3 ms·

I think the limit on IRA and 401(k) contributions was just a passing comment in the article, not the main point. The main question he seems to be asking is how

by nilkn 14y ago

I think the limit on IRA and 401(k) contributions was just a passing comment in the article, not the main point. The main question he seems to be asking is how the average American is expected to effectively plan for retirement when companies no longer feel they can manage pension funds with professional investors. The real answer to this, IMHO, is that companies definitely could provide pension plans. Some do (Chevron comes to mind). They just don't want to because it's cheaper to just give your employees a 401(k) and only put company money into it if your employees contribute. Companies didn't transition to 401(k)s because pensions were impossible to pull off. They transitioned to 401(k)s because they realized they could still sell their benefit plan as offering a "retirement plan" to their employees, but the majority of their employees wouldn't even utilize the matching, thereby saving them tons of cash.

patio11 14y ago
That's the Snidely Whiplash version. Some other reasons: + The character of work and the workforce changed markedly in America over the years, from an economy where a man employed by BigCo could reasonably be assumed to work for BigCo until the day he died, to an economy where men and women work, labor force participation is often interrupted, and stints exceeding 3 to 5 years at a company are unusual enough to be remarked upon, to say nothing of 40+ years. + Defined-benefits pensions come bundled with a few other expectations, such as lifetime employment and tenure, which are sort of on the outs at US companies. + Defined-benefits pensions are highly correlated to workplaces which are toxic to work in, because you'll frequently find yourself surrounded by clockpunching deadwood whose sole goal in working is not doing anything to upset their chances of making pension. If you've worked in government or a union shop, you know what I mean. If you haven't, try doing software development for a week in a union shop, then evaluate whether receiving a pension is sufficient to have yourself sentenced to doing that for 40 years.

by nilkn 14y ago

patio11 14y ago

That's the Snidely Whiplash version. Some other reasons: + The character of work and the workforce changed markedly in America over the years, from an economy where a man employed by BigCo could reasonably be assumed to work for BigCo until the day he died, to an economy where men and women work, labor force participation is often interrupted, and stints exceeding 3 to 5 years at a company are unusual enough to be remarked upon, to say nothing of 40+ years. + Defined-benefits pensions come bundled with a few other expectations, such as lifetime employment and tenure, which are sort of on the outs at US companies. + Defined-benefits pensions are highly correlated to workplaces which are toxic to work in, because you'll frequently find yourself surrounded by clockpunching deadwood whose sole goal in working is not doing anything to upset their chances of making pension. If you've worked in government or a union shop, you know what I mean. If you haven't, try doing software development for a week in a union shop, then evaluate whether receiving a pension is sufficient to have yourself sentenced to doing that for 40 years.