Then again, in the hands of powerful and self-interested public employee unions and the politicians they control, in places such as New York City, “defined benefit pensions” are actually “undefined benefit pensions.” Or rather they are defined on the downside – can’t be less than what was promised – but undefined on the upside. With retroactive pension increases from secret political deals drastically increasing what public employees get paid for work done in the past, with nothing in return. And less well off workers, like the “temps” on the BMW assembly line, forced to accept tax increases and service cuts to pay for it.
Which is why, in many places, there is a state and local government pension crisis, leading to the sort of cuts in benefits for new hires and calls for pension freezes one sees at BMW. Whereas in other states, there are crises due to the failure of anti-tax politicians to property fund the pensions public workers had been promised to begin with, sometimes in lieu of Social Security, which they are not entitled to receive.
Is there a retirement crisis? This, believe it or not, is a relatively hopeful take on the question.