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I thought WEP only applied to federal workers. My brother-in-law retired on 50% active duty pay after 22 years in the army. He spent the next 20 years running a successful contracting business. He put all the company earnings in my sister's name and paid SS to her account, because he knew that the system would cut his SS benefits because of his military pension. My sister was a teacher, and her teacher's pension has no effect on her SS check.
Your brother's SS should not be affected at all by pension. Only effect will be in taxes not in how much he receives. He should get full benefits based on his earnings. Active duty has nothing to do with it. Hopefully he put some into his own SS as he was running his business.
Don't be so sure pension funds have had the best money managers in the world. Hedge funds have been losing money of late and yet they still get their fees. Also don't assume that contracts to manage funds are given out based on competency and not relationships.
OK.... My pension fund has been getting a consistent 8% since the giant downturn when they lost a good bit.
And that might not be the salary her pension is based on.
My brother is a teacher and makes $120,000 but only 86,000 is pension eligible. He coaches 3 sports, runs a summer program and covers certain duties before and after school which he gets paid for but does not earn pension credits for.
Where is this? I should have worked there. After 33 years, I only made 68K. Heck my son makes 90K in his first year of his first job at UMICH.
I left at age 56 by resigning via the retirement process, took the lump sum, turned it over to the Financial Planner we had been using for 12 years for him to manage for us, found an identical job at a good sized firm within 6 weeks - a company which does not throw employees away like garbage when they reach their mid-50's! I always planned to work until age 68, now I have an employer who will allow that.
After 35 years of service I have no pension, no post-retirement health insurance, and no post-retirement life insurance. Benefits which had been promised to all employees since before I started working for them. It is almost like I was never even there.
That is not true. That lump sum has a value - PV is what you got - and FV what it will grow to in twelve years when you need to start drawing.
So, what will that FV be in twelve years??? What is the amount of the $$ monthly annuity over say 25 years, factoring in a conservative 5% return on monies remaining. Example: $150,000 @7% x 12 years = $346/608; $346,608 @ 5% over 25 years annuitizes to a monthly payment of $1,444.
So, no, it is not "almost like you were never there" because you did collect that lump sum and invested it.
Which gets back to my original question upthread. Your company promised 35% of final salary. So, what, exactly, will that lump sum provide when you begin withdrawals on it - seeing as how it is now invested.
That's your "pension." Mine became 10% and then 5%. Yours can't possibly be this low.
Quote:
Originally Posted by mysticaltyger
But they do pay for public sector retirements. If you're a public sector worker, your whole salary is paid for by the taxpayeras well as your retirement. That's just the fact of the matter.
That is not true around here in WI (I know many retired WI teachers), and I know that isn't true in California. Public sector teachers contribute to their retirement. Escort Rider on this board says he's always contributed a significant sum. CA NEVER had to pay SS for its employees - so CA taxpayers saved that 6.2% and instead put it into the CALPERS. ER's SS benefit is minuscule because of this.
See below:
Quote:
Originally Posted by slyfox2
It may be better, but how much does the private sector worker put into the pension plan. I have a public education pension, but I put 11% of my income each month before taxes into the fund for 33 yerars. It wasn't free. it was actually quite a drain on my monthly income, since after taxes that number was closer to 15%.
Most people think that teacher pensions are Free. They are not.
Quote:
Originally Posted by hurricane harry
I'm a public sector worker and my salary is not paid for by the taxpayers. Get your facts straight.
Who pays it then? Isn't it the public taxpayer who purchases your hydro services? Everyone needs them. Aren't you subject to rate regulation by state agencies?
Quote:
Originally Posted by Vic Romano
There was another thread where someone commented on the high salaries. I found the article bein Again my experience has been that I make less than I would in the public sector. I don't get any bonuses that I used to get annually. Yes, there are some that make more than the private sector, but I can't think of many in my area (finance, data analysis) that make less than I do, that have the experience that I have in my general field...
You are exactly right. Private sector has been screwing over its workers for many years, now, beginning w/good ol' Ronnie Reagan when he busted the air traffic controllers union - the beginning of slippery slope for the worker bee. Private companies are offshoring, not giving raises, reducing benefits, taking away pensions, eliminating people when they reach a salary ceiling. Govt workers, otoh, especially federal govt workers, were and are still getting what any decent company should be providing. So, voila, over time, the public sector worker is now earning more than the private sector worker, because the capitalists have determined workers don't have value. Biggest mistake of my life was not taking a govt job - and I had several excellent opportunities.
Last edited by Ariadne22; 08-14-2016 at 07:16 PM..
OK.... My pension fund has been getting a consistent 8% since the giant downturn when they lost a good bit.
I should hope so. Lol. The bottom of the S&P was 666 a little less than 7 1/2 years ago and now it's almost 2200. Calculate the per year increase since the "giant downturn" and tell me if 8% is "good."
I thought WEP only applied to federal workers. My brother-in-law retired on 50% active duty pay after 22 years in the army. He spent the next 20 years running a successful contracting business. He put all the company earnings in my sister's name and paid SS to her account, because he knew that the system would cut his SS benefits because of his military pension. My sister was a teacher, and her teacher's pension has no effect on her SS check.
In NJ low level government jobs like custodians pay more that the private sector but professional and managerial positions pay much less.
That trend is similar in California, although I wouldn't say the high end jobs pay much less--at least not for what is expected (i.e. 50 hour work weeks for executive level gov't. jobs vs more in private industry). Overall, it evens out.
It certainly depends on the state. In Virginia, teachers do not contribute towards their pensions, and pay in to SS, and have a no match 401k (with terrible fund choices). I look regularly at the salaries offered for equivalent state jobs. They are significantly (20% or more) less than the private sector offerings. Utilities in the area have decent starting salaries but still less than true private sector jobs. My next door neighbor is a college grad recruiter for a major bank. We've talked and he verifies roughly the same.
The crappy 401k options are a bummer but could be easily remedied. The fact that they don't match 401ks isn't unreasonable, since there is a pension plan that most likely blows away any 401k match, so the pension should be considered the "match" and a quite generous one at that. The fact that you don't have to pay into the pension is also quite a bonus. We don't pay into SS, but I pay 15.23% into the pension plan (goes up every year). Even when times were better in the late 1990s, I still had to pay something...somewhere around 4.76%...and that percentage has gone nowhere but up ever since.
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