Unlike government entities, private companies are legally obligated to keep pensions fully funded at all times. And they're also required to pay a fee into a federal agency designed to cover the costs of the federal government bailing-out failed pension funds.
There are ways that companies can and do game the system. For example, during a merger the company might claim that the combined pension fund is overfunded and then stop making payments until the supposed net liability returns to 0. The "excess" funds often find their way into executives' pockets as bonuses, compensation for the several quarters where the company's ledger miraculously showed unexpected profits.
There are problems that need to be resolved, but they're resolvable. Private pensions can work, and have worked. Don't believe the rhetoric about pensions--it's largely driven by executives trying to raid pension funds. Executives don't like them because as compared to 401(k)s the ratio of executive compensation to worker compensation is lower. There are federal rules that require workers receive the same benefits as executives, and for various reasons executives will come out ahead with 401(k) packages.
The book Retirement Heist by then WSJ investigative journalist Ellen Schultz explains all the gory details.
Municipal pensions are irreparably broken, though, precisely because the federal rules regarding funding don't apply to them.
There are ways that companies can and do game the system. For example, during a merger the company might claim that the combined pension fund is overfunded and then stop making payments until the supposed net liability returns to 0. The "excess" funds often find their way into executives' pockets as bonuses, compensation for the several quarters where the company's ledger miraculously showed unexpected profits.
There are problems that need to be resolved, but they're resolvable. Private pensions can work, and have worked. Don't believe the rhetoric about pensions--it's largely driven by executives trying to raid pension funds. Executives don't like them because as compared to 401(k)s the ratio of executive compensation to worker compensation is lower. There are federal rules that require workers receive the same benefits as executives, and for various reasons executives will come out ahead with 401(k) packages.
The book Retirement Heist by then WSJ investigative journalist Ellen Schultz explains all the gory details.
Municipal pensions are irreparably broken, though, precisely because the federal rules regarding funding don't apply to them.