Vanguard guy says Dutch pensions are good, but not necessarily something we want to imitate

"A sensible system to match the Dutch system, with more flexibility, would blend the DB/SS system with a compulsory DC system for small employers. "

translation: A sensible system is one that enriches my employer, Vanguard, without creating any risk for the company. Just force people to use investment services like those that my company provides, especially the ones with no guarantee that the money they are forced to contribute will actually provide them cash for their retirement.

Well, Vanguard is a co-op owned by the investors in its funds, so I don't think putting them in charge of said DC system would be much of a problem. But in general I think the idea would be to have something like the federal TSP, where a board picks the investment managers and negotiates low fees. Obviously some folks on Wall Street would lobby for a different, more expensive set-up. But I doubt Vanguard would be among them.

What exactly is the alternative you propose? Do you think your local barber should be liable for his employees' retirement income 50 years down the road?

"What exactly is the alternative you propose? Do you think your local barber should be liable for his employees' retirement income 50 years down the road?"

I think the local barber should be required to put money into a common "defined benefit" program sufficient to ensure that those benefits are paid... kind of like the Dutch program (at least as I understand it.)

But I'm not really sure that we even need to come up with some compulsory additional retirement program.... I'd prefer to just let the government raise taxes, and guarantee a reasonable standard of living for all seniors.

Which is really close to what we are already doing -- albeit the burden seems to fall disproportionate on local governments....

p_lukasiak
"...just let the government raise taxes, and guarantee a reasonable standard of living for all seniors"

Why just seniors?

What do you have against children? And how about those just starting to work youth or those college students without rich parents or grants? How about people who, through no fault of their own, have gotten stuck in low paying jobs? Why shouldn't everyone have a guaranteed reasonable standard of living?

"... the burden seems to fall disproportionate (sic) on local governments."

Why can't they just raise taxes as you have suggested? Does it make a difference that local governments get the majority of their revenues from real estate taxes?