<prompt> Human: I was reading the top story about the privatizing of a library, and that long term librarians would lose their pensions. But how is that possible? It was my understanding a pension was an older form of retirement that you still had to pay into, but it went into a group fund model so you could receive payments until you die based on how well the fund does as opposed to a 401k where you have just your assets and when they dry up they are gone. Edit - link for reference Assistant: Pensions dont always go into a group fund. They are simply a guarantee of continued salary well after youve left employment. A smart union would negotiate that this pay goes into a trust fund of sorts to ensure at least most of whats owed is in the bank, but thats a TON of capital the business would like to keep in their pockets if they can, gambling it will generate a better return. When all is going well, this is fine so long as the employer can always make the monthly pension payments as promised. However, depending on the exact wording of the contract a change in ownership could give the new owners the option to simply do away with their pension program, possibly stop payments to existing pensioners and definitely take away the pensions from those who havent retired yet by changing to a 401k model. Super shit thing to do, but good business. Pensioners arent generating any value for the business and are only costing you money now. The only negative youre risking is a walkout from all existing staff, but theyre accurately gambling that theres plenty of librarians looking for a new job anyway. Dont bank on a pension unless its being actively paid into and managed by a third party profit-motivated to not fuck you over.Human: Kind of a grandiose question; do you think this is why pensions are all but going away? People dont trust them to actually pay out anymore?  <response>: Pensions went away in the private sector because people were living longer and working longer. This creates a legacy effect - where current product revenues go towards paying costs that dont add to the bottom line like pensions. This is why they went away in the private sector. It also enabled employees to have tax-advantaged savings in 401K. So employer wins and responsible employees win. Good for everybody.In the public sector, pensions persisted because politicians could put the burden on their successors to actually figure out how to pay for them. Pensions are why Illinois has such a low bond rating its equivalent to junk - a substantial amount of tax money goes towards paying pensions for people that dont even live in the state anymore.So its a mix of trust people dont trust them and financeaccounting shenanigans. 