OK, I'll succumb to temptation and lay everything out once again for non-US members, even though this entire thread flirts heavily with APUG's ban on politics outside the soapbox.

First, pensions. If a US corporation offers a defined-benefit pension (one where a certain number of dollars per month will be provided at retirement, usually based on a formula that includes age, wages and years of service), it must pay premiums to the Pension Benefit Guarantee Corporation (PBGC). Employees' pensions are referred to as "vested benefits," with vesting sometimes happening after a several year delay and sometimes happening immediately after each year of service. That is, the employee is entitled to those pension payments regardless of whether the employer discontinues the pension plan or not. In return for employer premiums and meeting a minimum plan funding level by the employer, PBGC will continue payment of a retiree's pension benefits in the event the employer goes bankrupt. There are some limitations, based on how old a retiree is at time of company bankruptcy and how large their monthly benefit was, but a substantial portion -- many times all -- of the monthly pension check continues to be delivered, from the PBGC rather than the former employer's plan.

Next, medical benefits. There may be a small number of exceptions that actually pre-fund and vest this coverage, but most US private sector employers who "promise" retiree medical make very clear, through regular disclosures during employees' working years, that said medical coverage is not a vested benefit and is subject to discontinuation or modification at the employer's whim at any time. Most employees don't bother to read the mandated disclosures; even those who do usually fail to grasp their meaning. Note that almost everyone in the US is eligible for Medicare coverage at age 65. It does require a monthly contribution, carries a deductible and doesn't cover everything, but is infinitely better than the situation those under 65 find themselves in -- i.e. no coverage outside employment or prohibitively expensive individual insurance policies. This is scheduled to change with the phased implementation of the Affordable Care Act


but, even after all Affordable Care Act provisions take effect, Medicare remains a much less expensive option for those who qualify. There are private supplemental insurance plans available for those who wish to mitigate the risk of Medicare's deductible and co-pays.

In summary, the important points are:
  • Pensions, when offered, are guaranteed vested benefits
  • Retiree medical benefits are provided at employers' whims


I should point out that private sector defined benefit pension plans are going the way of the dinosaur in the US. Most companies have ended them completely for new employees and many are placing a "hard freeze" on their plans for even long-term current employees. That is to say, "your monthly pension benefit is frozen based on your salary and length of service today; no matter how many more years you work from this point on it won't increase." Also, the number of private sector employers who even "promise" retiree medical coverage is rapidly approaching zero. In the case of my former employer, probably the country's largest exporter, there wasn't much need for me to speculate. It terminated all such coverage, including for then-current retirees, in 1994. Medical insurance expenses had to be part of my retirement planning for a long, long time.

One last thing. Some will undoubtedly pile on now to complain about public-sector employees who continue to receive defined-benefit pensions and retiree medical coverage. My preemptive response is: why not work toward requiring those benefits for private-sector employees rather than dragging public-sector workers down too? Why not recognize the reality that employer/employee relationships are inherently adversarial and once again support labor organization rather than working/voting against public sector unions who never lost sight of the fact? Why let "divide and conquer" succeed?