How do pensions make financial sense for the employer?

My wife is a nurse and is contributing to her pension, but I am confused on how the pension will be able to afford to pay her once she retires. Retirement age in my state is 67, where at that age my wife will have contributed ~$300,000 to her pension. At her current trajectory, when she retires at 67 she will be owed ~$120,000/yr. by her employer until she dies. If she lives until 70 she will have already exceeded the amount that she contributed to her pension. So my question is: how does this make financial sense for the employer? How are they not bleeding money? Is there some financial wizardry I am missing?

Edit: Thank you everyone for the constructive discussion. Learning a lot.