A defined-benefit pension is a bet that your employer will remain both solvent and completely honest for the rest of your life. This is an enormous risk compared to just having your own personal retirement account.
If you as an individual still want proper longevity insurance and the predictability of a defined-benefit-plan without this risk, just use the personal retirement savings to buy an annuity.
In the UK at least, defined benefit pensions are almost always funded (unless you work for the government) meaning there is a pot of money big enough to meet actuarial estimates of the present value of the obligation.
No it isn't. PBGC, and it's various analogs. Yes, you get a haircut, but pensions are generally insured for that. 401 plans are administered by companies and are funds of funds, at any rate, and you're still just reliant on 1) a different set of companies 2) market values to line up with your liquidity needs.
Also, how are you just ignoring have to rely on the honesty/fiscal stability of the company backing your hypothetical annuity in the space of two paragraphs?
Pensions are disappearing anyway so I feel like we're arguing the nutritional value of eating yangtze river dolphins, but that is because 401 plans are cheaper for employers and there is a lucrative fee structure in administering them, not because of an intrinsic flaw of pensions.
There is no lucrative fee structure if the employer goes with a Vanguard and prob Schwann/Fidelity 401k. In fact, it’s far cheaper than the investment fees charged by pension fund managers and has greater performance. Absolutely no reason to pay all those actuaries and investors when an index funds with zero expenses do a better job over decades long timeframes.
And PBGC is woefully underfunded. It’s already needing a bailout with just a few failing multi employer funds. It’s mostly for show I presume, since this isn’t even the first time it’s getting bailed out.
If you as an individual still want proper longevity insurance and the predictability of a defined-benefit-plan without this risk, just use the personal retirement savings to buy an annuity.