Some governments seem to be quite bad at this though. States differ in pension liabilities and I haven't looked at the federal level.
Only if the electorate is intelligent / educated enough to call bullshit do they temper their bullshitery.
(Just three recent examples of the nonsense of the day. Yesterday or tomorrow, different nonsense, but always nonsense over serious discussion.)
But it's not so hard to say that you can do it.
Assuming we don’t want to live in a society in which vast numbers of elderly live in penury this isn’t true. It’s well known that when retirement savings are the responsibility of the emoloyee then they don’t save enough.
What you say about bad governance is certainly true and incompetent or badly incentivized leadership will exacerbate problems. I don’t know what the solution is for the U.S. but the current system is going to make us end up with a society with large numbers of destitute elderly. Shifting the onus to the employee via 401Ks is just kicking the can down the road so to speak. It also allows politicians and voters off the hook because the liabilities aren’t on the books. On paper it looks good but the reckoning will occur.
(There are a lot of arguments to be quibbled over here, but when the average American can't calculate interest I'm not going to point to them as the best steward of their retirement)
Really, it's an issue of policy not pensions.
Additionally, pension have to be managed and administrated. This is pure wasted money. Every pensioner would be better off taking the money that is set aside for their part of the pool and putting it in a Vanguard index fund. When you start to withdraw, you know how much you have left and you haven't paid tons of kickbacks along the way. When there is a recession, you can scale back your withdraws until there is a recovery, etc.
Fixed benefit pensions can never be anything but a pyramid scheme. Otherwise, your pension would be more by doing what I state above because the administration is near zero. The pension funds have never done better than the S&P over any reasonable time window. Pensions will always have unnecessary overhead.
Also, fully funded is only fully funded when it can survive the company going bankrupt tomorrow. People like to redefine it as liability less than X, but that just means underfunded.
Granted, if you have kids you might want the leftovers from your retirement to go to them, but that's not a social problem. Further becase pensions take less money so a subset can always just buy life insurance.
PS: The biggest issue is benifits not including inflation, but again that's a policy issue.
Sure it is. It's inherently problematic because it assumes perpetual growth of population and economy. Also, there is a difference between pensions and 401ks and IRAs. 401ks/IRAs will run out. Pensions can never run out. In other words, you can outlive your 401ks/IRAs, but you can't outlive your pension.
Or put it simply, with 401k/IRAs, you can't take out more than you put in. With pensions, you can if you live long enough. So who makes up the difference? The workers or taxpayers.
If pension payouts floated as a percentage of overall asset value, then they would a great retirement strategy. But promising people a guaranteed (generous) fixed-income is not sustainable in the long-term.