Retirement funds are a scam: when prices go up, funds manager take their bonus, when it goes down, the funds shareholders (that is, everyone) swallow up the loss. It even a double-edge scam, because now people are supposed to stand up for the finance behemoth because they holds their retirement hostage.
Within the United States, you will have a hard time finding a company with a traditional pension system. Almost all use 401(k) or similar retirement systems. If it is a scam, it is a well-supported scam.
Companies switched to 401ks from pensions precisely because it's a scam. With a traditional pension, the company needs to guarantee the availablity of funds for retirees. With a 401k, each individual employee is required to gamble their life savings on the stock market.
The result is that the company doesn't need to give a damn about long-term stability, they can focus on short-term gains for a carousel of owners that each demands a quick return and cash out. As a bonus, the 401k system forces the government to bow to the whim of the stock market because every citizen is now clinging for dear life onto the same mechanism the owning class use to grow their hoards.
It's a win-win-win for the rich:
* they don't need to pay retirees
* they can squeeze more money out of companies at the expense of customers, workers, future owners, and the environment
* they can get leverage over the entire society by credibly threatening the lives of millions of retirees dependent on their table scraps
No, they can't. In a bankrupcy, pension funds get first dibs on all company assets, before lenders, shareholders, or any other interested party. A company has to be really, really fucked for their bankruptcy to not produce enough money to fund the pension.
And in the rare event that that happens, pensions in the US are required to hold pension insurance, which continues to pay benefits when a pension loses income and their coffers run dry.
My grandpa is still getting pension checks of around 40k/yr from the Pullman Car Company, which went bankrupt in 1968. Pensions are, very literally, guaranteed retirement income.
> In a bankrupcy, pension funds get first dibs on all company assets, before lenders, shareholders, or any other interested party.
No, they aren't; funds already in the pension fund are separate and can't be taken in bankruptcy; wages owed have the kind of high priority claim you reference, but earned pension obligations do not. A bill was put forward in Congress in 2019 to alter this for Chapter 11 bankruptcies (to eliminate the “strategic bankruptcy to cut pension contributions” practice that explored the fact that it is not true), but died.
Plans are typically terminated by a Chapter 7 bankruptcy, and can be terminated or modified in a Chapter 11.
> And in the rare event that that happens, pensions in the US are required to hold pension insurance, which continues to pay benefits when a pension loses income and their coffers run dry.
Aside from the fact that the PBGC multiemployer fund is itself underfunded, PBGC has an age-based maximum benefit guarantee, which will often be significantly lower than what a pensioner would have been entitled to under their original pension plan:
Pensions funded by current workers towards the pensioners are also very widespread worldwide, doesn't mean they aren't an unsustainable practice.
The same can be the case for 401(k)s and similar systems. And I say that living in Sweden where the majority of my pension will consist of funds that I can manage myself the split, so I should believe in this system for my own sake.
