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Comment by sethev | Hacker News Reader

It seems weird to insist that all future obligations have to be funded with money that's set aside now. To give a small example, it would sound crazy if someone said people had to set aside a fund whose interest could pay all the cost of raising a child in advance.

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529 plans are not too dissimilar. Middle-class families can reliably predict that their children will go to college, and make marginal sacrifices to contribute to tax-advantaged investment accounts over 18 years vs. ignoring the reality until their children are seniors in high school and then staring down impossible bills that become crushing debt loads or deferred dreams.

If you're promising someone something in the future (pension) for work that they're going to do now, then you should fund that. If your salary included a big bonus or deferred benefits, would you mind that your manager doesn't set aside any money for that promised benefit?

It's the indefinite funding of a fixed obligation that seems weird to me. If my manager said, "I'm sorry I can't pay your $5000 bonus next year because we don't have $111,000 set aside in a fund earning 4.5% in perpetuity" i'd be a lot more upset. Honestly there's probably something about the accounting that I don't understand.

Pension is not bonus. You don’t get to modulate the amount depending on how generous you’re feeling in a given year. Workers have as much right to it as to the wages they’ve earned and saved into a 401k or IRA. It’s the enployee’s money; the employer is just a steward. Failing to pay a pension is the same as robbing a former employee’s house to take back the wages you’be already paid them.

I'd never take a pension over a 401k. I'd much rather be able to pick some of the investments my retirement is funding/being funded by then none. Seems crazy to me not researching and picking the investments, but maybe I'm bias by my understanding and intelligence versus the average American.

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