Count me as a big fat giant NO on pensions.

-They aren’t in your name.
-Bankruptcy vaporizes your benefit.
-PBGC doesn’t fully protect.
-They aren’t portable.
-Survivorship typically only includes your spouse

(Where’s badflaps? He can talk you out of a DB in a pithy 3 sentences or less.)

Class leaders clowns:
Air Lines
USPS
Sears
NJ State Employees retirement
IL State Employees’ retirement


Did anyone see the blowback on the questionable optionality on the Cash Balance Plan? Wait till you see the backlash if you float a DC for DB trade. Never going to happen.

Shifting to annuities, if anyone is thinking about buying retail DB substitute:
Did some research on Equity Indexed Annuities for purposes of deferring taxes. On the surface for a small fee you get the chance to sock away money just like a 401k. Pay tax on withdrawal in retirement. Sounds good, right?

Some big minuses:
-Payout rate of an annuity is not the same as withdrawal rate from a 401k/IRA. 4-5% withdraw from your IRA typically doesn’t touch principle. 4-5% annuity payout includes the complete surrender of the principle.
-Annuities typically cap returns at ~7%
-Participation Rate fee lowers returns
-Spread/Margin Fee lowers returns
-Riders lower payout
-Fees stack against the cap
-Surrender fee makes unwinding one of these difficult or expensive
-Not FDIC insured, not regulated by SEC. (State insurance commission)
-*****Even under contract, Issuers can change terms of annuity down the road by appeal through State Insurance regulator bypassing you!****** This is what kills it for me. You trade return for lowering of risk, only to have the potential in retirement for the issuer to rewrite the deal to their advantage!