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U.S. regulators are encouraging public pension funds that control more than $2 trillion to inject capital directly into the banking system by buying failed lenders, Bloomberg said, citing people briefed on the matter.
The Federal Deposit Insurance Corp (FDIC) is trying to attract pension funds that want to buy stakes or assets of distressed bank holding companies, Bloomberg said.
Direct investments may allow public retirement funds to reduce fees for private equity managers and FDIC to get better prices for distressed assets, according to the report on the website.
If left to a defined contribution plan many would not invest and would use to consume minimizing or negating long term capital market benefits. Also contributions for SS go to fund governement operations or SS depending your perceptions. Contributions to pension funds get invested to benefit the general economy. Which would people prefer teacher and government contributions go for?
How States Systematically Shortchange Teachers’ Retirement and Threaten Their Retirement Security,” we used pension-plan assumptions for all 50 states and the District of Columbia to estimate that, in the median state, more than half of all teachers won’t qualify for even a minimal pension. Fewer than one in five teachers will work a full career and reach the pension plan’s “normal retirement age.” Most will leave their public service with little retirement savings.
This story doesn’t fit with the popular perception of teacher pensions as more generous than private-sector retirement benefits. That’s because the real story of teacher pensions today involves a small number of relatively big winners and a much larger group of losers.
For instance, in Maryland if you teach for a full career you can expect to earn a pension worth about $3,297 a month, nearly $40,000 a year, plus adjustments for cost of living. But only a quarter of Maryland’s teachers will stay a full career and earn that benefit. According to Maryland’s estimates, 57 percent will leave without a pension benefit at all.
For all those teachers who don’t stay for a full career in Maryland — or most states — this savings penalty can make the public-sector benefits worse than those offered in the private sector. Under federal law, private-sector employees must be eligible to retain some portion of their employer’s retirement contributions once they’ve been employed for three years and 100 percent of their employer’s contribution within six years.
In contrast, 17 states, including Maryland, Illinois, Michigan and New York, withhold all employer contributions for teachers until 10 years of service. “Vesting” is an important milestone, but it guarantees only a minimum pension in retirement. The largest rewards go to those who remain in the system for 30 or more years, something few workers do today.
Long vesting periods help state legislators and governors who have failed to properly fund their state’s pension plans. Extending the amount of time it takes for a teacher to qualify for a pension reduces the number of teachers who will qualify. During the recent recession, 12 states lengthened their vesting period to help address funding shortfalls. It saves money, yes, but it does not help teachers.
Defined benefit pensions are becoming a deterrent to getting some young graduates to enter the teaching field because young folks don't intend to work for one employer 30 years and want portable benefits.
In the Midwestern states that I have worked in recently - Ohio and Illinois - public school teachers do NOT participate in the social security. That is, unless they are working second jobs or in self-employment outside of their schools.
In THOSE states, they are NOT contributing to BOTH the state plans AND to Social Security as several union officials in Ohio have asserted in some of the public meetings I have attended.
Fortunately, Ohio posts the salaries as well as pension liabilities affiliated with each public school employee from elementary school to university on a public website available for inspection.
In the Midwestern states that I have worked in recently - Ohio and Illinois - public school teachers do NOT participate in the social security. That is, unless they are working second jobs or in self-employment outside of their schools.
In THOSE states, they are NOT contributing to BOTH the state plans AND to Social Security as several union officials in Ohio have asserted in some of the public meetings I have attended.
Fortunately, Ohio posts the salaries as well as pension liabilities affiliated with each public school employee from elementary school to university on a public website available for inspection.
Right, 40 percent of teachers nationwide don't participate in SS. I posted two links saying that. One of the links also lists the states that don't participate. You can scroll back to post 230 to read the two links for yourself. If not interested in the links you can reread the list of states not participating which I lifted from post 230:
Quote:
Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, and Texas—are not enrolled in Social Security.
As you have noted above both Illinois and Ohio are n the list as you noted. We are in full agreement and ty for reiterating.
And none work anywhere close to the 50 weeks the majority of Americans work.
In NJ, public school is 187 days for most teachers, and another 5 for pd. That is 193 which is about 39 weeks. So teachers are working two less months, and get paid for two less months. Sounds about right.
In the Midwestern states that I have worked in recently - Ohio and Illinois - public school teachers do NOT participate in the social security. That is, unless they are working second jobs or in self-employment outside of their schools.
In THOSE states, they are NOT contributing to BOTH the state plans AND to Social Security as several union officials in Ohio have asserted in some of the public meetings I have attended.
Fortunately, Ohio posts the salaries as well as pension liabilities affiliated with each public school employee from elementary school to university on a public website available for inspection.
Many of the pension plans that I have reviewed in a number of Midwestern states have some provision for widow/widower benefits. If the retiree selects those provisions, they accept a smaller pension payout but the pension continues until the death of the spouse.
One thing to remember is that the presence of a defined benefit plan (i.e., pension plan) does NOT preclude an individual from funding other retirement vehicles (i.e., 403(b) plan Traditional and Roth IRAs).
Most of the teachers "required" to contribute 7-10% of their income are EXEMPTED from paying the 7.65% employee social security (FICA) that private employees pay.
Most public pension plans I've seen have some sort of survivors benefit that persists for the life of the surviving spouse or a specified number of years. Even if the pensions dies with them, it's likely to of more value than a similarly salaried private sector worker's full nest egg.
In NJ, public school is 187 days for most teachers, and another 5 for pd. That is 193 which is about 39 weeks. So teachers are working two less months, and get paid for two less months. Sounds about right.
Here's a simple calculation. Typically an FTE (full time equivalent) is considered around 1825 hours per year. So taking the 193 x 8 = 1544. Then 1825 - 1544 = 281. So dividing by 8 gives about 35 days or 7 weeks less that teachers work than the typical FTE.
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Puhleeaze
