[pulisse]

While it may have been characterized as more secure than personal investment, agreeing to this compensation scheme doesn't remove the burden of risk

Owing a defined-benefit pension is a legal obligation to provide a future revenue stream. It's more like a bond than a stock, and debt generally has priority over equity.

[sol_remmy]

Doesn't matter if there is a "legal obligation" or not, if the state does not have money to pay then the money will not be paid.

[closeparen]

If I take on a $1m debt through an LLC, pocket the $1m, and have the LLC default, courts will see through that.

The state has money. The government doesn’t.

[smsm42]

Companies default on bonds all the time. That's one of the reasons bonds carry interest - partially to compensate the bondholder for the opportunity costs of not having the money spent on bond and partially to compensate for the risk of the default. Would you buy a bond from a company that is consistently increasing spending 6x their revenue? Would you do it if their plan for covering the difference is "we'll just take more money from you when we need to"?

[chaboud]

And employees who took their government’s and their employer’s word (and contract) for it are somehow he ones to blame?

It’s no small thing to suggest that people should view the legal obligations of their governments with skepticism. That we should anticipate, and account for the risk of, government default in our employment plans.

Politicians who didn’t want to raise taxes (to increase pay, to attract workers) made promises of deferred compensation (which have to be higher to offset now vs. future). Voters bought it, -hook, line, and sinker-, and the entire state bought public services on credit.

I have a hard time pinning that on the guy doing largely unskilled work for the last 30 years of his life. He may be left holding the bag, but I’m not going to leave him with the blame.

[smsm42]

> It’s no small thing to suggest that people should view the legal obligations of their governments with skepticism.

It is a huge thing which should always be on people's mind. Government is the only player on the market who literally owns the rules of the game and can bend or completely change them in their benefit. Which means every promise from them should be viewed with extreme suspicion, as they are both the ones promising it and the ones charged with enforcing the promise, which means it is much easier for them to renege on the promise.

> I have a hard time pinning that on the guy doing largely unskilled work for the last 30 years of his life.

Government employees are not "largely unskilled work", and they are surely not voting against the current setup, as far as I can see. If they did, we could talk about something that is done to them against their will. Right now they are major part of the fraud being perpetuated. They are not some passive victim of some nefarious force, they are active and willing participants of the scheme. Try to cut those benefits or switch them to defined contribution or make them contribute enough to cover the deficit - and see how vocal they'd get.