2 ms·
Pensions? You’re not from the U.S., are you?
by dcrazy 3mo ago
Pensions? You’re not from the U.S., are you?
- IOT_Apprentice 3mo agoI am from the USA and 401k + IRAs are the terms here and yes they are going to be used. Your point?
- dcrazy 3mo agoThere’s a relevant structural difference between 401(k)s/IRAs and pensions. You get to choose how to invest your personal retirement accounts, while pensions are institutional investors with active managers. An individual retiree can adjust their retirement account’s risk profile over time, but a pension fund needs to be generating sufficient revenue to cover any upcoming disbursements. There are also often other constraints on the pension fund, such as being substantially invested in the sponsoring company or only investing in investment-grade securities. If a single significant investment blows up, this can threaten the solvency of the fund for all beneficiaries. There have been pension funds that have zeroed out their unvested beneficiaries due to insolvency. My point in bringing this up is that the fact that most American retirements are self-directed rather than fixed-benefit means that the catastrophic scenario implied by the OP is less likely.
- gipp 3mo agohttps://fred.stlouisfed.org/series/BOGZ1FL594090005Q https://fred.stlouisfed.org/series/BOGZ1FL594090005Q Pension funds hold $30 trillion, my guy. Even restricting to only defined -benefit funds it's 7T.