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Comment by asciident | Hacker News Reader

Cut pensions then. Right now the working are paying full price to the retired. Everyone should get a haircut.

Ok I'll bite on the terms of someone bought into the way things are: pensions are just deferred compensation; by cutting them you would effectively be unilaterally tearing up a contract that both sides agreed to. In addition: pensions are paid for when the work is done, not after the fact.

Pensions are earned when the work is done. They are paid in the future. It's easy to imagine a pension scheme that overpays to the point where the work becomes uneconomical but because the costs are delayed and/or borne by someone else it exists anyway.

Whether it is representative of the average scheme I have no idea. Anecdotally, my grandfather received a 100% of wage pension from the government after 10 years of service started in his mid 30's (Australia). The expected value of that would far exceed any self contribution scheme, even with tax advantages.

Well yes, if people can't pay their rent, then that's tearing up a contract as well. Contracts aren't going to hold either way. Giving pensions a haircut is just a more equitable way to rebalance.

Can't get blood from a stone. If the money isn't there then pensioners are going to take a haircut. That isn't right or fair, it's just reality.

This is why defined benefit pension plans are just too risky for most people. We should shift all retirement plans to defined contribution with individual named accounts. Those are much safer.

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