By: secretsquirrel on 7/26/10
Looks like the FDN found their next issue to research: What retirement benefits do public employees receive and what is the average monthly income of a public retiree?
I never knew that firefighters had this plan. It would be interesting to see how much per month the average public employee (firefighters, police, administrators, teachers, school administrators, mechanics, custodial, maintenance, street, attorneys etc.).
This makes me wonder how much of the school budget is eaten up by retirements packages (not just retirement pay but the total money/benefit/privilege deal). What type of health insurance, who pays, what it covers etc.
I think such a story would be fascinating.
But, that's just me.

By: Chris on 7/26/10
Outside of some of our more knee jerk "government is the problem" commentators, I suspect most of the public would not be shocked to learn that 35-40 years of public service gets you a solid, comfortable, but far from extravagant retirement. I suspect those who retire well do so by also saving in a deferred compensation or IRA plan. Each union contract comes with a fund paid for by employee contributions and employer money. This mix of funding is not unlike the retirement plans of most big fortune 500 companies. The difference is, in the public sector any changes are a matter of legislation, and that the government hasn't gone away from pensions to defined contribution plans like 401Ks. I do think the public would be interested in some of the early retirement plans for public safety professions like corrections officers, firefighters, and police. The "hybrid" plan mentioned in the piece for prison guards and other staff with substantial offender contact is probably a more efficient model from a local government perspective as it shifts some costs later in retirement back onto the social security system. I would be interested to know which is a more efficient use of both federal and local tax dollars combined.

By: secretsquirrel on 7/26/10
I was hoping you'd show up Chris! :) On subjects like these you never fail to offer informed, intelligent information.
It just seems that retirements are managed much better for upper echelon private sector people and most all public retirees.
Most of the people I speak with in my day-to-day dealings with them have no pension, 401k nor the wherewithal to make a significant contribution to a retirement plan.
I think that lack of means and financial planning ignorance are the two greatest factors in peoples unpreparedness for retirement.
As for the cost of retirement packages, there is little that I have read or seen reported on how they are constructed, how the responsible arm of government funds these retirements and if there is a point where the burden of pensions matches the burden of payroll for active employees. With the financial market not doing so hot lately, are these pensions affected since most of them are invested?
This is what I'm driving at:
Better health care insurance means better health in most instances.
Better health means a longer life.
A longer life means a longer payout of benefits.
Could this longer life span have an effect on what we have been paying out all along?

By: Paperboy on 7/27/10
You want to deal with pension issues?
How about the total collapse of private AND public pensions?
Think it's not happening?
Fitch study indicates that 86% of defined benefit pension plans were underfunded, when computed according to generally accepted accounting principles (GAAP)The median rate of underfunding is 21% many large corporations have nearly a 50% underfunding.
Guess who's covering corporate greed AGAIN by paying for unfunded and under-funded pensions while corporations are paying huge bonuses to
management...you guessed it, us.

http://moneycentral.msn.com/content/p87329.asp

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Almost-half-of-top-unions-have-underfunded-pension-plans--47162127.html

By: Chris on 7/27/10
Indeed, the biggest problem with pensions is that they are subject to the performance of their investments. They tend to be very conservative, but still will head toward insolvency during downturns in the market. In the public sector, these funds have occasionally needed an injection of cash from the general fund, at taxpayer expense. In MN this has been rare, and the AFSME an MAPE funds have been solid.

The issue with a lot of private company pensions, is that, like social security, they often depend on today's workers to pay for yesterday's retirees. If a company has a much smaller workforce today, say like a car company, than it was decades ago, this creates a big structural problem. Throw in the biggest recession since the 1930s on top and you have a really big problem.

This issue isn't applicable to government pensions. The actual government workforce isn't likely to get much smaller unless you really want to kill publicly funded colleges or eviscerate a major department like DHS.