zlacker

You require the company to fund a pension held at a custodian. If the company goes bust, your pension benefits are not impacted. Importantly, the retirement contributions are on top of your wages, versus being expected to find the cash for retirement exposure out of your own wages such that a 401k requires.

Australia's system is a model: https://en.wikipedia.org/wiki/Superannuation_in_Australia

>>toomuc+(OP)
Employers match employee contributions to a 401(k), so it's not purely out of one's own wages. In this case, Boeing is matching up to 12% of the employee's income, which is very high.

>>Majima+O
Based on a preponderance of the evidence, how successful has that token match been in achieving successful outcomes? It is a match, if you don't contribute, there is no match. That is not how pension contributions and benefits work.

>>toomuc+(OP)
The pension funds are protected, but that does not mean anything close to your promised benefit is available for you to receive. It also creates a recurring liability that the company is on the hook for. This has historically worked out to cases where employees must either get a partial payout from available funds and tank the loss, or have the company fold and everyone gets laid off.

Pensions are a better deal until they catastrophically fail.

>>toomuc+X
I guess it depends on what you define as a successful outcome. Recent changes to the law mean that employees are automatically enrolled at the matching rate and then their contribution automatically escalates by 1 percentage point per year up to a max of 15%. I suspect that that's pretty effective at getting people to contribute and get the match.

>>spywar+k1
See also state governments' pension problems.

>>toomuc+X
Most employees are bright enough to at least contribute as much to max out the company match. It's free money.

>>toomuc+(OP)
Superannuation is very very similar to the 401k honestly. I remember when Australia brought in superannuation system and the biggest pushback was that it was blatantly a move to the us system (we had government pensions in the 90s). The tax treatment isn’t that different since 401k contributions aren’t taxed like income either. I work for an employer that pays 15% 401k contributions on top of salary. The main difference is that employers aren’t required to pay 401k contributions and I think that would be the better point to make.

>>toomuc+X
Well if it is an equal amount of money contributes, yes a 401k match would be strictly better than a pension because it gives control over to the employee of the money.

> It is a match, if you don't contribute, there is no match.

That choice should be left to the employee.

Why are you upset with how the employee is choosing to do with their retirement?

>>Manuel+h2
I'm skeptical. A quick search suggests that 41% of eligible employees don't contribute anything to a 401-K.

The main argument for defined benefit pensions is that while they never covered most employees, they did represent money that people got in retirement without doing anything and which "society" would otherwise have been on the hook for to some degree.

>>toomuc+(OP)
This is no silver bullet. If the pension custodian assumed retirees would live to 75 on average and they start living until 90 then it's going to have a problem.

>>Manuel+h2
A younger me was not so bright. At the time I needed the few extra bucks and retirement seemed a lifetime away; I had all the time in the world to make up for it.

Years later I got a mortgage and learned what compound interest is.

I'd been underfunding for most of my career. You overestimate collective intelligence.