Employees used to get pensions, have reasonable work hours, a reliable schedule and could afford to have a parent stay home in their 3-4 bedroom house on an acre.
When all that goes away and I have to work harder for less than my parents got then what is the point of being loyal to psychopathic companies with excruciatingly well documented histories of treating employees like interchangeable chattel? Loyalty ain’t gonna give these monsters any pause when they put the squeeze on me and the other numbers on their screen while they fantasize about how to blow their ill gotten gains.
Pensions are not relevant anymore. I see no reason to pay a defined benefit pension fund’s employees and expenses when I can simply buy VOO or a target date fund at one of many brokerages for basically free. And I get to avoid the risk of a corrupt employee of the employer messing with it, or to risk the employer not being around 50 years later.
The other parts of the post have so many factors that contribute that it is not related to employer employee social contracts. Birth rates, relative developed-ness of other countries, supply and demand of labor, automation, political winds, societal changes, etc.
Stated as fact without evidence. Many people are still paying into pensions and many more would like too. Think blue collar and gig workers who scrape by on a small fraction of what many outspoken people here take home.
>I see no reason to pay a defined benefit pension fund’s employees and expenses when I can simply buy VOO or a target date fund at one of many brokerages for basically free.
Because you’re highly compensated and have the buying power of X median income households. Median income households need to retire too. What’s your solution for them if not pensions.
>And I get to avoid the risk of a corrupt employee of the employer messing with it, or to risk the employer not being around 50 years later.
Pensions are supposed to legally outlast employers. Judicial failure to enforce that is evidence of a corrupt and politicized judicial branch that is actively waging class war against those with lower economic status.
>The other parts of the post have so many factors that contribute that it is not related to employer employee social contracts. Birth rates, relative developed-ness of other countries, supply and demand of labor, automation, political winds, societal changes, etc.
All of these factors you mentioned have been politicized and exploited to manufacture consent in the American public to vote against their own interests as bought and paid for politicians, judges, journalists, prosecutors, and lawyers sell out their own economic cohort to, for the sake of brevity, make the rich, richer.
I’m happy to flesh out how each factor you named has been weaponized if you’re genuinely curious.
The government redistributing wealth, i.e. Social Security. A federal defined benefit pension plan, if you will. And if it were up to me, I would take it even further and make it universal basic income.
> Pensions are supposed to legally outlast employers. Judicial failure to enforce that is evidence of a corrupt and politicized judicial branch that is actively waging class war against those with lower economic status.
Decades and decades of evidence indicate that the system does not work. But more importantly, automation and technology have obviated employer sponsored defined benefit pensions.
There is no value add from having employers in the middle of the wealth transfer chain. It is just extra paperwork and overhead and chances for corruption.
The pension funds invest in the same place as everyone else, the stock and real estate market. And then the government comes and bails out asset owners time and time again, so that the pension recipients get bailed out. But then why not hand the pension recipients the cash directly?
That said, defined benefit pensions were always designed around the idea that you'd be staying in the same place for maybe decades. Federal government pensions are perhaps the most obvious example but it applied to many companies as well. And that just doesn't represent typical behavior--especially among professional workers--these days.
These are very different with respect to longevity risk. There are many people who can’t save enough individually for the longest lifespan. (Or the 80th percentile) But could save enough for the cohort.
Pensions are far superior in this scenario. That’s part of the reason why 401ks make sense for highly compensated, but not the majority.
There is no reason to have a ton of employers get involved in the wealth transfer system. It adds so much unnecessary complexity, bureaucracy, agency risk, not to mention the longevity risk of a single employer surviving for 50 more years. And on top of that, the only thing the employer’s pension fund is doing is investing it in the same market that the beneficiaries can invest in themselves without having to pay overhead.
I would take a defined benefit pension from the federal government (or any other entity that can print money), but any other payout promised decades in the future is just as, if not more, risky as investing in an index fund, because you give up control of the money.
