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Comment by joeyrideout | Hacker News Reader

Not any more... "The percentage of workers in the private sector whose only retirement account is a defined benefit pension plan is now 4%, down from 60% in the early 1980s. About 14% of companies offer a combination of both types." [1]

[1] https://money.cnn.com/retirement/guide/pensions_basics.money...

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I mean that in common vernacular, when someone says "pension", they are referring to a defined benefit pension. Otherwise, in the US, we use 401k, IRA, "retirement funds", or other words.

And a 401k and IRAs is are very poor "pension" plan compared two other countries.

I'm not sure what you're claiming. It's possible to design a very lucrative and costly defined benefit pension, but in the US, no employer is offering it other than governments, and even the governments are beginning to croak under the stress of unsustainable benefits, so new employees are not eligible for them.

I was comparing the US DC (401k) vs say the UK (A Group Personal Pension or a SIPP).

Based on some quick Googling, I don't see what is so much better about an SIPP or a group personal pension plan? SIPP offers some kind of matching from the government, but it doesn't seem significant.

Main one is Tax relief at your highest rate on income tax you get an extra 20% into your pension - if your a higher rate tax payer you can reclaim the extra tax relief.

For a higher rate taxpayer you put in £60 and get £100 in your pension.

You can also do salary sacrifice and reduce you income tax and NI lability

Unless your retirement tax rate will be lower than your working years rax rate, it comes out in the wash eventually.

It's quite likely that some people today will end up paying higher income tax rates in retirement than today.

Id like to see that worked out in detail have you got an example? unless you mean you bust the lifetime limit, which is just bad planning.

And you can use drawdown to manage your income from the pension and you would of course make use of income from your ISA.

I don't know anything about the 401k system, but the money going into my pension is from my gross salary. Combined with high taxation, it means that it's worth up to twice as much going into my pension as it would be going into my bank account.

SIPPs are beyond my lifestyle.

It's the same in the US.

All that tells me is that there are no more pensions, not that the definition has changed. Employers are contributing money now, but have pushed any risk onto the employee, making it feel pretty worthless as a retirement strategy.

> Employers are contributing money now, but have pushed any risk onto the employee, making it feel pretty worthless as a retirement strategy.

You seem to be arguing that saving for retirement is futile. You can invest is (almost) arbitrarily low risk to principal investments like US treasuries. I probably wouldn't advise that as the sole investment strategy for most people. But it is one way to reduce certain types of risk. (And most defined benefit plans have the same risk with respect to inflation.)

I think all they're arguing is that the word pension =~= "defined benefit retirement plan".

I don't think I've ever heard someone refer to their 401k as a pension

I think they use the word "pension" for defined contribution retirement plans in the UK since they, of course, don't have the US tax code section 401k.

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