Although so-called defined-benefit pensions were long considered the gold standard of retirement plans – promising guaranteed regular payments for life – corporate churn, financial pressures and outright fiscal malfeasance have made many of them less secure than the employee-guided, non-guaranteed 401k stock investment plans that many companies now offer in their stead.

Only about 10% of private-sector workers have defined-benefit pensions today. But prior to the 1980s, most did. That fact, and what happened to guaranteed pensions in the interim, make them a persistent problem today, ensnaring, among others, American taxpayers who have to bail out a lot of them. …

The situation raises the specter of a fiscal crisis on the order of much more publicized problems involving government support for Americans’ personal finances, from potential Social Security insolvency to mismanaged public employee pensions – as opposed to the private ones at issue here. The moral hazards posed by government guarantees extend to student loans, with President Biden proposing a bailout of hundreds of billions of dollars in student debt. Ironically, the unlucky older beneficiaries who lost private pensions could see their taxes go to bail out those younger borrowers.