4 ms·

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 wo

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
    Which is extremely common. A ton of companies moved away from defined benefit plans. There's still on the hook (in general) for existing obligations; they can't just go "never mind" for the most part. They've just focused on different retirement benefits going forward.
sokoloff 2y ago
> A pension is theoretically much better because the company must pay you the money even if the investments didn’t work out. A 401(k) is theoretically better because you can pass the unspent amount to your heirs. (I make this post to point out that it’s a tradeoff, not that one is dominant over the other for all people/situations.)
- whartung 2y ago
  I think that depends. My Mother-in-Law continued to receive pension benefits from her late husband after he passed. I'm sure it depends on the pension and such.
  - sokoloff 2y ago
    Surviving spouse benefits are fairly common. That’s different from inheriting the unspent account balance in a 401(k) [such as by your kids and, of course, if there is any].
    - ghaff 2y ago
      When I elected to start taking my pension I think there was an option to take a lower amount with a surviving spouse benefit. (Same is true for another annuity I have.) Different, as you say, from a pool of money that's "yours" with whatever tax consequences may be involved.

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
  Which is extremely common. A ton of companies moved away from defined benefit plans. There's still on the hook (in general) for existing obligations; they can't just go "never mind" for the most part. They've just focused on different retirement benefits going forward.

sokoloff 2y ago

> A pension is theoretically much better because the company must pay you the money even if the investments didn’t work out. A 401(k) is theoretically better because you can pass the unspent amount to your heirs. (I make this post to point out that it’s a tradeoff, not that one is dominant over the other for all people/situations.)

whartung 2y ago
I think that depends. My Mother-in-Law continued to receive pension benefits from her late husband after he passed. I'm sure it depends on the pension and such.
- sokoloff 2y ago
  Surviving spouse benefits are fairly common. That’s different from inheriting the unspent account balance in a 401(k) [such as by your kids and, of course, if there is any].
  - ghaff 2y ago
    When I elected to start taking my pension I think there was an option to take a lower amount with a surviving spouse benefit. (Same is true for another annuity I have.) Different, as you say, from a pool of money that's "yours" with whatever tax consequences may be involved.