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Comment by jayd16 | Hacker News Reader

Indeed, "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.

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I 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.

When 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.

A 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-differ...

Worse, 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.

Don'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.

I know a teacher but she still has a few years before she'll be eligible.

Which 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.

FYI - 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.

Market 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.

Yes, 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...

No one in tech has a pension.

That is mostly true but not categorically so. I'm in tech and have one, albeit from an older company that's no longer around.

ITT: Americans, Americans everywhere.

Some people I know who are programmers for a defense department company have pensions, 401ks, and bonuses.

this

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