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1. lmm+(OP)[view] [source] 2025-05-27 11:49:12
Defined contribution is far worse, it's just a way to shift the risk onto the individual who is far less able to manage it, and then tell them it's their own fault they don't get a pension.

Defined benefit pensions work great outside of massive frauds. A better way to address that would be a government guarantee paired with prudential regulation and prosecution of frauds.

replies(1): >>ghaff+Sb
2. ghaff+Sb[view] [source] 2025-05-27 13:20:11
>>lmm+(OP)
I’m not sure I agree but, yes, defined contribution does shift the onus of any savings onto the employee. The employer has basically washed their hands of it outside of possibly setting up a 401-k.

I’m not sure that’s inherently bad. Why should $CORP really be responsible for benefits 30 years hence? And, by the way, you probably need to work there for 10 years or so before the benefits even get interesting.

replies(1): >>lmm+Ri
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3. lmm+Ri[view] [source] [discussion] 2025-05-27 14:05:03
>>ghaff+Sb
> Why should $CORP really be responsible for benefits 30 years hence?

Because they're in a better position to pool risk, hire expertise, and generally run a pension well than an individual is. I mean I do think governments should focus more on improving universal pension systems rather than offering tax breaks to get employers to do it for them, but pushing it right down to the individual is even worse.

replies(1): >>ghaff+cn
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4. ghaff+cn[view] [source] [discussion] 2025-05-27 14:39:18
>>lmm+Ri
They’re mostly just paying money into a pension fund someplace. (Though maybe not enough.)

An individual can farm out investments to a target date fund at Fidelity or wherever.

The argument/issue isn’t really that it’s hard for individuals to make investments relative to pensions but that many don’t. So we need to not make it an option and do it for them.

replies(1): >>lmm+1z1
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5. lmm+1z1[view] [source] [discussion] 2025-05-28 01:14:08
>>ghaff+cn
> An individual can farm out investments to a target date fund at Fidelity or wherever.

Sure, but they have no way of knowing that a target date fund is what they should be looking for, or which target date funds are good and which are high-fee scams (or rather, they have no way to know that high-fee is the thing to watch out for). The seemingly logical thing might be e.g. put everything in the fund with the biggest headline return number in the last year.

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