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No need to wonder why governments from cities to states are getting rid of pensions. These kinds of benefits are ridiculous. It's not like government employees are underpaid as a whole. I just don't think they are. Every holiday off (depending on the position), good pay and benefits and good pensions. Most jobs don't need to offer all that to find employees.
I often hear people say they could make more in the private sector and for some that is true. But I'm willing to bet that for the average government job (if there is such a thing), the person would not make more. Private sector employers aren't just handing out high paying jobs. Some government employees might get a rude awakening when it comes to salaries.
Out here in the real world many people don't have the upper hand when negotiating. Hard to have that when there's always someone who'll do your job for less.
Just my opinion.
Very, very, very few, if any are getting rid of pensions. As a former administrator of a public sector pension for many years and one who is on top of the developments, I can say that with certainty.
Very, very, very few, if any are getting rid of pensions. As a former administrator of a public sector pension for many years and one who is on top of the developments, I can say that with certainty.
They're not getting rid of pensions, they're switching from defined benefit to defined contribution. Alaska did that about 10 years ago.
My company also froze our pension and switched to a defined contribution plan. I don't consider that a pension. So in my mind yes, they got rid of the pension. We didn't lose what pension benefit we already had coming -- but froze it, got rid of it, switched from it….whatever….going forward, it's not what we had before.
It may be my own limited definition. But to me a pension is a defined benefit plan. A defined contribution plan while nice to have, to me, is just a second 401K, funded by the company, instead of directly from my salary.
My company also froze our pension and switched to a defined contribution plan. I don't consider that a pension. So in my mind yes, they got rid of the pension. We didn't lose what pension benefit we already had coming -- but froze it, got rid of it, switched from it….whatever….going forward, it's not what we had before.
It may be my own limited definition. But to me a pension is a defined benefit plan. A defined contribution plan while nice to have, to me, is just a second 401K, funded by the company, instead of directly from my salary.
A lot of company's pension plans used years of service to determine the annuity payment. Your frozen pension probably stopped counting those years at that point. So you will have a factored payment or a lump sum depending on what you choose. I might be wrong and there is a third factor I haven't considered yet but I think that is a good bet. Going forward I do hope you took advantage of that change and invested in the company plan.
My wife and I are both California state retirees. I elected to take a cut in the monthly amount of my pension to provide full survivor benefits to my wife in the event that I precede her in death. Should that occur, she will receive an amount each month equal to what I receive, plus a yearly COLA, in addition to her full monthly pension amount and COLAs. There is no cap and the benefits are lifelong. We also receive Cadillac medical and prescription coverage for which we pay no premiums and the benefits also reimburse us for the monthly Medicare Part B premium through our pensions.
I'd say our pension benefits are a large boon. They are a significant part of what made it possible for us to retire and are not too good to be true. They are a big part of why we both chose careers in state service which also included reasonable pay and excellent benefits while working as well as the opportunity to do some good for the people of the state.
Why did you have to ask? The answer should be evident.
Agreed. The bulk of my retirement income is from my New York State pension.
In New York, you have several choices, including one in which your beneficiary receives your pension for his/her life. I believe that may only apply to spouses but I'm not sure. You can also choose other options for having your benefits continue for specified time periods (5 or 10 years) after your demise.
Going forward I do hope you took advantage of that change and invested in the company plan.
We'll all have the pension payment we've "earned already" that's in the frozen plan. The company switched to it putting -- depending on years of service at the time the pension was frozen -- 5 - 8% of an employee's salary in the person's DC account (separate from -- but the same options as -- our 401k. The company used to also match some of our 401K contributions. That's went by the wayside as well. So now my contributions aren't matched.
DH has a private pension from his company and his division was part of a buyout with his current company. They dropped the pension and went to only 401k's, although he was had both for a while in his original company. DH's pension was frozen, as in no more was contributed but he had 25 years into it and it has continued to grow. At the time of the final rollover to the newer company he had an option to get a lump sum from the pension, but he decided to stay with the pension plan as its well funded and managed, although the plan is being managed by another company now.
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Same with me. I worked for accompany that had a pension then they did away with those and went to 403(b). When I retire I can choose either a lump sump from the pension plan or monthly payments. I don't even know how much of a lump sum might be offered. Someone I know got about $100,000, but she had more years with the company than I did.
They have been sending me emails asking if I want to roll over what I have in the pension into my 403(b) or another IRA. I don't think I want to...
I don't know that I'd call it a "boon", because it was planned for, anticipated and earned through many years of federal, state and military service. But it's definitely a very large part of our retirement. My husband is drawing his military and federal (CSRS) pension now. If I work 6 more years in my current position, I'll have a state pension at age 65. Add in SS for both of us and my 401k savings, and we'll be in good shape.
Also (and I may be wrong), as a California state employee aren't you excluded from Social Security benefits?
NO ONE is "excluded" from Social Security benefits IF they made the proper contributions. State employees with outside employment, for example.
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