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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
by 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 agoCompanies 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.
- CharlieDigital 2y ago> Fair enough, but we also know that an index fund beats "professional investment managers" over any reasonable time horizon. OK, now couple that with a mandatory contribution + defined benefit calculated by actuaries and you've got a pension except now everyone knows exactly what they're going to retire with and can plan accordingly and, BONUS, they can still contribute into self-managed retirement accounts if they wish to. Pensions provide socioeconomic stability and predictability in a way that a 401k never can.