zlacker

If it's so obvious, why offer them? Why do deferred compensation? Why promise to pay in the future for anything?

>>doctor+(OP)
Hedging your bets some will die before they get it/all of it? Keeping your employees sustained while also not giving them enough immediate overhead for creating any kind of wealth?

I'm not serious, these are just the first cynical thoughts that came to mind, but I feel like this question should be one we can actually answer? We've had both pensions and time to see varying degrees of successes and failures regarding them.

>>doctor+(OP)
Because of the principal-agent problem and the fact that there is no structure to reward future success reliably? If the Chicago parking meter plan is so outrageous, why do it? It's obviously bad. So why do it? You know why. There's a guy with controls over a lot of money. He's going to find a way to access some of it.

>>renewi+S3
> So why do it? You know why.

I don't get it. Maybe every single S&P500 CEO has a deferred compensation plan, but when a union asks for it, it's always corruption?

>>mrmeta+L2
No, you're right about the death thing. That's how all life insurance works. They bet on the statistics that most people will die by Y, so the retirement age of X means they will make money if (Y-X) is positive. Pensions are basically just "rest of your life" insurance before the real life insuarance kicks in for your family.

And you see why they died out. Y-X consistently became negative as people lived longer, especially when we moved to a service industry. So they ended it and front-loaded the money. There's probably a lieu of tax codes and other benefit they get from matching 401ks as well that I do not know of without researching.