I was talking more about public pensions, as in CPP/OAS in Canada, or Social Security in the US. Just in case that makes a difference to the odds. It seems it would be a touch harder to reduce pensions on the entire population than on federal workers but obviously it can still happen. If it does, yes it could be via rate increases below inflation, e.g. 1% increase when inflation is 3%.
gaja, I am planning for retirement at 50 and at that point it makes a huge difference. At 40 or earlier almost no difference, I acknolwedge that. If you are 50 and the pension number can supply say 40% of your income at age 65, then a 4% withdrawal moves from a 90% success rate to a 100% success rate. At that point you start to have a decent chance with even a 5% withdrawal or at least intermittent 5% withdrawals. Without that pension backstop I would need to use a 3% withdrawal rate as even at 50 years old, we could still live another 45 or 50 years.