FROM AN EMAIL CONVERSATION
>I also think that my pension is a perk, just like any perk you've received over the years.
No, not a perk. It was part of the value equation that you accepted to give them your time. The problem with a government pension is that they are defrauding you. Or at least fooling you too into believing how good it is or will be.
Compare the difference between a pension and an IRA / 401k.
Your time is worth say a dollar. Now you can take the dollar put it in an IRA, or have Uncle Sam put it in your “government pension”. I’d argue you’d be better off if you COULD put that dollar in your own IRA.
Thirty years down the road, you have to go hat in hand to Mommy Government and apply for your pension. Who knows what the rules will be, the payouts, or anything? You're depending upon the American people's sense of "fair play" and the honesty of politicians to uphold the bargain made by their predecessors.
That money in your IRA is real savings. It's yours. You want it. Go take it! All of it.
The money in the Government Pension is just an IOU based on the willingness of future taxpayers to make good on what you’ve been promised.
And, if, like the social security ponzi scheme, you are unfortunate not to live long enough to collect, then who gets your “pension”? An IRA would go to your heirs. Your accumulated Social Security taxes (i.e., "insurance" premiums) and / or accrued pension just goes into the common pot.
(There’s a reason why accountants joke that social security is welfare for rich white women at the expense of men, especially poor minority men!)
A corporate pension also represent real savings. The company usually has bought a bet with an insurance company to pay the pensioners off. Baring the insurance company and the company going belly up, you'll get your benefit.
Defined benefit plans are being abandoned by companies thru bankruptcy. The Government winds up holding the bag via the PGC. So, to a certain extent, there is little difference between the the bankrupted corporate pension, a government pension, and Social Security! Ask the pilots at Delta about pensions versus IRA / 401ks.
At one time, unions held their members' pension plan assets because no one trusted the companies. Federal prosecutions of the union pension trustees demonstrates the worth of that approach.
So, I think you have to think very carefully about promises versus bank balances. You need to think about the time value of money, discounted cash flow, the value of annuities, and a "bird in my hand is worth two of your promises".