Would you be willing to elaborate more on this comment?

I disagree with a lot of that. Defined benefit plans make all the sense in the world sort of empirically or like maybe narratively(?), but the problem is that risk isn't handled equitably. 'Unfair' feels like it has more connotations than my liking, but the main source of that feeling imo is that pensions have frequently made implied rates of return that had little to no chance of realization.

It's easy to thumb your nose and say "well that's the company's problem", but what it does illustrate in a more general sense is that counterparty risk is very real, especially in underfunded pensions. While pension plans have a large amount of money saved, the reality of the situation is that part of a pensions mechanics look like a claim on a company's future earnings. That's what grinds my gears about pensions, there's a lot more risk than people think, and it's foolhardy to assume the employer assumes all the risk in theory or practice.

The best thing about the transition to 401ks imo was that it made it abundantly clear that there is a large amount of risk in funding retirement. The downside is yes, companies made it clear they were no longer willing to assume any of that risk themselves.

The same people you get your 401k matching money from when a company goes bankrupt and sells its assets. The money assigned to pensions, like the money assigned to 401ks, should not be something the company can ever take money out of or under-fund.

The money is supposed to be invested in part by the employee and the employer at the time of payroll. This money is then moved to a fund, impossible to be touched by the company forever and ever. The fund invests the money, it grows, and then you can get an income in retirement after many years. The same could be done by the employee itself by just saving part of his paycheck and investing in a mutual fund, but most people don't have the discipline to do that so a defined-benefit pension protect the employee from itself.

That's how it works in other countries like Canada. It's relatively easy and failsafe if well implemented, I really don't understand how it can be legal for a company to access the fund like in the story.

It's a shame so many of them are so badly managed/corrupted though. As usual, most stories about pension failing are about gross mismanagement (not paying into the plan as required) or corruption (drawing into the plan innapropriatly).

In other types of theft, there are mechanism for recovering the stolen assets. It seems like in theory you could hold the CEO, Board, and other people who made money off of the theft of the pension fund responsible and hold them financially liable for making the pension whole.

In practice, this would probably be messy, very costly, and extremely unlikely to happen.