A few years ago, General Motors got a new CEO.
When interviewed later, he said that the company was a large pension fund and medical insurance company … that also made some cars and trucks.
… Meaning … that the pension fund obligations and medical insurance obligations were so huge that they overwhelmed the automobile side of the company.
Sometimes, if the company is old enough and there are enough retirees, then there just isn’t enough money to go around to fund the private pensions.
Bad actuarial planning.
Pensions are just VERY expensive to fund.
Look it up yourself … if you had to fund your own retirement fund, how much money would you need to put into an annuity each year for … say … 50 years.
You can run the numbers, but it would probably be close to 50% of your salary.
It depends on the assumptions of annual return and starting early enough and compound interest, and etc.
Some companies would not even let you begin to participate in a company pension plan until you had been there for a number of years … to keep the pool down to a financially feasible size.
For “fun” call an insurance company and ask them for a quote … how much would you need to invest yourself in an annuity.