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The "5. The Human Wreckage" section is probably the most interesting - on paper, everyone came out much worse (losers identified are workers, pension holders, s

• rlkf 1y ago
  In Norway, the companies are required by law to pay the pensions into a special type of investment account where withdrawal are not allowed until you are retired, but you can choose your own investment profile: A mandatory 401k. The arrangement where the _company_ controls the account seems to me to be more of a allowed delay in salary payout, to the benefit of the company, than a retirement account for the employee.
  • varjag 1y ago
    The savings are managed by bank or insurance companies' subsidiaries who are entirely unrelated to the employer. In other words it has nothing to do with mid century corporate pensions.
  • lazide 1y ago
    The real fun situation is when the 401k requires mandatory investment in the company stock. None of the responsibility, all the moral hazard.
    • collinmcnulty 1y ago
      This was made illegal in the US after Enron.
      • tartuffe78 1y ago
        For now
        • creaturemachine 1y ago
          Except this time around it'll be mandatory Trump coin
  • mystified5016 1y ago
    The traditional way pensions were handled in the US was directly by the company and paid from company coffers. In those days, the goal of any company was to stay in business long term. One of the ways that was accomplished was by making a lifetime career with the company as attractive as possible through generous pensions. In modern times, retirement is pretty much exclusively through private investment accounts (401k and similar) into which your company may directly deposit funds. Nowadays it'd be a crazy risk to pin your retirement 100% on a single company. The company could fail, raid the pension fund, or just decide to not pay anymore. All those things happened and that's why we use private investment accounts now. There are still some traditional pension plans, notably the US postal service. But they're very rare now.
    • dowager_dan99 1y ago
      most companies converted from pensions to self-directed plans because the cost of any benefit is essentially free compared to a defined benefit pension plan.
  • kelseydh 1y ago
    Australia has a similar system called Super. On top of base pay, every Australian employer has to contribute another 11.5% of a person's salary into an employee-controlled Super investment fund that the employee can only touch upon retirement or severe illness. It's a great system.
    • robocat 1y ago
      New Zealand copied it, except employee has to pay 3% (now just increased to 4%) and employer matches. What happens with contractors in Oz? I know a nurse over there on high hourly rate, and I'm guessing part of the reason is to avoid employer contributions. Is there a strong push for contractors throughout the Oz economy (not just government)?
      • bigfatkitten 1y ago
        Most contractors “work” for a payroll firm that manages this for them, which is usually the recruiting firm that put them into the role. For tax and superannuation purposes, they are PAYG employees in non-ongoing positions.
• WalterBright 1y ago
  The free market is a chaotic system of creative destruction. Expecting a company to still be solvent decades from now is naive. Tying your investments in with the same company that provides you a job is also risky. Defined contribution is a much less risky retirement scheme.
  • ghaff 1y ago
    There are various protections to defined benefit these days. I get one from a company that is long gone. But certainly not perfect.
  • _DeadFred_ 1y ago
    The 80s were a different time. There were no index funds. No discount brokers. No internet. But from the 1800s up until the 1980s lots of people retired successfully and lived quite well via investing in a single company and receiving dividend returns from that company. But that was back when the stock market wasn't just short term gambling and short term stock manipulation via corporate stock buybacks and you actually invested in strong companies that you planned to hold through retirement. Funny what incentives get you. We had incentives for long term consistent strength (people holding stocks for dividends) and got it. Today we hold for short term gambling profits so we get gambling style shell games of companies.
• potato3732842 1y ago
  >However it is important to recall that the people who actually made all the money extracting the wealth got out years before, retiring and/or selling stock. They're bystanders now and probably happy to run the whole operation again. And therein lies the problem with modern society. Whether you're an MBA wrecking a company or a voter wrecking the local economy there is no mechanism for the people who you've wronged to get at you so there's no incentive not to behave that way.
  • eadmund 1y ago
    Be very very careful about what you wish for: your definition of who’s wronged whom and others’ definition of who’s wronged whom are going to vary, and often be in direct opposition.
    • LocalH 1y ago
      That definition should always favor the small guy over the megarich. It should be inverse of the situation's power balance.
      • DocTomoe 1y ago
        But then, before you know it, you’re back in the terror phase of the French Revolution—because once the guillotine demands to be fed, “the powerful” quickly becomes “whoever we don’t like.” After several iterations of this pattern throughout our history (other examples are the Leninist/Stalinist purges or the McCarthy era), perhaps it is time we seek a better path—one that doesn’t end up written in the darker pages of our history books.
        • toyg 1y ago
          Well, one side of the struggle has all the means and time to find this better path. Are they doing that? No. So why should the weaker, poorer side do it ...?
          • 1y ago
• ghaff 1y ago
  I do understand the argument that a lot of people won’t really save money left to their own devices. And I’m not unhappy to be receiving a modest pension from a decades ago job I probably didn’t give more than a minute’s thought to at the time. But don’t really disagree that for people who are reasonably disciplined about savings, getting the money as salary is probably the better deal.
  • bombcar 1y ago
    Disciplined people will almost always do well (ignoring unfortunate circumstances, mainly) - it's the undisciplined that the system has to be sure to protect. Of course, the goal should be to turn undisciplined people into disciplined ones over time.
    • datavirtue 1y ago
      These people are "undisciplined" because they have no idea how profitable investing is. Neither do educators (pensioned) and a lot of people have an ingrained misconception that you are going to lose money "in the stock market." They hear of possible returns like 10-15% and shrug and look at bear markets as harmful to their wealth. Really an education issue but it is complicated. Stuffing money in a mutual fund is risky and also not an option if you are behind. A lot of people are behind.
      • ghaff 1y ago
        A lot of people will basically say maybe next year but I'm totally strapped right now. Perhaps after I've paid off my credit card--and in that respect they're likely not even wrong.
      • kelseydh 1y ago
        It is difficult to be "disciplined" when you are trying to afford the rising costs of rent, car payments, childcare, and food. A majority of people live pay cheque to pay cheque, and are lucky to save a few thousand dollars.
• tbrownaw 1y ago
  > Although as an aside who these people are who think corporate pensions are a good idea is beyond me. Ignore the practicalities and look at the story. They're a promise that someone stronger than you will provide for you in your old age.
  • 01HNNWZ0MV43FF 1y ago
    It probably looked like a good idea when companies presented themselves as immortal institutions. I've never worked for a company that big
  • WorldMaker 1y ago
    The story also included for many years that the collective investment was stronger than the individual investments could be. A hedge fund with a bigger wallet could have more options, could have more bargaining power, could have access to investment deals that are out of reach of one individual's savings. That's a powerful story. We saw so many of the things that can go wrong, especially in 2008, but the raw idea of a larger pension fund is cheaper to run and has more financial leverage is still a good story with some truth behind it. (As an individual investor, I do often wonder what sort of bargains and better investment options I miss out on that investing together with two or three friends with similar retirement goals could gain me by investing together as a team. I realize that's the point of hedge funds/mutual funds, but today's hedge funds/mutual funds themselves have tiered fee structure pools based in staked investment and it never feels like an even playing field if I'm trying to manage my own investments even with the competition between hedge funds/mutual funds today.)
    • datavirtue 1y ago
      Oil and Gas ventures. You have to be an accredited investor to buy in and boy oh boy is it a juicy deal. Income tax is capped and ALL invested capital can be written off immediately (you get it all back plus profits) and there are other benefits I'm forgetting.
• _DeadFred_ 1y ago
  In the 1980s there were no index funds. There were no discount brokers. There was no internet. Joe Average factory worker was not capable of picking up a phone during work hours to call his broker and manage his investments. There was not tax deferred IRS blessed retirement vehicle until 401ks were officially blessed in 1986. Before 401ks were CODAs which, again, tied a worker to investing in his employer. Retirement planning was whole life insurance and buying physical bonds down at the local bank branch, maybe investing in a single stock that paid a dividend with the hopes you could live off the dividend.
  • datavirtue 1y ago
    They couldn't trade options either. A huge wealth booster or income.