Pension Plans in US

choi

Michael Rapoport, Longer Lives Hit Pension Plans Hard. Wall Street Journal, Feb 23, 2015.
www.wsj.com/articles/longer-live ... ans-hard-1424742593

Quote:

"In its first revision of mortality assumptions since 2000, the Society of Actuaries estimated the average 65-year-old man today will live 86.6 years, up from the 84.6 it estimated a decade and a half ago. The average 65-year-old woman will live 88.8 years, up from 86.4. The new estimates won’t affect many US companies, which long ago shifted their employees to defined-contribution plans like 401(k)s, which leave workers on their own after retirement. But they are hitting other big companies with defined-benefit plans that have to make payments to some former employees for as long as they live.

"Larger companies tend to still have a higher proportion of employees in defined-benefit plans. According to 2014 data from the Bureau of Labor Statistics, 41% of workers at companies with 500 employees or more participate in such plans, compared with just 16% in the U.S. private sector as a whole. Overall, there were 15.7 million active participants in private-sector defined-benefit pension plans in 2012, according to the Labor Depa[r]tment. That represents a 48% decline from 1980, which was the peak of participation in such plans.

My comment:
(a) The SOA report:
The Rising Tide of Pension Contributions Post 2013: How Much and When?  An updated analysis of funding for the US private sector single-employer defined benefit system. Society of Actuaries, Feb 18, 2015.
www.soa.org/Files/Research/Proje ... -pension-report.pdf

Please do not read it. It's boring.
(b) There is no need to read the rest. But do view the graphic, which is explain in the second half of the second quotation.
(c) For decades I have failed to comprehend why American workers do no protest (whereas those in Taiwan and China do, sometimes violently) when they are laid off (sometimes near their retirement), their employers close. Nor do they (some of them anyway) worry when  doing the job-hopping?  recently I asked and an American, without explanation,  said nowadays many Americans retire without pension. Reading this WSJ report,  I presume she alluded to "defined-contribution plans like 401(k)s."
(d) There are two categories of pension plans in US, as elucidated in quotation 1. See defined benefit pension plan
en.wikipedia.org/wiki/Defined_benefit_pension_plan
(e)
(i) public employee pension plans in the United States
en.wikipedia.org/wiki/Public_employee_pension_plans_in_the_United_States
(Public-sector "employer contributions to these plans typically vest after some period of time. These plans may be defined-benefit or defined-contribution pension plans, but the former have been most widely used by public agencies in the US throughout the late twentieth century")

There is no need to read the rest of the Wiki page.
(ii) FERS Information. United States Office of Personnel Management, undated
www.opm.gov/retirement-services/fers-information/
("FERS is a retirement plan that provides benefits from three different sources: a Basic Benefit Plan, Social Security and the Thrift Savings Plan (TSP). Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave the Federal Government before retirement. The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period")

* United States Office of Personnel Management
en.wikipedia.org/wiki/United_States_Office_of_Personnel_Management
(an independent agency of the United States government)
(f) Taiwan does not have 401(k). Close to the retirement age, a worker has two choices to collect a pension: a lump sum or a monthly installment until a worker's death, whereupon the pension is not transferable to the surviving spouse (but most pension plans in US are). It is a gamble.