4 ms·

Yes. Don't most funded startups have 401Ks?

• japhyr 13y ago
  There is a huge difference between a pension and a 401k. If my understanding is correct, an employer only contributes to an employee's 401k while they are working. There is no future obligation to the employee. An employer who offers a pension effectively says, "if you work for me x years, I will continue to pay you y salary for the rest of your life."
  • adw 13y ago
    Isn't that a final-salary pension as opposed to a defined-contribution pension? They're both pensions. (Though I agree a final-salary scheme is much more attractive, and as it happens, I have a couple of years in one from an old gig.)
    • jeffdavis 13y ago
      A 401(k) is essentially just a retirement savings account. Money goes in regularly, the account has a specific balance, and any future obligations are managed in a well-defined way by a bank or brokerage. There is no opportunity to conflate the performance of the business with the ratio of savers to pensioners or with the performance of the investment itself. The other kind of pension, which we generally hear about in large companies or governments, is indistinguishable (to me) from accounting fraud. The whole point is to make the business (or government) look better today, and make big promises today, and hide the costs and obligations far into the future with optimistic projections. I am not a lawyer or expert on this matter.