11 ms·
Ummm what are pension funds?
by rusttoxic 7y ago
Ummm what are pension funds?
- sneakernets 7y agoPensions as we know them won't exist in five to ten years.
- drcross 7y agoCould you elaborate please? Genuinely interested to hear your take.
- sneakernets 7y agoNo unions and privatizing government jobs = no pensions.
- DataAF 7y agoThose of us under 30 never knew them either.
- sneakernets 7y agoAnd most never will. The ones left are awful and full of restrictions, and can be taken away at any time for any reason, even if it's illegal in your state.
- jayd16 7y agoIndeed, "what are pension funds"? I don't have a pension. No one I know personally has a pensions. The younger or non-tech people I know have little to none in their 401k.
- animalgonzales 7y agothis
- coldpie 7y agoI entered the workforce about 10 years ago and I genuinely don't even know what a pension is. I know what a retirement plan is, and employer matching. I guess a pension is something different from that.
- gknoy 7y agoA pension is a plan where your employer promises to pay you money _after you retire_, in perpetuity. In the "olden days", or when working for the government, one often would work at the same employer for 20+ years, and a pension is a way for that employer to support you. (My dad has multiple pensions from when he worked at a large company, and then later for the local county government.) In general, it scales up the longer you worked for a company. This was back when companies and employees were "loyal" to one another. That seems to be a lot less common now. https://www.investopedia.com/ask/answers/100314/whats-difference-between-401k-and-pension-plan.asp https://www.investopedia.com/ask/answers/100314/whats-differ...
- ghaff 7y agoWhen people say "pension" at least in the US they usually mean a defined benefit retirement plan, i.e. you get $X/month based on salary and years of service starting at age Y. By contrast, a 401(K) is a defined contribution plan. You put however much money in, maybe get matching, and you can take money out after a certain age based on how much you put in and how much it grew. Defined benefit used to be a lot more common but it's become less so for a variety of reasons including tax law changes. Today you see them mostly in government jobs like teachers.
- Domenic_S 7y agoDon't know any state or federal workers? Traditional pensions are still offered by about 84% of state and local governments. That's cops, teachers, etc.
- jayd16 7y agoI know a teacher but she still has a few years before she'll be eligible.
- ghaff 7y agoWhich is one of the reasons that pensions fell out of favor for employment in the private sector. They were traditionally very oriented towards long-term (a decade or more) employment with a single company. With typical employment in a lot of sectors--certainly including tech--a large majority of workers would basically end up getting little or nothing out of a traditional pension.
- 12xo 7y agoFYI - California teachers do not pay into SocialSecurity. Their pension is 100% on the backs of the tax payers of CA. Market performance is irrelevant as their pensions are paid regardless of performance.
- Domenic_S 7y agoMarket performance is only irrelevant as far as the amount the retirees see on their checks -- it's relevant to CA taxpayers because the money has to come from somewhere if the market underperforms.
- 12xo 7y agoYes, that was my point. The market investments are not what is driving the pension's long term value. The underwriting by the state is what makes it valuable. The markets are simply an avenue for growth, or as was the case in the past, losses...
- dman 7y agoNo one in tech has a pension.
- ghaff 7y agoThat is mostly true but not categorically so. I'm in tech and have one, albeit from an older company that's no longer around.
- gspr 7y agoITT: Americans, Americans everywhere.
- NotSammyHagar 7y agoSome people I know who are programmers for a defense department company have pensions, 401ks, and bonuses.
- 12xo 7y agoWorse, many of those with pensions find themselves one day without one... Look at the hundreds of bankrupt orgs that have somehow, been able to simply walk away from their obligations. The only people who hold pensions these days are govt workers. People who do not contribute to the economy.
- departure 7y agoLess than 13% of US private sector workers participate in pensions plans[0]. [0]https://www.pensionrights.org/publications/statistic/how-many-american-workers-participate-workplace-retirement-plans https://www.pensionrights.org/publications/statistic/how-man...
- Domenic_S 7y agoNearly 22 million people work for the state, federal, and local governments, nearly 20% of the active workforce. https://www.bls.gov/oes/current/999001.htm https://www.bls.gov/oes/current/999001.htm
- tomtheelder 7y agoOkay so adding those numbers with the private sector ones you still get that the vast majority of American's aren't benefiting.
- Domenic_S 7y agoI don't know if I'd characterize 66% of Americans (100% - (public + private)) the "vast majority"...
- ericd 7y agoYou’re also forgetting all the people without pensions, but with IRAs and/or 401ks. And then the many more with brokerage accounts. And young people seem to have jumped headlong into Robinhood.
- 2zcon 7y agoYou're not including the defined contribution retirement plans, which are a vehicle for investment. N.B. I believe 'pension' ≡ 'defined benefit' is an American English thing, which may the source of the confusion. I, my employer, and my provider refer to my private, defined-contribution plan as a pension.
- sneakernets 7y ago