[quote=harvey][quote=temeculaguy]The trend is towards the elimination of the traditional pension, hopefully that makes you sleep better.[/quote]
That is the trend, and I’m optimistic that common sense will ultimately prevail.
Defined benefit pensions are a financial experiment that failed, but the effects still linger.
The OP was asking how much damage is left to be done.
The question is still relevant.[/quote]
Fifty years from now, do you honestly think they’ll be talking about the success of defined contribution pension plans? Which one do you think will be viewed more favorably, DB or DC pensions, once the DC debacle comes home to roost?
You’re dreaming if you think that DC pensions are superior in any way to DB pensions. I agree that some of the formulas are too generous (and have felt that way since the pension increase passed in CA), but DB pensions have been around a lot longer than DC pensions (since the Roman Empire, if not earlier), and they’ve done exceptionally well, all things considered.
The ONLY way DC pensions (private savings) have ever worked in all of known human history, was when family members were expected — even mandated, in some cases — to care for each other until death. I’m not opposed to that personally, but how do you think that’s going to go over with the general public in the U.S.?
If Americans are forced to take on the care of their sick and/or elderly relatives, I’d bet anything that they would be willing to pay a small tax on their income, over their lifetimes, that would give them relief from this obligation. Welcome to DB pension plans.
Your thoughts? How do you see DC pensions actually working, over the long term, in real life?
Something for you, and other critics of DB plans, to think about:
