I'm not from the US, but I'm guessing a 401(k) pension scheme is defined contribution: you pay in cash in a tax advantaged way, and the risk that the pension scheme loses money or doesn't make enough of a return to support you in retirement is borne by you.

I'm also guessing that the government's pension scheme is defined benefit: the risk that the scheme loses money is borne by the government, and you get your pre-determined payout unless the government goes bankrupt.

Defined contribution pensions are typically much more valuable, since they can obviate the need to save for retirement (or at least part of that need).

In the UK, it's extremely competitive to become a civil servant despite the mediocre pay. The reason is security, both in your job and in retirement.

Yes that's right, but you've got the terms reversed. Defined contribution is the one where you bear the risk, and defined benefit is where the government bears the risk.

A portion of the risk. PBGC pays out at a significant discount.

Whoops! My bad - edited.

I would take a government guaranteed pension and lifetime health care over 401k any day.

They are only guaranteed until some elected official decides to give you a haircut on your deferred paychecks (Which is what a pension is), right as you're about to retire. (Or shortly after you do.)

I'd hedge, and prefer splitting my money between both.

Attempting such a cut would result in a protracted legal battle with some of the most powerful organizations in the country.

Unions? Government employees? They aren't even on the top ten of 'most powerful organizations in the country.' Not for the past four decades - Ronald Reagan fixed that glitch.

What's going to happen is that paid shills will start publishing op-eds citing a handfull of executives and upper managers who gamed the pension payments system with overtime, resulting in massive payouts for themselves, drum up public outrage about lazy government workers, and pass an across-the-board haircut. It will, as always, be turned into a red vs blue issue - and half the time, red's in charge.

I don't believe they will ever touch federal government pensions. Municipal maybe, but not federal.

You still can do both if you work for the government.

But you exchange a lower salary for that government job, which makes saving for your 401k & co less effective. There is also the entire calculation of the expected value of money now vs 30 years from now.

Govt salaries aren’t that low.

The inflation adjusted pension, which roughly works out to 33% of your final salary, is in addition to the federal 401k program and social security.

The fact that it is inflation adjusted is critical. To calculate the value of the pension plan, you would need to compute the NPV of an infinite series (assuming advancing healthcare).

The medical benefits are also quite significant and, for lower grade workers, will dwarf the value of the pension.

Government employees tend to be highly risk averse. This was the insight behind the founding of GEICO, the Government Employees Insurance Company, which used to write policies for public employees only.

The tax benefits of being an IRS programmer who writes critical code that nobody else can understand are incalculable.

I see what you did there...