How are you Americans defining a pension? As I read it, a 401k is a Defined Contribution plan invested in stocks/shares, with contributions from the employee and employer.
Which matches a normal UK definition of a DC pension plan, do you only class Defined Benefit schemes as a “pension”?
Thanks for the insightful replies, I’m really sorry for you guys living in the “land of the free”, at-will employment, union busting, shitty retirement options etc etc.
I hope either things improve (doubt) or you can leave. ❤️
Would that I could. If it were me alone I probably would have left the country years ago. But I have my husband and he is close to his family. They are already unhappy that we don’t live in the same state as them. (My own family are pieces of Trumper Evangelical shit and I don’t speak to them anyway)
The 401k offloads the duty of the company to ensure the pension is solvent to another company.
The other company is a for profit company that intends to make money off of you, but they also take fees so even if they lose your money they get the fees. It’s a relatively no loose for them while you could lose everything.
All in a vehicle not tied to the original business where the original business can say oh nooooooo so sorry
It has the benefit of portability but tbh unless you are already “well off” and making enough to live comfortably you are not likely to be able to contribute to your 401k at a level that will afford you a retirement.
And on top of that, every 401k I’ve ever had has a vesting scheme. So if you’re not with the company 6+ years, they take a portion of your 401k that they contributed, whether or not you quit or they fire you.
So even the employee match isn’t a guarantee (assuming they match at all).
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How are you Americans defining a pension? As I read it, a 401k is a Defined Contribution plan invested in stocks/shares, with contributions from the employee and employer.
Which matches a normal UK definition of a DC pension plan, do you only class Defined Benefit schemes as a “pension”?
It’s not guaranteed the employer will contribute. Half of them (including mine) do not. It’s simply a tax deferred portfolio in that case.
Thanks for the insightful replies, I’m really sorry for you guys living in the “land of the free”, at-will employment, union busting, shitty retirement options etc etc.
I hope either things improve (doubt) or you can leave. ❤️
Would that I could. If it were me alone I probably would have left the country years ago. But I have my husband and he is close to his family. They are already unhappy that we don’t live in the same state as them. (My own family are pieces of Trumper Evangelical shit and I don’t speak to them anyway)
The 401k offloads the duty of the company to ensure the pension is solvent to another company.
The other company is a for profit company that intends to make money off of you, but they also take fees so even if they lose your money they get the fees. It’s a relatively no loose for them while you could lose everything.
All in a vehicle not tied to the original business where the original business can say oh nooooooo so sorry
It has the benefit of portability but tbh unless you are already “well off” and making enough to live comfortably you are not likely to be able to contribute to your 401k at a level that will afford you a retirement.
And on top of that, every 401k I’ve ever had has a vesting scheme. So if you’re not with the company 6+ years, they take a portion of your 401k that they contributed, whether or not you quit or they fire you.
So even the employee match isn’t a guarantee (assuming they match at all).