On harder difficulty levels, you may have noticed the pension system or unions demanding benefits.

So what are Pensions?

Pensions are an employee retirement system funded by companies and workers. A pension pools the money together in an investment fund. When an employee retires, they receive regular payments from the funds for a set time, often for the rest of their life.

This concept might sound foreign in some countries with socialized retirement systems. In such countries, instead of companies funding and managing the investment funds, government taxes companies and then manages the funds as a government program.

In GearCity, we opt for private pensions because they were more prevalent in the early years of the automotive industry. And you can still find them in countries with state-controlled systems.

State pensions systems are different depending on the era, location, and political whims. And so we have not implemented them.

The game has two types of retirement systems. One is Defined Benefits, also called Pensions, which we just covered. The other is Direct Benefits.

Direct benefits are non-wage compensation given to employees for their work, including retirement benefits and non-retirement compensation such as health insurance.

You pay these benefits directly to the employee at the time they earned it. The employee manages the benefits themselves. You may already know a common direct benefit retirement system called a 401k.

Often, you won’t notice the benefits systems until the union heads make demands.

The easiest choice is to give them what they want.

But you also have the choice to negotiate or ignore them.

If you ignore them, workers could strike, which would cause decreased production and demand.

If you select negotiate, the Union negotiation screen will open.

You can also access this window anytime by clicking the phone, selecting Human Resources, and then selecting the Negotiate Benefits button.

This window contains nearly everything about the pension system in the game.

Benefits in GearCity are global. Every city in the game uses the same benefits settings.

At the top is each department.

The top section is for Direct Benefits.

This value is all direct benefits you’re paying out each month.

Below that is the amount you’re paying out in this department per month.

Here is the percentage compared to the employee’s wage you are spending on direct benefits per employee.

For example, if the employee’s wage is $1000, and this value is 20%, you are spending an additional $200 each month in benefits.

You can adjust that percentage using this slider.

The new percentage and the estimated monthly costs of that adjustment are here.

The Union must approve any adjustments you make. You can find their approval here.

And their expectations here.

Direct benefits become common later in the game, so in early game years, Unions are likely to reject any direct benefits in favor of pensions.

The middle section is for the Pension system.

This value is the amount of money you owe to all employees, retired or not. Some of this money you must pay out next month, some of it you won’t have to pay for another 50 years. It is just the entire amount owed at this time.

This amount is how much money you have in your pension funds.

Any employee contributions go into this fund, and you can inject additional funds at any time. The fund manager invests the money to make it grow over time.

If the funds are less than the monthly payout, your company will have to pay the shortfall from your cash on hand.

Therefore it is wise to inject funds into your pension early so that the savings can grow faster than the amount you owe.

Here is your monthly payout. This value is the amount of money you have to pay retirees next month.

The money comes from the Pension Funds. If this value is greater than the Pension Funds, your company will have to pay the money from your cash on hand.

Monthly fees are the amount of money employees contribute each month to the fund. Ideally, your current working base should be able to fund your current retirees. Similar to a Ponzi scheme. (~cough~ Social Security ~cough~)

The Benefits percentage is the amount of benefits you will pay as a percentage of wages when the employee retires.

And the Fee percentage is the amount of current wages, as a percentage, that employees pay into the fund each month.

To adjust the benefits or fees, use these sliders.

You can see the adjusted percentages and estimated costs here.

The union must approve any changes you make here.

You can see what they’re requesting here.

Once the union agrees to your terms, click the Apply Benefits button.

When you’re negotiating Pensions, you want to have your employees pay a fee at the expense of a larger payout if your company is growing.

If the growth of your company has stagnated, then it is a smarter idea to give up the fee in favor of a lower payout percentage.

When Direct Benefits become favorable to Unions, if you do not have adequate pension funds, try to reduce pension payouts by giving more direct benefits.

On the flip side, you might want to avoid direct benefits if your pensions are well funded.

Even if you're paying your employees well, unions will demand more from you anytime your company is doing well. Or anytime your competitors increase their employee benefits.

The union's job is to get as much money from you as possible, even if you're doing well by them.

This window also includes a way for you to put money into your pension fund using the Fund Pensions button.

A new panel appeared here, containing the pension funding system. To inject money, slide the slider.

The amount of money you’re submitting is here.

Click apply to submit the funds.

This tool is also available in the banking window.

The last thing to look at is the Pension Payments report.

You can find the Pension Payments report in the Reports, under Operations.

This report is a table breaking down your pension payments by the year the employees retired.

For example, employees who retired in 1957 will receive approximately $5,500,000 per year, or about $460,000 per month until 1982.

After 1982, this group of retirees will no longer receive pension payments. (RIP)

Each row is a separate group of retirees. We can see, for instance, that in 1975, we had fewer employees retire than the previous year.

This report is to help you visualize the number of funds pulled from your pension funds. And if there will be any big payouts expiring soon, such as the 1966 payout or the 1981 payouts.