Reply to Are Feds offering pensions to new employees?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]OP here again.  Let me also clarify that I think the TSP is a great and appropriate benefit.  I am all for contribution based retirement options.  It's the defined benefit that I find inappropriate ... partially b/c we have no idea what future market returns will be and I suspect that actuarial return assumptions are too high, which means that additional revenues will be required to pay promised benefits if the current investment pool does not achieve its return objective.[/quote]

TSP and Pension are 2 different things. Both may have employer and employee contributions.[/quote]

No s, Sherlock.  That's the point.  One is funded now based on known resources and has no future liability (TSP - a Defined Contribution).  The other (a pension - Defined Benefit) is partially paid now, but has a big associated liability that is promised but only funded later from the contributions of new enrollees and the investment returns on the existing trust ... primarily the latter.  If returns are not achieved to meet the promised benefit, guess what happens ... we all pay more taxes and the government takes on more debt to pay their obligations.  I'll save the economics lesson, but neither of these outcomes are good.

I am now concerned that the PPs questioning my understanding are the ones that don't understand how their benefits work ... further enhancing my skepticism about the legitimacy of the DB offerings.[/quote]

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