Guvmint COLA up 5.8%

[ziggy29]

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Originally Posted by Texarkandy No argument there. Then why the animosity towards current workers & retirees?

Not sure what you are talking about. I've consistently made it very clear that I believe that those already in the system should not have the rug yanked out from under them.

The animosity -- such as there is -- is not for people; it is for a system we can't afford to keep providing, and indeed where we risk a very real "taxpayer revolt" among the pension have-nots if they keep getting their taxes raised to maintain pension benefits for others even as they have theirs frozen and they watch their 401(k) plans approaching zero. (AND higher taxes mean less they can continue to fund their own retirements.) I'm speaking not so much for myself as for the growing sentiment that starts to bubble up when job security is tenuous and self-directed retirement plans are in melt down mode. I'm hearing a lot more about it and I think the best way to protect the promise to those those already given that promise is to stop making that promise in the future, at least in some fields.

Not a shred of contempt or animosity for those currently in such a system. Envy, perhaps, but not animosity. I understand that some are justifiably defensive about it, but jealousy (and yes, as the 401K withers, that feeling increases) and a few shreds of envy do not equal "animosity." I don't begrudge anyone of anything they have been promised. And if I have any animosity, it would be toward those who want to take away what has already been promised.

No one has anything to fear from someone who has no desire to take anything away from them, yet based on the responses you'd think I was advocating taking pensions and lifetime medical away from everyone who is already "in." And that's clearly not the case.

[W2R]

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Originally Posted by ziggy29 The animosity -- such as there is -- is not for people; it is for a system we can't afford to keep providing, and indeed where we risk a very real "taxpayer revolt" among the pension have-nots if they keep getting their taxes raised to maintain pension benefits for others

Imagine the animosity they would feel when their tax burden was raised much higher than that, to provide high enough salaries to attract people to fill federal jobs if they did not have these benefits?

20% of federal jobs in New Orleans remain unfilled even now, with the attraction of these benefits, despite aggressive recruiting nationwide. Without the benefits, would it be 80%? 90%? I shudder to think. The tax burden required to lessen the gap would be staggering. I suppose then the animosity might be directed elsewhere.

[ziggy29]

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Originally Posted by Want2retire Imagine the animosity they would feel when their tax burden was raised much higher than that, to provide high enough salaries to attract people to fill federal jobs if they did not have these benefits? .

Actually, in many cases it's worse in some state and local governments than at the federal level. We're hearing about an increasing number of state and local governments struggling to meet pension and health insurance obligations and in danger of going belly-up. Vallejo is the tip of the iceberg there. Indeed, we've heard about Birmingham heading that way, too.

Example: My wife applied for a job with the county a few months ago (didn't get it much to my chagrin). In that retirement plan, workers are required to put in (I think) 7% of their pay, and this plan matches $1.70 on the dollar for that entire amount AND the rate of return is set by statute at a guaranteed 7%.

So $100 in employee contributions immediately becomes $270 AND that $270 gets a guaranteed 7% without taking individual stock market risk. I would almost kill for her to get a job like that even if the pay were rotten. This is the type of thing that's harder and harder to justify when state and local coffers are really hurting and everyone's talking about raising taxes on everyone to maintain these benefit levels.

As for considerably lower pay than the private sector, this is becoming more and more of a myth in some cases. It also doesn't account for things like much more required, non-compensated overtime in the private sector.

[beowulf]

I've worked in all three universes - active military, civil service and private industry. I'm not positive, but I think my starting salary as a 2LT in 1969 was something like $350 a month. I was the only officer in my basic course who actually increased his salary by going into the Army. Of course, I had been a teacher in NYC making $5200 a year. And the other great benefit was that I went from a dangerous situation in a ghetto school to a dangerous situation where I had a M-16 and could at least shoot back .

Even now, military compensation is not anywhere near enough for the risks taken and the family hardships they must endure. Officers can do somewhat well, but the enlisted ranks, especially the lower levels, are in a real bind these days.

As to civil servants, there are many, many thousands serving in Iraq, Saudi Arabia, Korea, Afghanistan and similar exciting places - and they are all volunteers. They were in Vietnam and have been serving around the world. They do it for love of their country, not money. There are far fewer old time paper pushing bureaucrats now than you think.

As wanttoretire says, anyone can work for the federal government regardless of age (excpet for certain law enforcement and similar positions which are entry age limited). There are folks who come to the gov in their mid 50s so they can get health insurance they can carry for life after 5 years. They won't get any real retirement benefit for that little time, but they will get the insurance. As she also says, feds pay a LOT for their insurance - yes, it can be carried into retirement, but most large companies have better policies, much lower or no premiums and lower deductibles. The catch is they expect you to work until 65 and then get Medicare. Feds pay for Medicare also and receive little benefit from it.

I, too, go along with the sour grapes theory. You make your choices, live your life and then decide to complain it isn't fair that retirees (all getting payment from the gov, to include SS) get higher raises than you do?? You probably earn 5 to 10 times what the average retiree makes and you begrudge them the highest increase they have had in 26 years? Of those who still are working, I don't know a single privately employed person who is making less than they did 5, 10 or 15 years ago. YMMV.

You, too, will receive SS at some point - I'll bet you won't turn it back to the gov because you are so distressed about having to pay taxes for other's benefits and increases.

[Texarkandy]

Quote:

Originally Posted by ziggy29 Not sure what you are talking about. I've consistently made it very clear that I believe that those already in the system should not have the rug yanked out from under them.

Fair enough - perhaps it was your reference to paper pushing bureaucrats that gave me that impression - FYI I've done more than a few things in my varied federal career every bit as hazardous as being a GI in Iraq - remember also there are quite a few federal employees currently assigned in Iraq, and many of them not by choice.

Quote:

Originally Posted by ziggy29 The animosity -- such as there is -- is not for people; it is for a system we can't afford to keep providing, and indeed where we risk a very real "taxpayer revolt" among the pension have-nots if they keep getting their taxes raised to maintain pension benefits for others even as they have theirs frozen and they watch their 401(k) plans approaching zero. (AND higher taxes mean less they can continue to fund their own retirements.) I'm speaking not so much for myself as for the growing sentiment that starts to bubble up when job security is tenuous and self-directed retirement plans are in melt down mode. I'm hearing a lot more about it and I think the best way to protect the promise to those those already given that promise is to stop making that promise in the future, at least in some fields. Not a shred of contempt or animosity for those currently in such a system. Envy, perhaps, but not animosity. I understand that some are justifiably defensive about it, but jealousy (and yes, as the 401K withers, that feeling increases) and a few shreds of envy do not equal "animosity." I don't begrudge anyone of anything they have been promised. And if I have any animosity, it would be toward those who want to take away what has already been promised. No one has anything to fear from someone who has no desire to take anything away from them, yet based on the responses you'd think I was advocating taking pensions and lifetime medical away from everyone who is already "in." And that's clearly not the case.

You talk about your 401k here - a very big part of the "new" civil service retirement package nowadays consists of the Thrift Savings Plan - essentially a 401k (thanks Ronald Reagan). The Federal Government also considers Social Security to be part of our benefit package also. The "pension" portion of the retirement package is much reduced from what it used to be.

& in case you didn't know the federal retiree cola for most workers today is now CPI minus 1%. (thanks again Ronald Reagan) Better than nothing, yes, but not as good as it used to be.

So steps have been taken to trim federal benefits. This is far from your dad's civil service we have now.

I personally know some federal workers close to retirement who have lost $x00K in their TSP this year - they were heavily allocated toward the riskier C, S, & I stock market funds. Now they are rethinking retirement in the near future as are many in the private sector also, unfortunately some will be mandatory to retire due to age.

I took the safe & unprofitable route of moving my TSP to the G-Fund last year (100% US Treasuries) & didn't lose so much.

The point is we all make our choices & accept the prospective benefits & risk of those choices - & that includes choice of career as well as our investment choices.

[W2R]

Quote:

Originally Posted by restonham after 5 years. They won't get any real retirement benefit for that little time, but they will get the insurance.

Very true.

If my computations are correct, the "fat government pension" starting at age 62 will come to $208/month before taxes - - I am thinking around $145/month after taxes depending on whether or not there is any state income tax on federal pensions, or at all, in the state of residence.

This would be assuming that the last three of the five years averaged $50K in salary. Our administrative assistant is earning around $25K/year, so hers would be half the above after 5 years.

In general, the annual FERS pension is usually 1% of your hi-three salary times the number of years of service. Often it doesn't even make up for the SS lost due to the low salaries. I am grateful for mine though I think it is not as large as some people seem to think.

[FIRE'd@51]

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Originally Posted by Want2retire It's amazing that despite this, nobody wants these jobs. The negative aspects of deciding to take one of these jobs are that the pay is low, the work is less than scintillating, the prestige is non-existent - - but benefits are part of the deal too. I guess they just aren't valued as highly as salaries by most.

Are these jobs specific to New Orleans, or are they available to Federal job seekers in other areas of the country?

[Texarkandy]

Quote:

Originally Posted by restonham ... There are folks who come to the gov in their mid 50s so they can get health insurance they can carry for life after 5 years. ....

Just so nobody gets the wrong impression that if you work for the feds for 5 years you get health care for life simple as that. It's not.

You can't just work for the feds for 5 years & be automatically eligible for the group health insurance for life - generally you must be eligible (old enough) to "retire" directly from your federal employment & have been under an FEHBP plan for the 5 years preceding your retirement. To retire you must be of a specific retirement age.

There are some exceptions & rules about who does & doesn't get to continue FEHBP & who is eligible for reinstatment later on.

An example is the exception for deferred pensions:
If you had ten years or more Fed Service, separated from govt work after reaching your MRA but postponed receiving your annuity (it's reduced for every year younger than age 62, even if you have passed your MRA), you lose your health coverage after leaving federal employment but are eligible to reenroll when you do start getting your retirement check. (but only if you participated in the program for 5 continuous years prior to leaving federal service)

If you work for the Feds for a few years, quit & go private sector, you can keep your FEHBP health plan under TCC but you must pay the full premium + a 2% administrative fee.

For those not familiar with the "free" health insurance people keep telling me I get as a federal employee, here's a current example:

Blue Cross standard family plan
(pretty good plan - doesn't pay everything, but pretty good)
Total premium = $13455.
Employee pays $4279. per year
Govt pays $9166. per year

Good - but certainly not "free".

[W2R]

Quote:

Originally Posted by FIRE'd@51 Are these jobs specific to New Orleans, or are they available to Federal job seekers in other areas of the country?

The ones I am aware of are like any other job. You can apply from anywhere, but you must compete for the job and demonstrate that you have the knowledge, skills, and ability to perform the work. If you get the job, then you must move here to report for work. For specifics to go http://www.usajobs.opm.gov

[Khan]

Quote:

Originally Posted by Want2retire Very true. If my computations are correct, the "fat government pension" starting at age 62 will come to $208/month before taxes - - I am thinking around $145/month after taxes depending on whether or not there is any state income tax on federal pensions, or at all, in the state of residence. This would be assuming that the last three of the five years averaged $50K in salary. Our administrative assistant is earning around $25K/year, so hers would be half the above after 5 years. In general, the annual FERS pension is usually 1% of your hi-three salary times the number of years of service. Often it doesn't even make up for the SS lost due to the low salaries. I am grateful for mine though I think it is not as large as some people seem to think.

Just to mention: FERS is not COLAd until age 62; also at age 62, the supplement to my pension (I took an early out offer) is dropped by ~$7000/year, apparently assuming I will take SS at that time although my SS age is 66.

[W2R]

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Originally Posted by Khan Just to mention: FERS is not COLAd until age 62; also at age 62, the supplement to my pension (I took an early out offer) is dropped by ~$7000/year, apparently assuming I will take SS at that time although my SS age is 66.

I am tentatively planning on taking SS at 66 too, though that is subject to re-evaluation and change as the market declines. I will only have 6 months between retirement and 62. No supplement, and I will only miss out on one year's diet-COLA.

I have been thinking about that 4 year gap that you mention, and I have a plan.

Until age 66 I plan to "pay myself SS" by means of equal monthly payments from my TSP (=401K for those who don't know). Much of my TSP is in G Fund instead of equities, so I won't have to sell stocks to do that. Once I turn 66 I will decrease the equal monthly payments from the TSP accordingly.

[FIRE'd@51]

Quote:

Originally Posted by Want2retire 20% of federal jobs in New Orleans remain unfilled even now, with the attraction of these benefits, despite aggressive recruiting nationwide.

Quote:

Originally Posted by Want2retire It's amazing that despite this, nobody wants these jobs. The negative aspects of deciding to take one of these jobs are that the pay is low, the work is less than scintillating, the prestige is non-existent - - but benefits are part of the deal too. I guess they just aren't valued as highly as salaries by most.

Quote:

Originally Posted by FIRE'd@51 Are these jobs specific to New Orleans, or are they available to Federal job seekers in other areas of the country?

Quote:

Originally Posted by Want2retire The ones I am aware of are like any other job. You can apply from anywhere, but you must compete for the job and demonstrate that you have the knowledge, skills, and ability to perform the work. If you get the job, then you must move here to report for work. For specifics to go http://www.usajobs.opm.gov

W2R,

I guess my question wasn't posed clearly. Mightn't the jobs remain unfilled because of their location, as opposed to people valuing higher salaries over benefits? Clearly, 20% of Federal jobs don't remain unfilled elsewhere in the country.

[Texarkandy]

Quote:

Originally Posted by FIRE'd@51 W2R, I guess my question wasn't posed clearly. Mightn't the jobs remain unfilled because of their location, as opposed to people valuing higher salaries over benefits? Clearly, 20% of Federal jobs don't remain unfilled elsewhere in the country.

That's got quite a bit to do with it.

I started out in a location not considered exactly a "garden spot" and have moved four times in my federal career to get to where I'm at. Part of the price some have to pay if they want to move up in one of these "sweet" federal jobs.

As I mentioned previously, Border Patrol recruiting is down - anybody wanna go live in Laredo?

[beowulf]

Quote:

Originally Posted by Texarkandy Just so nobody gets the wrong impression that if you work for the feds for 5 years you get health care for life simple as that. It's not.

Sorry, I was being overly simplistic. There are a lot of rules that have to be complied with and you described them well. And as others have said, the pension one now would get under FERS after 5, 10 or 15 years with the government, assuming full retirement age, is not enough to live on without SS and TSP.

[Gardnr]

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Originally Posted by Texarkandy - anybody wanna go live in Laredo?

No thank you!

I spent 4 years (1 yr and then 3 yrs later) in Del Rio. I've had my fill of the bleak West Texas landscape, thank you very much. Not my cup of tea.

[Rustic23]

Gardnr,
Your answer is proof of a point made in another thread about government jobs. They are available, they do provide good retirement packages. They have too in order to attract the quality and quantity of employees they are looking for.

One poster stated he had tried to get a government job but was unsuccessful. A willingness to relocate is part of the problem. However if one is willing to give up 30 years of their life and live in Del Rio, Laredo, or Marfa Texas, then there is a job waiting for you!

[Keyboard Ninja]

Quote:

Originally Posted by Rustic23 Gardnr, Your answer is proof of a point made in another thread about government jobs. They are available, they do provide good retirement packages. They have too in order to attract the quality and quantity of employees they are looking for. One poster stated he had tried to get a government job but was unsuccessful. A willingness to relocate is part of the problem. However if one is willing to give up 30 years of their life and live in Del Rio, Laredo, or Marfa Texas, then there is a job waiting for you!

Sweet! Being a Houston native I wouldn't mind going down there. It may even help me with my Spanish

[Independent]

Lots of discussion, but nobody has mentioned WHY gov't pensions may be higher than private. Shouldn't the mix of cash compensation and benefits be about the same for gov't and private? If not, why not?

I can see a difference for DB pensions. If a private firm promises a defined benefit pension to an employee, that firm has to take cash out of revenue and put it into a trust dedicated to guaranteeing the pension. It hits the all-important bottome line this year. They "have to" because of federal law.
But, if the federal gov't promises a defined benefit pension to an employee, it makes a promise and lets the next generation of taxpayers worry about it.

(I believe the federal accounting actually involves a "trust fund" for pensions. But since the trust fund only "invests" in federal bonds, and politicians always point to the unified budget, the effect is that they ignore the promise.)

[Bestwifeever]

Wow, this is an easy argument:

Work for the government? Defend its pension system.

Don't work for the government? Not crazy about its pension system.

Last night someone was talking about a judge in our area who is retiring at 55 after 20 years and will get 85% of pay plus full medical, AND is taking a job as a partner in a law firm, similar to military retirees who go work for private sector firms (the possible conflict of interest in these arrangements is food for another thread).... Intellectually most people understand why that pension is a contractual obligation, but from a financial standpoint, non-government employed people see that as "why are the taxpayers paying for that?"

Are pensions ever means-tested vs. earned income after "retiring"?

[FIRE'd@51]

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Originally Posted by Bestwifeever Are pensions ever means-tested vs. earned income after "retiring"?

So far as I know they are not. SS is however, if you are not full retirement age. Sort of strange isn't it? :confused: