[jonathankoren]

Except that’s not how responsibility works. They may be the beneficiaries of a broken system, but they aren’t necessarily — and certainly not solely — the ones that broke it.

Just phase them out and switch to 401ks. It’s absurd that such a large portion of government budgets are retirement accounts.

[toomuchtodo]

The problem when you say “just phase them out” is what to do with the trillions in outstanding obligations. For example, pension benefits are protected by the Illinois state constitution. You can imagine the process you’d need to construct and execute to fix pensions in Illinois, Cook County, and Chicago’s cases.

The unwinding is the terribly difficult part because the can keeps getting kicked down the road due to a combination of greed and incompetence. You need back pressure from financial markets to inhibit borrowing for what can never be paid back. Then the hard conversations are forced.

[jonathankoren]

There's a finite time that benefits are paid out. At most, it's the maximum lifetime of the retired worker or their spouse. At some point, the workers and their spouses will be dead. They're beneficiaries do not, nor have they ever gotten a pension.

You simply stop giving new workers pensions, and you offer buyouts to the existing workers. None of this is fast, nor did I say it was. Even if you did it today, we're talking probably at least another 50 years before the last pension is paid out. Meanwhile, You're still dealing with the problems of running a pension plan, but at least you're on a path to divest from them.

This strategy is basically what every old company with pensions is doing. The problem here, is that governments don't do it, in large part due to the unions. I don't blame the unions for insisting on pensions, they're a good deal if you've got one But the fact is they're unsustainable. Unlike a company, the government is never going to go out of business, it's just going to become a retirement plan with a police force.