http://johncbogle.com/wordpress/books-2
Look pensions were fine, when there was a margin of safety, in many different ways . Even when there was a margin of safety, and the biggest margin being more workers than retirees, I won't go into duration risk and interest rates in general, but the bogle way for investing and 1- your age/risk tolerance still wins. And if interest rates were more in balance the 1- age works even better, than pensions. of course over history. I get your above points, but Bogle has made retirement investing for the average person, rather than pensions and maybe even ss, in a variety of ways.
Let me give you a scenario:
Assumptions
Employee A is topped out and earns $100000 per year.
Employee gets to keep 5.5% match on his 401k.
He has zero in his 401k today.
He will retire 10 years after CBA is reached.
He will start investing then after CBA reached.
He puts 5.5% in 401k and gets 5.5% match instead of pension.
In 10 years at 7% average returns he would have $160,000
At retirement he could take out $9600 per year for 25 years
After 25 years employee is out of 401k savings.
Employee B is topped out and earns $100000 per year.
Employee gets to keep current pension and invests 5.5% into 401k.
He has zero in his 401k today.
He will retire 10 years after CBA is reached.
He will start investing then after CBA reached.
He puts 5.5% in 401k, does not get match, doesn't get increase to pension.
In 10 years at 7% average returns he would have $75000
At retirement he could take out $4500 plus $5808 per year for 25 years
That's $10308 for 25 years.
After 25 years employee is out of 401k savings.
Employee gets $5808 per year until he dies.
P. Rez