Because you might suck as an investor, because the fees in the specific funds you can choose from are quite high, because "employer match" funds usually are NOT actually your money until 3-5 years of vesting, because you will likely be too optimistic about the number of years of life you have left and actually draw down less per month than a pension would offer so that you don't run out of funds, because a lot of pensions also include health benefits and spousal support, because a lot of pensions are pretty clear about the retirement benefits at the start of the job, some others as well. Not saying a pension is always best but there are numerous legit reasons why a pension MAY be superior to a 401k.

Could not agree more. My grandfather retired 5 years early because if he didn’t, he would lose his pension due to a GE merger. Just lose the whole pension — versus a 401k where his accrued benefits would now be under his own control. Arguably, his pension terms were probably better, but pensions seem like pretty thin ice with no control or flexibility to my perspective.

I’m not super well informed on what his options were; I’m sure he had different retirement benefits via staying with GE post-merger, but if anyone is interested I could get more details.

EDIT: Based on memory and what kind of work he did, I’m almost certain it was this item in the “General Electric timeline” Wikipedia page: “GE Aerospace Division sold to Martin Marietta, now Lockheed Martin”

Keep in mind that a 401k is almost all funded with your own money. The amount going into the 401k is deducted from your paycheck... you can see it in one of the boxes. A pension, on the other hand, was funded by the company. And that is the exact reason there are so few defined-benefit pensions today in the private sector. These things were so incredibly generous that they are potentially bankrupting the original company... GE is certainly in that boat. Of course companies would prefer employees to fund their own retirement, perhaps sprinkle in a limited employer match subject to 5-year vesting, than to fund the whole thing themselves!

While this is true, the company could just pay you $18,500 less and put that in your pension. Benefits are fungible.

That's not how a defined BENEFIT pension, like what GE offered for decades, works. The "defined" promise is related to what the employee receives, not what is contributed.

That is a pension. In the UK they're called Self Invested Personal Pension and basically all companies do them now.

But I agree they pretty much only have upsides - no risk of the pension fund going bankrupt (would be good right about now in the UK!) and no way for previous generations to steal from the current one, which is basically what all defined benefit pensions are doing now.

A SIPP is something you setup completely separate to your employment. In fact you don't even need to be employed to open one.

An American 401k is a more like what we'd call a "workplace pension" here in the UK, which nowadays a defined contribution scheme from a third party provider selected by your employer. These vary in fees, fund selection etc, but you usually get additional contributions from your employer, as well as better tax relief, for using it vs a SIPP.

Most employers won't pay monthly contributions from salary in to a SIPP due to the increased payroll costs, although some (mine does) will do so for annual bonuses.

Confusingly there's also something called a "full SIPP", which is a much more expensive less-retaioy SIPP that can be used to invest in things like leveraged commercial property.

> Confusingly there's also something that people call a "full SIPP", which is a much more expensive but less-retaily SIPP that can be used to invest in things like leveraged commercial property.

If REITS are what you're referring to then I'm fairly certain a full SIPP is more analogous to a 401k. You can open a 401k today, on your own, without a business. They're just optimized for pre-tax so it makes sense that they're tied to work. Employer matching varies wildly. There is no predefined contribution that can be made by vendors, I believe the 401k limits are all federally mandated, but that mostly has to do with tax optimization.

Well I would guess some people think that living in society means you are always, as a new generation, building on top of what the previous one did. So it is fair that when they can't work anymore we use part of the surplus of productivity that comes precisely from that long-term investment in productivity made by older generations to help them out.

To think of that as "stealing" seems pretty individualistic and short-sighted to me. What benefits would the current generation have to give future generations a future if everything that matters is how much you save and do in the now? This line of thinking leads to financial decisions that value the present much more than they do the future and it's in big part a reason why we are in deep waters when it comes to climate change.

Of course, I agree that it is important to reward people personally as well. But I think it's much more important that we are building sustainable societies capable of taking care of people all through out their life cycles and that improvements on productivity impact us all because, after all, we all live together. But I guess that's just my personal vision of what a good society should be; for others, as you say, they would rather live in a dog-eat-dog world because they know they would be top dogs.

I doubt grandparent is actually against the principle of paying for the prior generations retirement... provided the next generation pays for ours.

The unfairness comes from the current generation not being afforded the same privilege as the last, now that existing defined benefit schemes are largely closed to new members, and extinct in the private sector. These schemes are typically underfunded and stink of Ponzi.

Meanwhile, the current context in the UK is that the Bank of England has just had to bail out defined benefit pension managers who had overleveraged their assets... no doubt at the taxpayers expense.

It's not really surprising to see people clammer for "fuck you, got mine" when half a generation literally believe they will never own a home and never be able to retire.

Oh yeah, you’re right. In the US we mostly use the term “pension” to refer to the type where you only get benefits after 5 years of service, the employer decides where to invest the money, etc.

Updated my original post to make it a little clearer.

It's not an either or. My union father has a pension & a 401k with match.

"Why would an employee in the tech sector prefer an employer-managed pension?"

They might not, but that position presumes that the person has only experienced the 'upside' of the industry. Why would ANY employee in ANY industry prefer it in boom times? They wouldn't. But that in and of itself is very short-term opportunistic thinking. It may still not overall be the position one wants to take, but that also presumes that there is only a binary decision to be assessed, and policy/regulation is rarely lacking in granularity.

Pensions carry their own benefits and detriments. As someone whose been in tech for 25 years, I'm largely ambivalent at this stage, but I suspect many aren't, and are asking more pointed questions to themselves.

Because an employer-provided pension has a guaranteed monthly payout forever.

It's not for nothing they killed em in favor of 401ks, themselves whittled down over the years (employer contributions going down, kicking in after a time, only getting paid at the end of year, etc).

You might be too young to remember the facts on the ground, leaving the conversation to start with, "Why would an employee in the tech sector..."