Pensions is a topic I have had an interest in since I started collecting on one a few years ago. Fortunately Canada and the Netherlands are two countries that seem to take pensions seriously - pensions are evaluated every 3 years, using the standard actuarial methods to ensure they have enough funds to meet obligations. Should they not, they must present a plan to fully fund within 5 years - and the Canadian government doesn’t accept “we’ll wait until the fifth year”. Pensions must be managed at arms length by a third party licensed management company. The problem that many companies ran into around year 2000 was the perfect DB storm- low interest rates with a crappy stock market, which meant predicted yields were down and the current value of the fund was down too, requiring large contributions. Of course, these are the same companies that did not complain when a booming stock market meant no contributions were necessary for several years. It was still possible for a company to fold without making the necessary remediation, but typically this mean a scenario like 25% reduction in pensions. (Stelco in Hamilton and most recently, Sears Canada come to mind…)
The issue with American defined benefit is, AFAIK, that the company could manage the fund. Some would put company stock into the fund, aggravating the perfect storm scenario because the stock value was going down just as business was bad and profits were down - and a much larger contribution was called for. The government fund there has limits on payouts tied to average industrial wage, so groups like airline pilots with extremely high pay were basically getting nothing. Plus, the board funded itself with a premium on pensions, meaning the good pension plans helped pay for the bad ones - more incentive to get out of the DB pension plans. In the worst case (UK example) one giant media company ran its own pension fund, and the owner raided it to pay for the sinking company - until he emulated his company by jumping off his yacht never to be seen.
Defined benefit pensions are promises to pay later for work done now. As such, they belong to the employee as much as a paycheque does. (I’ve never understood the trope with police and military of “fired and take away your pension”. IF the person was performing that badly for 20 years, you should have done something 20 years ago. If they did a the job recently, what’s the rationale for stealing earned money?)
As for Desert Dog, yes, it’s pretty much standard. Cost of living escalation, if it exists, does not kick in until you start collecting - another incentive not to quit before you retire. The clause for my pension also only increases by one percent less than inflation index, so in reality my pension is discounted by 1% each year. Plus, I found that about 30-something was when the golden handcuffs applied - the net present value of a pension was crap if you quit, since there was 30 years until payout. But we have a 30years-and-out (could collect full pension, vs. age 65 if you quit early) so people had 15 or so years to get a full pension, or take the equivalent value in a locked-in-savings retirement fund that was about equal to half a year’s salary.
An interesting issue with contracts - when the Phoenix Coyotes of the NHL were going bankrupt, the argument was they could nullify the contracts for players and the venue they rented - but did not nullify the contracts with the league and other owners restricting their relocation options. So… bankruptcy provisions removing obligations apparently depend on how rich the people affected are.
Although, a notable flaw on the other side, with defined contribution plans - these can leave the individual vulnerable to predatory retirement fund management companies. The people least able to manage money are the ones who have to decide what to do with their precious retirement funds. Plus, now the individual retiree is the one at risk if the stock market blows up.