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Although most people are lousy savers defined benefit’s are so lucrative that its beyond belief how much you would have to save with a defined contribution just to have a chance of having the same pay at retirement. This is why there has been such a push to get rid of defined benefits.
I'll concede the point. I realize corporate plans are not as generous as government ones...but I just got my benefits statement for 2013. On a salary of 47K, I put in 6K toward my public sector pension. My employer put in 26K (on top of my 47K salary)...Anyone who uses their brain (not their feelings) knows that isn't sustainable for government let alone a private business.
I'll concede the point. I realize corporate plans are not as generous as government ones...but I just got my benefits statement for 2013. On a salary of 47K, I put in 6K toward my public sector pension. My employer put in 26K (on top of my 47K salary)...Anyone who uses their brain (not their feelings) knows that isn't sustainable for government let alone a private business.
Your absolutely correct. Btw that's an enormous contribution your employer makes!!! Local politicians made sweetheart deals with unions back in the days with these outrageous pensions. The mentality was the same as it is now: "Let the future generations deal with the mess I'm making, as long as I get instant benefits from this deal with the unions in the present I don't care."
May I ask the details of your pension if you don't mind sharing? I love learning about the different pension systems for each state. For example: What state or city is your pension from. And what are the conditions. Meaning what percentage of your salary do you get after how many years of service.
May I ask the details of your pension if you don't mind sharing? I love learning about the different pension systems for each state. For example: What state or city is your pension from. And what are the conditions. Meaning what percentage of your salary do you get after how many years of service.
Hopefully poster Mysticaltyger will respond to your question, but in the meantime there is a thread in the Retirement Forum entitled "Pension systems can change for better or for worse" which contains some posts on the topics you are asking about. That thread is currently about halfway down page two in the Retirement Forum.
Hopefully poster Mysticaltyger will respond to your question, but in the meantime there is a thread in the Retirement Forum entitled "Pension systems can change for better or for worse" which contains some posts on the topics you are asking about. That thread is currently about halfway down page two in the Retirement Forum.
I'll concede the point. I realize corporate plans are not as generous as government ones...but I just got my benefits statement for 2013. On a salary of 47K, I put in 6K toward my public sector pension. My employer put in 26K (on top of my 47K salary)...Anyone who uses their brain (not their feelings) knows that isn't sustainable for government let alone a private business.
Why?
All it means is your salary, less FICA tax, is $73k. As long as the employer is funding the benefit it's perfectly sustainable. Thing is, it usually isn't. They just used the generous benefits packages to entice labor when labor was in short supply and didn't fund them. Whether $73k is overpaying or not is really a separate issue. Stuff changes. Seven years ago, my field was in very high demand. Now with the recession it hasn't fully recovered. The government could drop wages and still fill positions. Ten years ago, they couldn't find people to work for them since you could make more in the private sector working fewer hours.
CEO America thanks you for drinking the Koolaid. You rail against these 'outrageous' public sector pensions, the vast majority of which are less than $30k per year. But nary a peep about executive pensions in the private sector, which still exist and are in fact thriving. What's more, they are exorbitantly funded by the same companies that told their common workers to go pound sand.
Quote:
Originally Posted by griffon652
Your absolutely correct. Btw that's an enormous contribution your employer makes!!! Local politicians made sweetheart deals with unions back in the days with these outrageous pensions. The mentality was the same as it is now: "Let the future generations deal with the mess I'm making, as long as I get instant benefits from this deal with the unions in the present I don't care."
May I ask the details of your pension if you don't mind sharing? I love learning about the different pension systems for each state. For example: What state or city is your pension from. And what are the conditions. Meaning what percentage of your salary do you get after how many years of service.
CEO America thanks you for drinking the Koolaid. You rail against these 'outrageous' public sector pensions, the vast majority of which are less than $30k per year. But nary a peep about executive pensions in the private sector, which still exist and are in fact thriving. What's more, they are exorbitantly funded by the same companies that told their common workers to go pound sand.
Who said anything about being against them or not knowing about the executive pensions? Did you read what I wrote? There's is nothing in my post that would suggest that I'm "against" or "for" pensions. I just said they are outrageous because mathematically they just cannot be continued in the way they were set up. Public pensions are just unsustainable based on economics, that's a fact. All around the country local governments are starting to see that.
I'm actually for pensions because I get one. And I can tell you that its for a hell of a lot more then 30K. The reason those executive pensions thrive in simple terms is because they are stealing money legally for the benefit of the few privileged.
CEO America thanks you for drinking the Koolaid. You rail against these 'outrageous' public sector pensions, the vast majority of which are less than $30k per year. But nary a peep about executive pensions in the private sector, which still exist and are in fact thriving. What's more, they are exorbitantly funded by the same companies that told their common workers to go pound sand.
Exactly.
Why would I care what a corporation pays its CEO? If it makes a product that is of good value, I'l buy it. I don't care if the CEO makes $100,000 or $100 million. I care about the value of the product I'm buying that they make. If it's not a good value, I won't buy it. Public pensions are the opposite. The tax payer pays for those, which means me. It's not the person getting the pension's fault they were promised a big pension as one part of their compensation package. It's the government's fault for not funding the pensions they promised.
The long and the short of all this is that there's not enough money around for every retiree to have a million dollars in assets when they retire. The salesmen promised everybody high growth forever and now we're all fighting about what to do when the fact is the market, adjusted for inflation, has shown almost no growth since I graduated high school 14 years ago. And that's not even considering the fees that are ubiquitous in markets. There's been crazy volatility too. And then you have the folks insisting that if everybody bought Apple stock instead of ipads, everybody could be well off. I don't think markets work that way. I think the two might be related. Markets do need the actual economy in order to function.
Who said anything about being against them or not knowing about the executive pensions? Did you read what I wrote? There's is nothing in my post that would suggest that I'm "against" or "for" pensions. I just said they are outrageous because mathematically they just cannot be continued in the way they were set up. Public pensions are just unsustainable based on economics, that's a fact. All around the country local governments are starting to see that.
I'm actually for pensions because I get one. And I can tell you that its for a hell of a lot more then 30K. The reason those executive pensions thrive in simple terms is because they are stealing money legally for the benefit of the few privileged.
They are not unsustainable because of the way they were set up. The ones that have run into trouble have done so because deregulation of the financial sector caused many governments to make very unwise investments with their retirement funds to chase higher returns. It turns out they behave much like individual American investors and so got fleeced. If they had stuck to traditional, 'boring' investments, most pensions would be in much better shape. The other factor is the fundamental change of the tax structure in favor of high wealth people and corporations which has led to a dry-up of revenue at all levels of government.
Public sector pensions are not extravagant. Most are very modest. The average fed pension is $32k, so the median will be somewhat lower. The average of most state pensions are in the $20-27k range--again, the median will be lower. I recall you work in law enforcement, so those pensions are higher, and are atypical.
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