/frontline/documentary/retirement-gamble/transcript/ https://www.pbs.org/wgbh/frontline/documentary/retirement-ga..., https://www.pbs.org/wgbh/frontline/documentary/retirement-gamble/ https://www.pbs.org/wgbh/frontline/documentary/retirement-ga...

snarf21 2y ago
Fair enough, but we also know that an index fund beats "professional investment managers" over any reasonable time horizon. Warren Buffet bet a million dollars that this is true and won. The big problems with a pension is the rent seeking by all the brokers and "professionals" just for the employee to earn less than the index and if there is a recession, you need more new employees to prop up and bail the pension out (pyramid scheme). Why not just have something like SIMPLE+ and you get a matching percentage that has to be a major index and you can't move it out until retirement when you can roll to your own devices and whims. The employees and their families would see a net benefit of such a mechanism.
- ghaff 2y ago
  Companies do restrict 401(k) options. Of course you could restrict even further but a lot of employees complain (loudly) that they don't have a broader array of investment options.

throw0101a 2y ago

> I don’t really understand the pension model or how it is legal to just take it away randomly. Why isn’t the model just to pay employees more and let them save to a 401k that they control? 1. It is not legal to just take it away, as this ruling kind of indicates. 2. Most people are absolutely at (a) putting aside money, and (b) investing it properly. See for example "Retirement Crisis: The Great 401(k) Experiment Has Failed for Many Americans": * https://www.nbcnews.com/business/retirement/great-401-k-experiment-has-failed-many-americans-n327321 https://www.nbcnews.com/business/retirement/great-401-k-expe... Doing a search for "401k experiment has failed" will give lots of results.

blackoil 2y ago

Why is pension managed by the company, wouldn't a national pool be better? In India in the latest system, employee pays some, company adds some and from the money collected over lifetime, the pension will be given. The fund is managed by central government.

know-how 2y ago
[dead]
stvltvs 2y ago
For the US, you're describing the Social Security program more or less which almost all workers participate in. The benefits aren't enough to live comfortably on, so people need to supplement it with something else.
- ghaff 2y ago
  A lot of people complaining about the downsides of company-sponsored defined benefit programs (which are significant) basically just want higher social security payouts (and presumably associated taxes).

jerf 2y ago

It isn't legally possible to "just" take a pension away. However, it is not economically possible to deliver defined benefits into an uncertain future. The collision of the unstoppable force of law and the immovable rock of economic reality creates a great deal of excitement and uncertainty. Also rather a lot of those "heat and not much light" arguments, as people speaking in one of those two frames argue with someone else in the other and they end up talking right past each other.

_DeadFred_ 2y ago
I agree with your point that delivering on this is an impossibility for business, which inherently means it's an even bigger impossibility for individuals (if a huge corporation can't figure it out, Bob working on the line definitely can't) and should therefore be moved to the government as the other option (Logan's running everyone) is going to be a really hard sell.
- jerf 2y ago
  Government can't do it either. Defined benefit is impossible for everyone. "Government" should be understood as a general term, not just "The US government" or whatever Western country you may live in. How many governments have fallen in the past 20 years? Probably more than you may realize. How sure are you that "the government" you live under will be there in 30 years? There's an awful lot of stress in the world right now. And I'm not even talking about governments providing pensions, I'm talking about the fact you can't even count on them to exist. They still can't provide the impossible after that and promise absolutely defined benefits. Although this is a non-trivial part of why defined benefit is impossible for any entity to provide, because no entity can provide 100% reassurance it's going to be there in 40-50 years. None. Not government, not an individual, not a foundation, not a company, none. There is no way to put an obligation on future humans that the future humans can not do some combination of repudiation or simply failing to be able to meet them. It is already looking to me very likely that if the US does have continuity up until my retirement, still ~20 years away, that while it may nominally provide all the "dollars" it promises I will receive, that those dollars will be not worth very much. There's more than one way to fail to make good on promises and confusing people about "give me $20 today and I'll give you $50 in 40 years" is one that still gets almost everyone... that sounds fantastic to most people and it's actually terrible, if the government also controls what dollars are worth.

jmclnx 2y ago

Yes, very good news, but I wonder if this can and will be appealed. If it hits the US Supreme Court, we can guess what will happen :(

legitster 2y ago

This is highly misleading. The fund is solvent and also guaranteed by the federal government right now.

ars 2y ago

I didn't watch the video, but the Pension Benefit Guaranty Corporation would pay him if Yellow Trucking didn't. The argument is about the source of the money, not if they'll get paid. > how it is legal to just take it away randomly That's not what's happening. It's not random, the company has no money, so it can't pay. Instead the PBGC will pay in such a situation (companies pay an insurance premium to it, in case to go under). This particular argument is about leftover money - how much should go to which company, it's not about the individual retiree.

algaeselect 2y ago

Having control of your own destiny (whether in a 401k or an equivalent handled by the government on your behalf) is much better. With a pension, you may have to stick with the same company, or the company could mismanage the pension and go backrupt and try to dump the pension on the federal government, which may not pay out at 100% (especially if too many companies try to discharge their pension obligations this way). I actually think a government run program that taxes employees and puts it in the S&P 500 would be a better system. No need for these pension-runners to be earning fees.