Hacker News Reader

Comment by TapWaterBandit | Hacker News Reader

Stable pensions are gone because they were built on a ponzi scheme based on a demographic moment in history that has now passed.

In hindsight those stable pensions were actually extremely immoral in a way. They allowed for a demographic moment where a large portion of workers consumed everything they produced with too little saving while supporting a much smaller number of retired and simultaneously telling themselves the next generation would pay for their retirement needs.

Well as 1 millennial all I can say is fuck that. I didn't sign up to support your prolifigacy in your youth and have no intention of doing so (to the best of my ability).

If you want a stable pension alongside an often decades long retirement, then start saving when you're young or have a lot of children to support you.

View on HN

> If you want a stable pension alongside an often decades long retirement, then start saving when you're young or have a lot of children to support you.

I just want to point out that you're largely proving my point. I got started on saving later in my career because the first few years were spent laboring under the idea that pensions existed. (The 401k was rolled out after I got my first job, for example.)

We had the rug pulled, and there are a lot of GenX people who are going to be in a lot worse situation than me, someone who was lucky enough to get into a high-paying career and stay there (that is, I've never been laid off..so far) and deliberately did not have many children or take vacations or have lucked into not getting sick.

We are both in the same boat; you just have the "advantage", useless for anything it is, of never having thought you were on land.

> We had the rug pulled

If by "We had the rug pulled" you mean "the people we intended to force to pay for our pensions said 'no thanks'" then I agree.

I get why you may be upset how it played out because I agree that spending all your money your whole life then forcing other people to pay for your retirement is a sweet deal. But as one of the people who was expected to be paying, I'm sure you'll understand why I'm not particularly sympathetic.

The thing is there's more than enough wealth out there to fund the equivalent of those pensions you're so worried about footing the bill for if the wealthy were taxed appropriately and the "pensions" took the form of a government program like society security (but properly funded with a sane progressive tax system).

But you've fallen hook, line and sinker for the story purposefully seeded by the wealth class (the real wealth class, not the 6-figure salary FAANG 'wealth') to cause the middle class to go to war with each other instead of waging war against their real common enemy.

So well done, hope you enjoy being bent over by the wealth class your whole life because that's what is in store for you.

You don’t understand what a pension is so are reaching misinformed conclusions. A pension is deferred compensation. The employee earns the compensation while working, but agrees to receive the money later. If a person were a car, a pension plan is like paying monthly payments for a car rather than paying the full price of the car at the time of purchase. A company failing to pay a pension is analogous to a person failing to pay a car payment.

This is at best extremely incomplete. Pensions are not some kind of savings account, they guaranteed a rate of return that in retrospect was impractical. They’re now in trouble because that is becoming apparent.

They guaranteed above-market returns based off of the same ever-increasing-pool math that screwed up social security. Why do you think they’re essentially nonexistent now?

“impractical rate of return” is one element of “mismanaged”

Pensions are nonexistent now because other compensation packages have become the norm. Actuarial regulation has changed to incorporate lessons learned from pension fund failures. The goal of the regulatory changes is to decrease risk to consumers in contemporary actuarial products.

That’s about as deep as I can go on this topic. I’m not an actuary, by a number of my friends are and actuaries talk about lessons learned from failed pensions like engineers talk about lessons learned from failed software development projects. Evidently, demonstrating knowledge of those failures and the resulting controls is a key element of earning the title of professional actuary.

Continuing with the car loan analogy, the interest portion of the car loan is similar to the guaranteed rate of return in a pension. If a car company sets up a loan with a bad interest rate the car company will lose money on the sale.

The main difference between car loans and pensions is the time horizon. It’s much simpler to manage the risk of a 3-5 year loan than a 30+ year retirement that begins 45 years in the future.

> Stable pensions are gone because they were built on a ponzi scheme based on a demographic moment in history that has now passed.

They are gone because of a conscious choice, manifested through tax policy, to transfer risk from capital to workers. (To the extent changing demographics would have impacted them in any case, it would have reduced the pension amounts.)

A pension is deferred compensation. It’s money employees have earned that they agree to receive later in life in order to smooth their tax burden over time and benefit from pooled financial management by professional investors.

Pensions have failed because they were mismanaged. They are not “Ponzi schemes”.

Ponzi schemes are also just mismanaged funds. They are just the degenerate case of:

> "impractical rate of return” is one element of “mismanaged”

Reply on news.ycombinator.com