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Thread: OT - Pension Benefits Now and Then

  1. #46
    Quote Originally Posted by burritos View Post
    http://www.investors.com/politics/co...ension-crisis/



    So is the only recourse for these chronically underfunding issues is to raise taxes(that is if you don't want to renege on the promised obligations?)
    OR,....greater contributions from the employees - but there needs to be a will to take on the issue/unions. Many agencies even started covering the employees' portion years ago and to be fair, many have started to reverse that. But the employee contribution as % of salary could/should be increased. Yes, I understand, that is essentially a pay cut, but IMO a better way to better fund the pension deficit of the PERS system.

  2. #47
    My Federal Pension was based on base salary, overtime and bonuses not included. However some special classes of employees were treated differently. State and local government to attract employees (or to reward political cronies) based pensions on total pay, not base pay which greatly inflates pension benefits. I recall a mayor of a central valley town being shocked when taking office to find that her town had 100 employees making $200k a year, all police officers and that salary would be the basis for their pension benefits. Many locales have separated fire fighters from law enforcement in their benefits packages to protect the benefits of law enforcement.

    Quote Originally Posted by tequila4kapp View Post
    Condolences on your wife's passing.

    Sorry about the disappointment over your pension. I know it is anecdotal, but I was just playing golf with a firefighter who was complaining about efforts to cap salaries at 100K for pension calculations (my reaction: people get paid 100K to be a regular every day fire fighter? WTF?). I think the devil is in the details and the particular agency one works for matters.

  3. #48
    Quote Originally Posted by MarylandBear View Post
    My point is that even generous Veteran's benefits (and benefit for high-risk public servants like FF or Law Enforcement) help a very small population of individuals who made huge sacrifices for the greater good. I'm sure there is fraud, waste, and abuse in the veteran's benefits system, as there are in any public benefits program. That doesn't mean you should shut down or reduce the overall program. And again, you can't tell me the insolvency of any pension program is based on the benefits we give veterans.
    I don't think we disagree, except about who should be paying for the benefit. They served the USA. The USA should take care of them.
    Last edited by Go!Bears; 02-23-2017 at 01:32 PM.

  4. #49
    Quote Originally Posted by 59bear View Post
    Defined pension plans of private employers may still exist but are becoming rarer (and less generous) all the time. I've been retired since the turn of the century. My employer dumped it's defined benefit plan in the early '90s (vested employees got an annuity package) and switched to a 401 option. My wife's deal (a PERS plan) will be better.
    I work for a big company and there's no pension plan for executives. Almost all of the companies in my business either don't have plans or cut off giving the plans to new employees sometime in the late 90's. I'm envious of those with a plan because the limits on 401k plans pale in comparison to the payouts from pensions. My sister's neighbor is a retired fire chief and gets something like $325K/yr in a pension and the dude is in his early 60's. I know executives whose salaries were double that amount and get something like $7500/month which I consider to be pretty generous. No wonder the state pension plan is a black hole.

  5. #50
    I'm not an expert by any stretch on pensions, but I am surprised to hear of people having pensions that pay more than $210k per year which is the current maximum allowable payout under the tax code. See here: https://www.irs.gov/retirement-plans...benefit-limits

    My old law firm had a pretty good pension that maxed out at the IRS limit and I assume that was universal applicable, but perhaps it doesn't apply to public employees?

  6. #51
    I got bored enough to go look at the CALPERS web site. Maybe in the past Vets could skate in an get decades of service credit without service to a CALPERS agency - it does not seem like they can any more: https://www.calpers.ca.gov/page/acti...service-credit Current policy seems to be that Vets can BUY 4 years of SC.

    Pretty reasonable and fair to all parties. Nobody is giving away the store. As it should be. The $400K Fire Chief's pension-spiking was a problem and will be until people hired with that benefit cycle out of the system but it appears to me that current policy mostly gets it right. As for the past, they were operating on different (naive?) assumptions. Market growth was making the funds seem inexhaustible, why worry? (answer is obvious)

  7. #52
    Quote Originally Posted by FuzzyWuzzy View Post
    Yeah, I remember the newspaper story 10-15 years ago about the Dublin or Pleasanton fire chief who retired at 55 with a $400K annual pension for his life and the life of his spouse.

    But the prison guard pensions are the most generous/scandalous.
    I'm curious. How much do you know about correctional pensions?

    Do you know what the formulas have been in the past 25 years? Do you know what CO pay is? Life expectancy? Any idea at all about what the job entails? Please explain.

  8. #53
    Quote Originally Posted by Unit2Sucks View Post
    I'm not an expert by any stretch on pensions, but I am surprised to hear of people having pensions that pay more than $210k per year which is the current maximum allowable payout under the tax code. See here: https://www.irs.gov/retirement-plans...benefit-limits

    My old law firm had a pretty good pension that maxed out at the IRS limit and I assume that was universal applicable, but perhaps it doesn't apply to public employees?
    There is a separate plan called the Calpers RPB that pays out any benefits that exceed the 415 limits.

  9. #54
    Quote Originally Posted by RSFoldguy View Post
    There is a separate plan called the Calpers RPB that pays out any benefits that exceed the 415 limits.
    Thanks! That's really interesting. Looks like this RPB is a non-qualified retirement plan under 415(m).

    As a taxpayer, it doesn't sit well for me that the state is paying out benefits above and beyond what can be paid through a qualified pension plan.

    Here's a description of the plan from Calpers: https://www.calpers.ca.gov/docs/forms-publications/irc-415b-fact-sheet.pdf

    UC has a 415(m) plan as well: http://ucnet.universityofcalifornia.edu/compensation-and-benefits/retirement-benefits/ucrp/415m-restoration-plan.html

  10. #55
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    For the UC, there may be an argument to attract and compete (arms race). But that the $400k/yr chief is hopefully a rare occurence of 'gaming the system'. There may be more to the story of that indivdual as well (i.e. he ran into a burning building and saved the grandchildren of PERS board members).

  11. #56
    Quote Originally Posted by BeachedBear View Post
    For the UC, there may be an argument to attract and compete (arms race). But that the $400k/yr chief is hopefully a rare occurence of 'gaming the system'. There may be more to the story of that indivdual as well (i.e. he ran into a burning building and saved the grandchildren of PERS board members).
    I wish. I fear it is just poorly written rules. If your pension is based on final year compensation and you are willing to bust your ass for a year you can pretty easily double your normal compensation, then add on cashing in vacation, sick leave, etc. After one tough year you have a pension that exceeds your normal salary. I think the systems have wised up. I don't think you can do it anymore but the way I understand pension law, they cannot change the rules an employee was hired under. They change them for the 'next hires'.

  12. #57
    Actually the UC plan allows UC to terminate the 415(m) plan at any time. Because it's non-qualified no doubt. But you need the political will to do it.

  13. #58
    I've been at my company 35 years, and just turned 65. For the first 7 or 8 years I was in a profit-sharing plan, which consisted of the company putting 5% of your pay into a fund each year. Then, they started a defined pension plan: The pension is 1 1/2 % times the number of years in the program, to a maximum of 30 years, times the average of the three highest pay years. So, if you're in for 30 years you get 45% of your highest pay. Not on the level of some of the public sector pensions, but hey, it's something. The profit-sharing funds were rolled into a 401K. I am very grateful for the pension plan, as many companies don't offer one. Staying at the same company for 35 years might seem incredibly strange for the job-hopping Silicon Valley set but it's perfect for me as the company is just a few miles from where I grew up and live and raised my family. I worked in downtown Oakland for 8 years after I graduated from Cal in 1973 and then moved home with my wife to this company. In the processing plants, as it's a food company, it is not uncommon for workers on the lines to be there for 40 years or more, husband and wife in many cases. The wages are not comparable in any way to urban areas but with a cost of living (more specifically, housing costs) a fraction of the Bay Area they can have a good, if modest, life. It's certainly not for everyone; I'm a cost accountant and in the administration ranks 35 years is very rare. But I am very happy and grateful for the company. That's a good thing to have.

  14. #59
    Quote Originally Posted by Larno View Post
    I've been at my company 35 years, and just turned 65. For the first 7 or 8 years I was in a profit-sharing plan, which consisted of the company putting 5% of your pay into a fund each year. Then, they started a defined pension plan: The pension is 1 1/2 % times the number of years in the program, to a maximum of 30 years, times the average of the three highest pay years. So, if you're in for 30 years you get 45% of your highest pay. Not on the level of some of the public sector pensions, but hey, it's something. The profit-sharing funds were rolled into a 401K. I am very grateful for the pension plan, as many companies don't offer one. Staying at the same company for 35 years might seem incredibly strange for the job-hopping Silicon Valley set but it's perfect for me as the company is just a few miles from where I grew up and live and raised my family. I worked in downtown Oakland for 8 years after I graduated from Cal in 1973 and then moved home with my wife to this company. In the processing plants, as it's a food company, it is not uncommon for workers on the lines to be there for 40 years or more, husband and wife in many cases. The wages are not comparable in any way to urban areas but with a cost of living (more specifically, housing costs) a fraction of the Bay Area they can have a good, if modest, life. It's certainly not for everyone; I'm a cost accountant and in the administration ranks 35 years is very rare. But I am very happy and grateful for the company. That's a good thing to have.
    Your career mirrors mine in many ways. And it does afford for a good, modest life even in the bay area. Sadly, this type of career seems to be non-existent now. Huge pay for upper management and a constant need to appease investors at the expense of employees seem to be the reasons.

  15. #60
    Quote Originally Posted by travelingbears View Post
    Pension benefits are worse off now because pensions are a huge financial burden to a company/ organization; it's a huge competitive disadvantage. People are living longer and pensions really put a hindrance in an organization's ability to compete with limited resources.

    While I did work for a company that offered a pension, I have very mixed feelings about pensions and social security overall. Most employees don't have pensions to rely on when they retire; that's where saving for your own retirement (e.g., 401k) come into play.

    I might be in the minority with my feelings, but wanted to offer a different perspective for a healthy conversation.
    Please read "Retirement Heist" by Ellen Schultz. She clearly shows that there's absolutely no corporate pension "crisis." It's simply a crisis of the executives not keeping up with the other executive Jonses.

    Rank and file worker pensions have been robbed blind in exchange for obscene executive compensation packages. Schultz's book outlines it in detail.

    Stop buying this crap!




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