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67 is the new 55 ...
Old 06-20-2010, 12:27 PM   #1
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67 is the new 55 ...

... and if you think this is about speed limits, sorry to disappoint:
When It Comes To Retirement, 67 Is The New 55 : NPR
Alan Greenblatt writes about changes to official retirement ages around the world and for various public employees in the US.
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Old 06-20-2010, 01:31 PM   #2
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Good article. Here's another in NYT.

Payback Time - In Budget Crisis, States Take Aim at Pension Costs - NYTimes.com

What is interesting is many of these 67 retirement age changes are for future new hires only - many of the states are afraid of challenging the existing employees and unions.

I wish it were that easy. I don't see how these states can get budgets to balance without affecting existing employee pension details.
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Old 06-20-2010, 01:35 PM   #3
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In that case, I plan to be out of the corporate BS by the "old 45" and if all goes well with my wife's probable new career on the horizon, maybe even the "old 40"...
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Old 06-20-2010, 06:31 PM   #4
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Lets say all govt. employees have higher retirement ages to start collecting pensions.

OK that may help the actuarial numbers but does it affect employment if people stay in jobs longer and don't free them up for younger generations? Especially in Europe where the civil service sector is a big part of the labor market.
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Old 06-20-2010, 06:36 PM   #5
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Lets say all govt. employees have higher retirement ages to start collecting pensions.

OK that may help the actuarial numbers but does it affect employment if people stay in jobs longer and don't free them up for younger generations? Especially in Europe where the civil service sector is a big part of the labor market.
I agree that forcing people to stay in the work force longer frees up fewer jobs for people who need them, but I see no reason why government employees who have private sector equivalents should get a much sweeter retirement deal in the general case.

And when I look at the unrest occurring in Europe because of austerity measures and changes in civil service retirement, it's all the more reason to NOT get as entrenched in a civil service entitlement mentality as they have there.
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Old 06-20-2010, 06:49 PM   #6
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I agree that forcing people to stay in the work force longer frees up fewer jobs for people who need them, but I see no reason why government employees who have private sector equivalents should get a much sweeter retirement deal in the general case.

And when I look at the unrest occurring in Europe because of austerity measures and changes in civil service retirement, it's all the more reason to NOT get as entrenched in a civil service entitlement mentality as they have there.
I agree with you. However, if I were advising a young person in the USA as to where to get a job, I would recommend the federal government. That is one of the few places that will be able to provide a persons with a 'middle class' life - security, opportunities, health care, pension (and early retirement?), reasonable working hours and environment. We are following Europe - large government, health care, high taxes, systemic high unemployment, large debt, VAT.
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Old 06-20-2010, 06:54 PM   #7
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I heard though that state employees traditionally got lower salaries than the private sector so the unions negotiated these generous pension deals.

I don't know though, there are firemen who make $200-300k a year out here through overtime for doing "paperwork." And administrators of state universities and other large state institutions are doing pretty well too, although arguably, if they had comparable responsibilities and managed same number of people, there are opportunities to make way more money, especially with things like stock options.

I think in Europe, there are big conglomerates but they don't have as many employees as American corporations. Also labor laws make it more difficult to lay off people so a lot of companies won't create as many jobs.

The public sector got big because following WWII, probably because only govts. had the wherewithal to run big enterprises like airlines, telecom, etc. Those of course have been deregulated in the last couple of decades. Maybe the Marshall Plan funded the rebuilding of a lot of these govt. institutions too.

I don't think it's a civil service mentality so much as strikes and civil disobedience (mostly peaceful) are honored and more effective over there. Their unions haven't been gutted or castigated like they have in the US, as corporations successfully vilified them in the last 30 years, obscuring the fact that all the labor protections we enjoy now were fought for and won by the unions.

And really, if you were on a job where you had to work 20 or more years to collect your pension and you've been on the job for say 10-15 years and they decide to change the benefits, I think most of us would register some kind of discontent, no matter how fiscally necessary the changes.

I know there was some violence in Greece but I can't imagine most civil servants would engage in that. More likely, they had a public strike and in the big gathering, some people who may not even be directly affected tried to start something.
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Old 06-20-2010, 09:13 PM   #8
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I agree with you. However, if I were advising a young person in the USA as to where to get a job, I would recommend the federal government. That is one of the few places that will be able to provide a persons with a 'middle class' life - security, opportunities, health care, pension (and early retirement?), reasonable working hours and environment. We are following Europe - large government, health care, high taxes, systemic high unemployment, large debt, VAT.
I don't disagree. The federal government, unlike many state and local governments, dealt with the looming pension problem more than 25 years ago and they created a much more sustainable, truly three-legged retirement plan with FERS in the '80s.

State and local governments are not only often overpromising, but they MUST balance their budgets and can't print money, both of which are things the Feds don't have to deal with and are thus less likely to face an imminent pension crisis that must be solved immediately. I'm just saying that we probably don't want to make government employment such a widespread thing that it becomes impossible to reform civil service pensions when it's clear they are unsustainable (as many state and local plans are now). Plus, FERS is already a lot less generous than most imploding European retirement systems.
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Old 06-20-2010, 09:42 PM   #9
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The state I live in and work for, introduced an annuity-like alternative a long time ago as an option, along with the older pension system. It happened at least ten years ago as it was an option when I started.

When the subject comes up, which is rare, I have found that most new hires take the annuity system. The annuity system is pushed hard during the hiring process where you have to pick one. It is also set up so that if you pick the annuity you can't switch to the pension, but you can switch from pension to annuity at any time.

The average joe has no clue how to compare the two options and will almost always go with the one that is pushed more. My state has no pension issues by the way. If states want to know how to cut benefits for new hires, this is the way to do it.

Actually now that I think about it, the annuity option has been available for probably 20+ years. I know older workers that have been here at least that long and chose that option. It is a generous option, don't get me wrong, but it is not a pension. The state is not on the hook to pay into it any more than the yearly contributions.
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Old 06-20-2010, 11:46 PM   #10
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Originally Posted by explanade View Post
Lets say all govt. employees have higher retirement ages to start collecting pensions.

OK that may help the actuarial numbers but does it affect employment if people stay in jobs longer and don't free them up for younger generations? Especially in Europe where the civil service sector is a big part of the labor market.
I don't see this as a problem. If more people need gov't jobs because current workers are staying in their's longer, the gov't (whichever one) will just "create" new jobs, then "create" money to pay them with.
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Old 06-21-2010, 04:30 AM   #11
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We are following Europe - large government, health care, high taxes, systemic high unemployment, large debt, VAT.
Be careful of generalising about "Europe". Four of the top ten countries in the Global Competitiveness Index, from those pinko tree-huggeing hippies at the World Economic Forum, are Sweden, Denmark, Finland, and the Netherlands, all with large government, health care, high taxes, and VAT. Yes, France has systemic high unemployment, the UK - often considered, at least by its own government, to be highly competitive - has a massive deficit. But who would have expected cradle-to-grave security countries like Sweden and Denmark to beat the US on hiring and firing?
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Old 06-21-2010, 07:22 AM   #12
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I don't see this as a problem. If more people need gov't jobs because current workers are staying in their's longer, the gov't (whichever one) will just "create" new jobs, then "create" money to pay them with.
Increasing the money supply significantly can cause high inflation as the economy has excessive cash relative to the goods and services available. BTW, do we really need more government workers? Are these jobs really provide any useful or valuable services? Is it the role of government to provide additional services beyond those that are essential, i.e., security, infrastructure, education, environment, health and social services?
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Old 06-21-2010, 07:28 AM   #13
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... I see no reason why government employees who have private sector equivalents should get a much sweeter retirement deal in the general case.
The government sees the need to put on a golden handcuff to retain employees.
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Old 06-21-2010, 07:39 AM   #14
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However, if I were advising a young person in the USA as to where to get a job, I would recommend the federal government.
That's what I have preaching to our daughters. However, that idea has not sunk in yet. They simply think that government jobs are not that interesting and challenging. I told them that they have to think more about the retirement.
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Old 06-21-2010, 09:59 AM   #15
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BTW, do we really need more government workers? Are these jobs really provide any useful or valuable services? Is it the role of government to provide additional services beyond those that are essential, i.e., security, infrastructure, education, environment, health and social services?
We don't need more government workers because of the services they provide. The government needs to create jobs because the private sector isn't. We've done this for so long the voting block of gov't workers is so big it's political suicide to stand against it. The private sector will continue to shrink and gov't payrolls will increase, or unemployment will rise. So far any gov't take backs I've seen in pensions have only affected new hires. Try and take something back that was promised and we will be in the streets like Greece.
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Old 06-21-2010, 10:12 AM   #16
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We don't need more government workers because of the services they provide. The government needs to create jobs because the private sector isn't. We've done this for so long the voting block of gov't workers is so big it's political suicide to stand against it. The private sector will continue to shrink and gov't payrolls will increase, or unemployment will rise. So far any gov't take backs I've seen in pensions have only affected new hires. Try and take something back that was promised and we will be in the streets like Greece.
I don't think federal govt. workers are that big a voting block.

DC is not a big factor in national elections (presidential elections.).

VA could be but tends to support so-called small govt. candidates at least as often as candidates which would expand govt.

As for govt. creating jobs to make up for private sector, hopefully that's a temporary situation precipitated by the economic crisis.

When the stimulus was passed, a lot of economists wanted it to be at least a $1 trillion. Now, there's been some signs of job creation but there are still calls for focusing on long-term debt at the expense of short-term job creation and the ability to generate income to pay off that debt.
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Old 06-21-2010, 10:13 AM   #17
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So far any gov't take backs I've seen in pensions have only affected new hires. Try and take something back that was promised and we will be in the streets like Greece.
There's a difference between what is "promised" and what has already been earned.

Federal pension law prohibits taking away pension benefits for work already performed and service already accrued. That's even true for the now mostly-defunct private sector plans.

What has been "promised" based on future work can change (and usually has in the private sector). So even if public sector employers *completely* froze their pensions (and I'd expect another place down below to freeze also), someone two years from retirement with 30 years of service still gets a pension based on 30 years of service (mandated by federal law) plus whatever 403B contributions and matches in the last two years. I have a small pension due me for nearly 11 years of credited service from my first Megacorp which froze the pension on me. And that can not be taken away.

That's an important thing to remember. Some people see the threat of "taking my pension away." Federal law prohibits generally taking anything away that was already earned. So if someone is already earning a pension it's protected by federal law. At most they might change the COLA provision (if any) and even that would be of questionable legality.
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Old 06-21-2010, 10:31 AM   #18
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I don't think federal govt. workers are that big a voting block when many others don't.

As for govt. creating jobs to make up for private sector, hopefully that's a temporary situation precipitated by the economic crisis.
I don't think I used the word "federal". And one things for sure...gov't workers vote.

We need to stop kidding ourselves. If we created any jobs that mattered the federal deficit and the trade deficit would shrink instead of grow out of control. If gov't and service sector jobs created wealth, I would use the same logic and hire my children, pay them huge salaries, and we would all get rich.
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Old 06-21-2010, 10:33 AM   #19
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Federal pension law prohibits taking away pension benefits for work already performed and service already accrued. That's even true for the now mostly-defunct private sector plans.
I'm glad, because I'm one of those guys who put in his 27 years with the gov't.
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Old 06-21-2010, 01:01 PM   #20
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I told them that they have to think more about the retirement.
Good luck with that.

I don't think I even had retirement on my horizon, let alone ER, until I was a parent (age 32).
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