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Old 07-25-2013, 06:58 PM   #21
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Mine has a combined contribution percentage of 36%. Just a few days ago it was announced that its returns ranked in the top 1% of all public pension funds having over $1billion. Its also has the absolute highest 20 year returns of any public pension fund in the State of Texas. The pension fund is a separate entity from the City. The City cant access the funds and has no say so in how it is managed. It stands to reason that I take offense when people lump all pensions into the same bad boat.

There is no reason why all pension funds couldn't and shouldn't be managed as well as this one is. If that was the case we wouldn't be having all of these pension discussions.
If you do not mind me good natured teasing you a bit Utrecht since I am a pensioner too. But, wow, 36% combined? I thought my matched rate of 29% was high. That is almost 25% higher. With that kind of contribution rate and top 1% fund management, there should be enough money left over to provide all the homeless people in Texas a small pension too!
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Old 07-25-2013, 07:05 PM   #22
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Given your huge savings of 29% and 36% of gross, you should be able to do well with a 401k type of retirement account too, I would say.

Then, it's your money and you do not have to explain to anybody, and also have total control. Do you think future and young employees prefer that? Is there any movement towards that?

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With that kind of contribution rate and top 1% fund management, there should be enough money left over to provide all the homeless people in Texas a small pension too!
Eh, charity should be voluntary, not forced.
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Old 07-25-2013, 07:14 PM   #23
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I have a non cola pension, but it is capped at 35% of income after 35 yrs of service. There's also an early option to get half that if you retire at 55 vs 65.


There's rumblings about it being too expensive, but I work for a private employer required to make pension fund contributions each year. I'd personally rather just have a pay raise and invest the money myself,
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Old 07-25-2013, 07:17 PM   #24
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There are often youngish employees who feel they could do better on their own. With reform that number will increase. Remember if passing before you retire there is no pension form your spouse. How's your contributions are handled varies with the pan.
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Old 07-25-2013, 07:36 PM   #25
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There is no reason why all pension funds couldn't and shouldn't be managed as well as this one is. If that was the case we wouldn't be having all of these pension discussions.
Here is one article comparing pension fund management to and indexed approach over the last five years. State pension funds have a 1.5 % annual gain versus 2.19 percent for the indexed approach.

Active Managers Fail State Pensioners

Here is another one written in 2011 looking at a 10 year return. State pension funds have a 3.15 annual gain versus 6% for the index approach.

An Easy Way to Reduce State Debt

Hmm...
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Old 07-25-2013, 07:37 PM   #26
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There's rumblings about it being too expensive, but I work for a private employer required to make pension fund contributions each year. I'd personally rather just have a pay raise and invest the money myself,
+1 If I could do it again and get the above deal, that would be my choice also.
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Old 07-25-2013, 07:39 PM   #27
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Given your huge savings of 29% and 36% of gross, you should be able to do well with a 401k type of retirement account too, I would say.

Then, it's your money and you do not have to explain to anybody, and also have total control. Do you think future and young employees prefer that? Is there any movement towards that?

Eh, charity should be voluntary, not forced.
Ask me on my last breath whether overall, it was a good deal or not! If I had worked in the private sector, and liked to move around, the 401k would have been the better play. But here in my state, the retirement system that I worked under is portable, so even though I moved often, the pension followed me around. At this point, the tide has shifted. I do not see ultimately how most of the public pension systems don't move to a hybrid system at the very least, even if it takes a few decades. It becomes more apparent as the biggest wave of private pensioners slowly die off, leaving mostly government pensioners vs. public 401kers. I have not heard of many private companies giving a 14.5% match on 401k contributions. It is not a slam dunk though. If I die tomorrow, then I am a big loser as I have no meaningful assets to pass on. Or if I bounce around in a couple different government pension systems, the payout could be quite low. But monthly, security wise, you cannot beat a pension with a COLA starting out each new year.,
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Old 07-25-2013, 08:08 PM   #28
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Here is one article comparing pension fund management to and indexed approach over the last five years. State pension funds have a 1.5 % annual gain versus 2.19 percent for the indexed approach.

Active Managers Fail State Pensioners

Here is another one written in 2011 looking at a 10 year return. State pension funds have a 3.15 annual gain versus 6% for the index approach.

An Easy Way to Reduce State Debt

Hmm...
My pension fund has a 10 year return of 8.5%, after management fees, as of Dec 31, 2012.
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Old 07-25-2013, 08:24 PM   #29
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"I've never heard of a pension which provides "80%" of a person's salary"

You need to check out San Francisco Fire Dept's pension - one can get up to 90% of their highest salary w cola. Not sure if OT is included in that calculation...if so,

A lieutenant at Station 39 on Portola Avenue collected $221,000 in overtime last year, raising his total salary to $363,000, according to the San Francisco Chronicle.

A paramedic-firefighter at Station 51 in the Presidio made $191,000 in overtime, taking his pay to $337,204, while three battalion chiefs made $113,000 to $124,000 each in overtime, boosting their pay to $316,000 to $332,000 each, the San Francisco Chronicle reported on Wednesday.

Read more: San Francisco firefighter makes $221,000 in OT due to understaffing | Fox News
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Old 07-25-2013, 08:31 PM   #30
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Given your huge savings of 29% and 36% of gross, you should be able to do well with a 401k type of retirement account too, I would say.

Then, it's your money and you do not have to explain to anybody, and also have total control. Do you think future and young employees prefer that? Is there any movement towards that?


Eh, charity should be voluntary, not forced.
I'm not sure what you mean by 29% and 36%. The combined contributions to my pension between me and my employer is 36%. The 29% number quoted wasn't about me.

Like everything else, there are pros and cons to a DB pension. My pension benefit is going to be higher than if the same amount of money had been invested in a 401k all these years, but I have no flexibility in changing jobs
multiple times in a lifetime like most people do nowadays. I also wont be leaving a large lump sum to my heirs when I die like I would if all my pension contributions had gone to a 401k so its a trade-off.

From the conversations I've had with young people where I work, most of them are clueless about all of this. Most of them have no idea we have one of the best pensions in the country. All they care about is now, not later. There is no movement towards moving away from a DB pension here. There was a group trying to get a law passed to ban all public pensions in Texas but they failed miserably. Most of their arguments about why public pensions needed to be eliminated were baseless, not to mention studies showed it would cost billions to switch everything in the State from DB to DC.
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Old 07-25-2013, 08:35 PM   #31
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I'm not sure what you mean by 29% and 36%. The combined contributions to my pension between me and my employer is 36%. The 29% number quoted wasn't about me.

Like everything else, there are pros and cons to a DB pension. My pension benefit is going to be higher than if the same amount of money had been invested in a 401k all these years, but I have no flexibility in changing jobs
multiple times in a lifetime like most people do nowadays. I also wont be leaving a large lump sum to my heirs when I die like I would if all my pension contributions had gone to a 401k so its a trade-off.

From the conversations I've had with young people where I work, most of them are clueless about all of this. Most of them have no idea we have one of the best pensions in the country. All they care about is now, not later. There is no movement towards moving away from a DB pension here. There was a group trying to get a law passed to ban all public pensions in Texas but they failed miserably. Most of their arguments about why public pensions needed to be eliminated were baseless, not to mention studies showed it would cost billions to switch everything in the State from DB to DC.
NW was referring to you and me, both. I was the 29% (14.5% employer/employee match).
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Old 07-25-2013, 08:37 PM   #32
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OK, gotcha.
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Old 07-25-2013, 09:16 PM   #33
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I definitely feel sorry for the people who could be faced with a loss of pension, especially the ones that did not have the opportunity to contribute to SS. These people could be in a potential nightmare situation.
From what I've read, that is the situation in Detroit: The workers had pensions, but no social security. So it definitely is a nightmare for them if their pension gets reduced.
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Old 07-25-2013, 10:13 PM   #34
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My co. went with a lump sum option in the late 90's.
(and cut the defined benefit option for employees not making a magic number of age and yrs of service - 60 points.) Us folks got more or less halved that didn't make it.
Regardless, I don't recall anyone taking the annuity option given the choice.
For reasons mentioned in this thread.
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Old 07-26-2013, 06:46 AM   #35
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From what I've read, that is the situation in Detroit: The workers had pensions, but no social security. So it definitely is a nightmare for them if their pension gets reduced.
That is the problem with states that are all pension and don't participate in SS. Higher pension but eggs all in one basket. Either way investments are essential.
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Old 07-26-2013, 07:05 AM   #36
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I'm not concerned at all. Ours is fully funded, always has been. And yes, it's a public service pension, COLA'd, and no they don't offer it anymore, haven't to new hires since the early '80's. The new plans have been tweaked several times but are essentially hybrids of the old one and 401(k)s. (Or more accurately 457 accounts.)

And with credit for unused sick leave I went out at 70% of the last year's pay. The highest one could go was 72% and after that there was no further pension benefit increase.

All that said it is a high-risk job. About 20-25% go out with (well deserved) disability pensions. They are not easy to get and not one said they'd rather have that than the injury that led to forced retirement.

And I went to eight line-of-duty funerals.
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Old 07-26-2013, 09:00 AM   #37
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"I've never heard of a pension which provides "80%" of a person's salary"

You need to check out San Francisco Fire Dept's pension - one can get up to 90% of their highest salary w cola. Not sure if OT is included in that calculation...if so,

A lieutenant at Station 39 on Portola Avenue collected $221,000 in overtime last year, raising his total salary to $363,000, according to the San Francisco Chronicle.

A paramedic-firefighter at Station 51 in the Presidio made $191,000 in overtime, taking his pay to $337,204, while three battalion chiefs made $113,000 to $124,000 each in overtime, boosting their pay to $316,000 to $332,000 each, the San Francisco Chronicle reported on Wednesday.

Read more: San Francisco firefighter makes $221,000 in OT due to understaffing | Fox News
Do you think this is the norm for the vast majority of public employees nationwide?
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Old 07-26-2013, 09:10 AM   #38
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Do you think this is the norm for the vast majority of public employees nationwide?
Why that question? He didn't say, nor imply, that it was the 'norm'.

I saw it simply as a response to the earlier comment (underline mine) "I've never heard of a pension which provides 80% of a person's salary". So he gave some examples. Apparently, they exist, but that in no way indicates they are the norm.

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Old 07-26-2013, 09:53 AM   #39
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Do you think this is the norm for the vast majority of public employees nationwide?
The Houston police department gets headlines for this same stuff every now and then. recently, about a dozen higher up's in the police department got nabbed for faking time sheets while working off duty police work. I don't know what their pensions are like, but probably as lucrative as in other big cities and based on historical earnings somehow.
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Old 07-26-2013, 09:57 AM   #40
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I don't know what their pensions are like, but probably as lucrative as in other big cities and based on historical earnings somehow.
The only article on this I've seen lately is this one Just how generous are Detroit's worker pensions for retirees? - Jul. 23, 2013
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