# Defined benefit vs. Defined contribution pensions

**URL:** <https://boards.straightdope.com/t/defined-benefit-vs-defined-contribution-pensions/303155>\
**Category:** Great Debates\
**Created:** [May 10, 2005, 1:12am UTC](https://boards.straightdope.com/t/defined-benefit-vs-defined-contribution-pensions/303155 "2005-05-10T01:12:09Z")\
**Posts on this page:** 4\
**Page:** 3

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**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\
**Post date:** [May 13, 2005, 9:11pm UTC](https://boards.straightdope.com/t/defined-benefit-vs-defined-contribution-pensions/303155/41 "2005-05-13T21:11:53Z")

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> [@Ass For A Hat](#):
>
> From the [PBGC](http://www.pbgc.gov/about/default.htm) web site.
> 
> _PBGC is not funded by general tax revenues. PBGC collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over._

From [this week’s economist](http://www.economist.com/printedition/displaystory.cfm?story_id=3966462)

> [@](#):
>
> The PBGC could ill afford more big corporate failures. The agency, which had a $9.7 billion surplus in 2000, faced a $23.3 billion deficit last year (including the expected effect of a default by United). But worse seems bound to follow: the PBGC puts corporate America’s total pension deficit at $450 billion.

I think an article a few weeks ago also described the PBGC as too big to fail which means that in the end, the taxpayer will have to pay out the shortfall if PBGC doesn’t meet their obligations.

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**Author:** ![Ass\_For\_A\_Hat](https://avatars.discourse-cdn.com/v4/letter/a/ec9cab/32.png) [@Ass\_For\_A\_Hat](https://boards.straightdope.com/u/Ass_For_A_Hat)\
**Post date:** [May 13, 2005, 10:58pm UTC](https://boards.straightdope.com/t/defined-benefit-vs-defined-contribution-pensions/303155/42 "2005-05-13T22:58:07Z")

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> [@Debaser](#):
>
> I have not said or implied that they have been left with nothing.

I disagree.

> [@Debaser](#):
>
> I’ve shown you that there are over a million people who’ve had their pensions completely vanish.

> [@Debaser](#):
>
> Well, pensions collapse often enough that the feds had to put this together to bail all the poor souls out who have had thier pensions vanish outright.

On top of this, you’ve repeatedly made unsupported accusations of fraud on the part of plan sponsors.

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**Author:** ![Ass\_For\_A\_Hat](https://avatars.discourse-cdn.com/v4/letter/a/ec9cab/32.png) [@Ass\_For\_A\_Hat](https://boards.straightdope.com/u/Ass_For_A_Hat)\
**Post date:** [May 13, 2005, 11:10pm UTC](https://boards.straightdope.com/t/defined-benefit-vs-defined-contribution-pensions/303155/43 "2005-05-13T23:10:24Z")

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> [@Shalmanese](#):
>
> I think an article a few weeks ago also described the PBGC as too big to fail which means that in the end, the taxpayer will have to pay out the shortfall if PBGC doesn’t meet their obligations.

You may be right about the PBGC’s future. I hope not, but certainly it is under more pressure now than ever. What I can’t let stand however, are **Debaser** ’s wild, unsupported, claims about what has already occurred.

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**Author:** ![Debaser](https://avatars.discourse-cdn.com/v4/letter/d/3da27b/32.png) [@Debaser](https://boards.straightdope.com/u/Debaser)\
**Post date:** [May 16, 2005, 1:17pm UTC](https://boards.straightdope.com/t/defined-benefit-vs-defined-contribution-pensions/303155/44 "2005-05-16T13:17:56Z")

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“pensions vanish” \<\> “left with nothing”

I’m obviously aware that those whos pensions do go away are paid by the PBGC. I’ve made reference to this a number of times.

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