> A much better system is a defined contribution, in which the employer makes a contribution to a retirement fund for the employee.
I agree, but the government has so many rules around this I wonder if pensions at one point were a better value and a way to work around these arcane rules. For example, the max an employer can add to a 401k is 35k. Another is if a family clears 200k, then you're not allowed to put money into an Roth IRA without huge penalties. Never mind that $5500 is already not very much to save for retirement, but we definitely cannot let everyone do the right thing and save money.
I agree, but the government has so many rules around this I wonder if pensions at one point were a better value and a way to work around these arcane rules. For example, the max an employer can add to a 401k is 35k. Another is if a family clears 200k, then you're not allowed to put money into an Roth IRA without huge penalties. Never mind that $5500 is already not very much to save for retirement, but we definitely cannot let everyone do the right thing and save money.