We've found that the risk of professionally managed pensions is actually borne by taxpayers, not "institutions".
I think what is currently happening with many pensions in the U.S. -- e.g. underfunding followed by default of one manner or another that transfers the pension obligations to the increasingly underfunded Federal government insurance/guarantor program that pays a small portion of their original value -- is criminal, ethically where not (explicitly enough, apparently) legally. But it does not of itself discredit the concept of pensions.
At the same time, I'm no expert in this. I'm open to considering opposing arguments. Let me put part of my point another way: Expecting every future retiree to become an investment expert is inefficient. All that time and effort duplicated across so many people, to manage in each individual case relatively small amounts (excluding that small percentage of the very wealthy).
But maybe it's like democracy; all that work by individuals is necessary to keep the system honest. And when the work isn't done, the system degrades. Perhaps the best we can do is to all hire investment advisors (whom we choose) and to treat no investment, no benefit as "guaranteed".
But, with regard to the topic of risk, this is a lot of individual risk.
Not at all. They were unsatisfiable promises.
> If that were prevented (that dreaded word, regulation)
I'll believe in regulation when public employee pensions are less of a disaster than private ones.
> But it does not of itself discredit the concept of pensions.
In theory there's no difference between theory and practice....
> But, with regard to the topic of risk, this is a lot of individual risk.
You can't eliminate risk. You can merely move it around.
I don't know whether the book addresses those aspects of risk, or whether it shares my viewpoint on them, but I welcome the review and the attention the post may place on risk as a topic. The conversation here could become quite interesting.