How common are pensions these days? None of my employers have offered pensions, just a 401k. Current employer is over a century old; seems they got savvy to the pension liability long ago.
Higher productivity, on which all economic growth is ultimately based, requires fewer and fewer people to produce the same amount.
More seriously, it might happen that we get massive automation which means we no longer need humans to create the things that pensioners consume. A "care robot" (see the film "Robot and Frank") would be a game changer here. It's not clear that this is actually going to happen in the next 30 years though.
Market value is driven by supply and demand. If, for example, you get a sudden glut of people looking to sell their securities - say, because all the baby boomers start dipping into their retirement savings at about the same time - that isn't matched by a sudden glut of people looking to buy those securities, then a lot of retirees are going to suddenly discover that their life savings is basically just evaporating at the very moment when they started to rely on it.
Some Gen Xers and Millennials might remember having seen a small version of this play out a decade or two ago, when everyone tried cashing out of their comic book collection at about the same time.
If the economy is growing at a faster rate than pensioners are increasing their consumption, anything they've "banked" can proportionally hold & increase its value (unless it was very poorly invested).
But if pensioner consumption grows faster than the economy, then there's less stuff to go around. Either pensions are worth less, or a bigger slice of the pie goes to pensioners (e.g. propping up asset prices with cheap money) and young people are screwed over (since they don't have many assets).
The weird politics we're seeing these days is driven by a mix of the latter effects, I believe, amongst other things (like loss aversion in older people with less productive capacity, and cohort effects in communication media choice leading to information bubbles).
Politicians bend over to the public employee unions to keep their political support and in turn make very generous pension and health retirement plans that truly are not affordable. Worse, many at the top of the food chain pull down pensions well North of 100k and some hit 250k +. Imagine that, receiving a pension higher than the average salary of a working member of society. However this is what politicians and government employees have engineered behind the scenes. There are two bets being placed here, first being courts will force the states and cities to tax their way back to compliance, the second is a Federal bail out at full $
[0]https://www.forbes.com/sites/adamandrzejewski/2018/10/26/ill...
A 401k is a pension isn't it? Just a defined-contribution pension instead of a defined-benefit pension.
I get a pension at my large young tech company.
My wording is probably off on some of that so an article like this one is probably helpful to flesh out the details:
https://www.fool.com/retirement/2018/06/13/whats-the-differe...
That's specifically a defined benefit pension - just one type of pension. There are many other types of pension. My pension is basically just a big saving account my employer and I both pay into - it's a defined contribution pension.
https://en.wikipedia.org/wiki/Defined_contribution_plan#Unit...
It shifts the burden from employers to employees. As a positive, it means employees are more free to change employers while retaining their retirement / "pension" accounts.
On the other hand, as you suggest, defined benefit was one traditional source of income in retirement that didn't require any action/saving discipline on the employee's part. But that's mostly gone in the private sector now.
The problem here is pensions that require future payout over an indeterminate length of time.
Yes that's the way my pension works. It's still a 'pension'!
That's technically correct (for example, you'll see 401(k) accounts referred to as "pension" accounts on their wikipedia page) but people are so used to referring only to defined-benefit accounts as pensions in the United states that they will look at you funny if you call your 401(k) or IRA a "pension." As is virtually happening here.