pensions are a great deal for the government because it doesn't really have to fund them properly. if a private company offers pensions, it has to fund them enough to essentially guarantee that there will be money available for all the pensioners, making pessimistic assumptions for the market and optimistic assumptions about the pensioners' lifetimes. the government usually makes fairly lax requirements for funding its own pensions and relies on the ability to make up any shortfalls in the future from taxes. shifting from something like $40k + pension to a competitive salary-only compensation would cost a lot more money in the short term.