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Old 04-03-2010, 09:41 AM   #41
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donheff,

That is one of the reasons that I don't completely buy into the fact that public pensions are going to break the back of governments. The data that is used to calculate how fully funded a pension is is faulty. Those figures are based on worst case scenarios and assume that everyone within the system with collect a full pension, when in fact that percentage of people who stay and collect anywhere near a full pension is very small.

Every time someone leaves before they are vested, they take out their contributions but the employer contribution stays in the fund and grows forever. Also, a lot of people leave after vesting and are foolish enough to take their money out. Those people take theirs and the employers contributions but the plan never has to pay them a cent in the future.

If everyone who hired on stayed for 30 years and was paid a full pension, then I'm sure most public plans would go bust, but that's never going to happen. The whole thing is overblown in my opinion.

My point is that if you are correct (and I agree with you) that most new hires will leave after a few years and pull out their contributions with no match and they don't ever collect a generous pension, then how in the world are DB pensions really going to be the end of society as we know it as everyone seems to think?
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Old 04-03-2010, 10:01 AM   #42
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Quote:
Originally Posted by utrecht View Post
My point is that if you are correct (and I agree with you) that most new hires will leave after a few years and pull out their contributions with no match and they don't ever collect a generous pension, then how in the world are DB pensions really going to be the end of society as we know it as everyone seems to think?
Could be but I thought we were reacting to people cautioning the OP to be cautious about choosing the DB over the DC. Statistics counsel that OP will be one of the many who move on thus the DC may be the prudent choice. On the other hand, if the differences are not great and the OP believes he has a better chance than most of staying put (he did mention family and other considerations) it may be prudent to go that way.

Hey OP -- what was you final choice? I don't remember seeing the answer.
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Old 04-03-2010, 10:34 AM   #43
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He went with the DB: see Post #36.
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