hakuna matata
Recycles dryer sheets
I often hear and read that people will be or are resentful of public employees that have pensions. I guess I am a bit confused about this though. It seems that many people seem to think that this is tax dollar supported and my understanding is that it isn't. Or maybe I have a fundamental misunderstanding of the pension program which is certainly possible!
I personally work in the private sector, so my understanding of public pensions is limited. But my wife works for a public agency and will have 20 years in about 4 years and thus will be able to draw a partial pension and if she works for 30 years she can draw a full pension. As I recall at 20 years she gets like 30% of her best two years salary and even at 30 years she can only get like 60% of her best two years salary. Obviously thie pension is a part of our retirement plan and I would like to have a better understanding of how public pensions work.
But she has to pay a certain amount each month into her pension plan. She has no choice it is a mandatory requirement for employment, as I recall she automatically has 8% of her base salary drawn out for her contribution to the pension. As I understand it that is the money that is invested and then paid out. I do know the city matches that amount but she only gets that contribution if she stays until retirement. Is it this city contribution that is the source of the resentment? I assume though that her pension monies come from her contribution and the city monies are there to keep the plan solvent based on actuary charts.
On top of that but totally separate she can also contribute voluntarily to a 401k type program (which she does). So right now she has this 8% automatically taken out and then she does the additional $22k that a 401k allows. So a hell of a lot of money gets taken out of her paycheck!
So is her pension unique? Don't most public pension programs require participation and payment by the employees? Or am I totally misunderstanding how the public pension program works?
I personally work in the private sector, so my understanding of public pensions is limited. But my wife works for a public agency and will have 20 years in about 4 years and thus will be able to draw a partial pension and if she works for 30 years she can draw a full pension. As I recall at 20 years she gets like 30% of her best two years salary and even at 30 years she can only get like 60% of her best two years salary. Obviously thie pension is a part of our retirement plan and I would like to have a better understanding of how public pensions work.
But she has to pay a certain amount each month into her pension plan. She has no choice it is a mandatory requirement for employment, as I recall she automatically has 8% of her base salary drawn out for her contribution to the pension. As I understand it that is the money that is invested and then paid out. I do know the city matches that amount but she only gets that contribution if she stays until retirement. Is it this city contribution that is the source of the resentment? I assume though that her pension monies come from her contribution and the city monies are there to keep the plan solvent based on actuary charts.
On top of that but totally separate she can also contribute voluntarily to a 401k type program (which she does). So right now she has this 8% automatically taken out and then she does the additional $22k that a 401k allows. So a hell of a lot of money gets taken out of her paycheck!
So is her pension unique? Don't most public pension programs require participation and payment by the employees? Or am I totally misunderstanding how the public pension program works?