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It's because people live longer. When defined benefits were introduced many people died before retiring, or if they did retire lived a handful of years. Today i
by cmdkeen 12y ago
It's because people live longer. When defined benefits were introduced many people died before retiring, or if they did retire lived a handful of years.
Today it is perfectly possible to live longer post retirement than you spent working in these kind of jobs.
Taken to its logical conclusion if there was a miracle pill that added 50 years to every lifespan the annuity system would implode.
Yet people, being people, don't like to accept that things have changed. They stick to talk of contracts (where it is only accrued, previous years that are contractually earned) without seeing the upside.
Basically you can have this pension and die at 70 or a less generous one and live until 80.
- dalke 12y agoYour argument is that the economic planners of 40 years ago didn't expect this increase in longevity. They knew of course that people were living longer. Do you have any evidence which might suggest that they significantly underestimated the increase? For example, http://en.wikipedia.org/wiki/File:Life_Expectancy_at_Birth_by_Region_1950-2050.png http://en.wikipedia.org/wiki/File:Life_Expectancy_at_Birth_b... shows a pretty linear growth. Assuming retirement at about age 60, http://www.infoplease.com/ipa/A0005140.html http://www.infoplease.com/ipa/A0005140.html says white males in the 1950s had 16 years of life expectancy, and it's 22 years now. Not only is the trend increasing at a relatively constant rate, but living "longer post retirement than you spent working in these kind of jobs" appears to be relatively uncommon. Most people spend about 40-45 years working, and about 1/2 that more on pension. Unless you can point to some really firm numbers, I think you are incorrectly underestimating the expertise of the actuaries of decades ago.