Comment by xyzzyz

Of course they are more of a problem, just like a mortgage is more risky than saving up to buy a house with cash upfront — pensions create a long term liability in a way that putting cash in employee 401k doesn’t. Even more importantly, with pensions you’re taking a mortgage that is deferred for a few decades, and someone else than you will be responsible for paying it off — by the time the pension benefits come to mature, people who made the deal are long gone, and won’t take any responsibility. It gives them an incentive to make a bad deal to make pensioners happy now, and let someone else deal with the problem of funding them later on.