*facepalm*Aitrus wrote:If I were a business owner and I had to choose between keeping pensions or keeping the business alive, I'd keep the business alive. As the years pass and more and more of my employees retired, I would have more and more company money going out to workers who are no longer contributing. And then I have to hire more workers to replace those that were lost.
That's not how pensions work. Or, rather that's not how they are supposed to work. A defined benefit plan is funded while the employee is working. If the company properly handles the fund there are no expenditures after the employee retires. The reason we hear about States and companies having problems with their retirement plans is incompetency. Incompetency of private industry. It's the private industry that has ruined every retirement pension fund you hear about in the news.
If you look at your LES you'll see the FERS retirement benefit paid by your agency at the bottom is 13.7%, at least for me when I calculate it. That's because FERS is set up to invest funds in federal bonds. So the Government has to contribute more to make up for the lack of long term returns compared to stocks.
Companies and states have gotten into trouble because they foolishly listen to private companies who promised returns on pension funds that didn't happen. This resulted in underfunding the pension funds because they believed them.
So no, modern problems that pensions have is from the incompetence of private industry. The Government has proven better at actually being able to handle money with FERS.
A defined pension fund doesn't require continued contributions after the employees retire.
So no, all of this in regards to at least FERS is completely and utterly wrong.Aitrus wrote:The only reason it's still workable in FERS / CSRS is because of how it's funded. The government doesn't actually produce anything, it provides a bunch of services that aren't directly paid for by the consumers at a register. Instead, those consumers are taxed, and that's a theoretical bottomless well of money so there's little oversight or consequence for overspending. Since most of the payers don't see how their money is spent (or misspent) for those services, they have no idea how raw a deal they're getting.