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0 pointsbluGill4mo ago0 comments

> with pensions being better managed than your average human would do.

Only if they are. Some pensions are well managed. Some are not. Some seem well managed for years, but in fact they are not. Some have been well managed for a long time, but someone incompetent gets in power. Can you tell the difference.

Oh, and if you can tell the difference, can you convince everyone else and thus get this fixed? Or will voters be happy with the mismanagement because it is returning great results now on low investment leaving more money to spend on other things now?

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4 comments · 1 top-level

ryandrake4mo ago· 3 in thread

I guess the question is: Will the average person 1. choose to save and 2. invest that savings better than the average pension manager?

I know, I know, everyone on HN is an investing genius and consistently beats the S&P 500, but we're talking average joe.

bluGillOP4mo ago

In the worst case no pension (either personal/private or public) is better than a pension. At least if you have no pension you got to use/spend your money today - it didn't go to whatever the corrupt pension manager did with your money.

Before pension reform in the US I had some distant relative who was laid off 3 months before his planed retirement when the company went bankrupt - it then came out the pension he was counting on was entirely invested in the now worthless company stock. This is the real risk you need to worry about if you have any form of pension.

SpicyLemonZest4mo ago

In principle defined contribution plans should be a good way to split the difference, although I recognize that it's a lot harder politically to make them mandatory than it is for pension contributions.

bluGillOP4mo ago

The question is who is managing the pension. Defined contributions can be a really bad deal if you can't control who is managing the money.

The other major problem with contribution is you don't know when you will die. If I'm going to die at 65 like some relatives I should retire at 50, but if I'm to live to 97 in great health like others I should wait a few more years. (family history says my expected lifespan is about 80, but it follows a statistical curve ranging between 65 and 95 - just like nearly everyone else in a "first world" country). I want a system that acounts for how long I will live and my health and ensures I have plenty of money - group pensions should be really good at that.

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