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Voiceover: Talking about pensions isnt always viewed as the most interesting thing to do, but hopefully this video and the next one might convince you that it is at least worth talking about and understanding because it has major implications for the fiscal situation of many, many, many states in the U.S. A pension is essentially a defined benefit plan. Defined benefit plan for retirement. We can compare that to a defined contribution plan. Defined contribution plan. The defined contribution plan, and this is more typical in a lot of private companies right now, every year that you work, lets plot a little graph here. This is years that youre working, and this is kind of compensation. This is compensation right over here. In a defined contribution, every year that you work, youre obviously going to make your salary. Lets say youre making $60,000 a year. Youre obviously going to make your salary every year that you work. In a defined contribution plan, lets say this is when you
