Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 02-15-2014, 07:59 AM   #141
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,804
Quote:
Originally Posted by Leonidas View Post
Defined Benefit Pension from law enforcement for a major city in Texas. The system has undergone multiple changes since inception (1940s), but at the time I retired at 45 I received 50% of regular pay (based on last paycheck) for the first 20 years of service, plus 2% for each subsequent year, plus the monthly average of all additional pay received over the last 12 months. It's COLAed at 75% of the local CPI capped with a floor and a ceiling.

The pension is a governmental subdivision of city government, but the elected officers are primarily current and retired employees, with representation from the Mayor and the City Controller. In other words, the political machinations from politicians is minimal and muted. The system is quite healthy, funded at about 85%, and would be better if previous city administrations had not created problems by taking funding holidays, and bribing active employees with manipulated pension increases in lieu of salary hikes.

The pension system sued the city over the underfunding and manipulations when a new mayor was elected. The lawsuit was settled by means of a contract between the city and the pension system that fixed some of the errors, reduced benefits for new hires, and allowed the city to spread out payments to fix the underfunding. The results is that there is still some drag on the city budget as a result, but the situation is much better than most other major cities in the country.

I was a participant in a DROP plan for 5 years before retiring, and that money was rolled over into a traditional IRA that I am not yet eligible to receive regular distributions from because of my age.

In addition, I started investing in the early 1980s and have a steady stream of income from the resulting portfolio.
Sounds like an opportunity to 'pension spike.' How does the govt prevent this? And, if they don't, how do they afford it?
__________________

__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-15-2014, 11:13 AM   #142
Thinks s/he gets paid by the post
Leonidas's Avatar
 
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
Quote:
Originally Posted by Huston55 View Post
Sounds like an opportunity to 'pension spike.' How does the govt prevent this? And, if they don't, how do they afford it?
It's not like that currently. I retired in 2004 just as my pay maxed out, and just as the new contract fixing it all went into effect.

The insane thing is that the government is the one that deliberately created the situation. It was before the Great Recession and they were desperate for new hires - $15-20,000 signing bonuses were the norm - and equally desperate to keep existing employees at a time when over 50% were eligible for retirement. They back-loaded the 2001 contract with new pays, and ways of calculating pays, that artificially boosted pension payouts without crushing the budget. It kicked most of the salary costs down the road to the next administration entering in 2004, and it was something of an end-run around the pension system which was not then a party to the collective bargaining agreement.

You were quoting me from late 2000 when I heard rumors of the pay structure that was going into effect with the new contract. Standing in a hallway with a number of colleagues when I heard the numbers, I asked, "Can the City afford that?" They were silent, and looked at me like I was speaking Urdu.
__________________

__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
Leonidas is offline   Reply With Quote
Old 02-15-2014, 12:00 PM   #143
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by imoldernu View Post
will necessary cutbacks (if needed) be spread out to everyone. (Thinking the Chicago Teachers Pension Funds).
Actually, while there is some talk about Chicago teachers having a pension haircut, nothing has been done as of yet. Non-Chicago teachers, State University System employees and direct employees of the state have had their already earned pensions reduced effective later this year. This followed an earlier action to reduce the not yet earned benefits for new hires.

Personally, I think it's a coin toss as to whether Chicago teachers ever see a reduction to already earned pension benefits based on what's happened so far.

In Illinois, the pain is definitely NOT being spread out to everyone.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 02-15-2014, 01:46 PM   #144
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,426
Quote:
Originally Posted by Ozstache View Post
Semi-COLAed military pension, initially covering all living expenses and with investment stash covering the taper down, kicking in next Thursday.
Congratulations!
__________________
Married, both 62. DH retired June, 2010. I have a pleasant little part time job.
Sue J is online now   Reply With Quote
Old 02-15-2014, 05:53 PM   #145
Recycles dryer sheets
 
Join Date: Feb 2013
Posts: 101
Quote:
Originally Posted by Sue J View Post
Congratulations!
Thanks. I liken it to a glider analogy, whereby my employer has not only given me the power assistance I need to climb to the release altitude through the salary they have paid me over the years, but they have also given me a fine set of wings of a pension to slowly glide back to earth over the rest of my life and helped fuel the investment stash that will give me thermal boosts to further prolong the glide phase. I am very grateful for it all!
__________________
Ozstache is offline   Reply With Quote
Old 02-16-2014, 10:49 AM   #146
Recycles dryer sheets
twolfy's Avatar
 
Join Date: Jun 2011
Posts: 143
Two small non COLA pensions. One starts at 62 and the other at 65. Need to see if the one at 62 can be delayed to 65 and have it increase in value. Shouldn't really need it until then.
__________________
twolfy is offline   Reply With Quote
Old 02-16-2014, 01:48 PM   #147
Recycles dryer sheets
 
Join Date: Jul 2010
Location: Torrance
Posts: 112
When I retired from Megacorp at 55 2.5 years ago I had the option of a $60K/year lifetime COLA'd pension or a 5-year $2.1M "lump sum" payout (i.e. $35K/month for 60 months). I gave up about $30K to make it "period certain" - if I croak before the five years are up my wife and kids will continue to get the balance.

I am halfway through rolling the 60-month payout into a Vanguard IRA, and I lumped-summed my $600K 401K account into a Fidelity IRA. Wife will get a $38K COLA'd pension if she continues teaching for another seven years. I *hope* to get about a $24K SS pension at 66. We spend ~$100K a year but we have two teenaged kids.

My AA is about 50/50 stocks/bonds. After temporarily losing $45K during 2014's hiccup I'm thinking of dialing it back to 25/75. We've already won the game and I'm too much of a skinflint to deal with losing hundreds of thousands in a major downturn.
__________________
bob boag is offline   Reply With Quote
Old 02-16-2014, 07:38 PM   #148
Recycles dryer sheets
twolfy's Avatar
 
Join Date: Jun 2011
Posts: 143
Bob, are they hiring engineers at your old company? I need to steer my son that direction if so. Thats a nice retirement plan if they still offer it.
Tom
__________________
twolfy is offline   Reply With Quote
Old 02-16-2014, 09:31 PM   #149
Recycles dryer sheets
jfn111's Avatar
 
Join Date: Jan 2014
Location: Bloomington, MN
Posts: 205
Worked 33 years for big evil corp and retired, at 55, with a DB pension that is a little less then 50% of final salary.
The company also put 15% of salary into 401K which I also contributed 15% (Stair stepped up over the years as the kids grew).
Very generous medical plan where we pay about $230 a month for Medical, dental and vision.
DW has no pension but left with a decent 6 figure 401k.
All in all can't complain with a DB plan and 7 figures in 401K's.
__________________
jfn111 is offline   Reply With Quote
Old 02-16-2014, 09:46 PM   #150
Recycles dryer sheets
 
Join Date: Jul 2010
Location: Torrance
Posts: 112
Quote:
Originally Posted by twolfy View Post
Bob, are they hiring engineers at your old company? I need to steer my son that direction if so. Thats a nice retirement plan if they still offer it.
Tom
Unfortunately no, they phased out the voluntary retirement plan in 1992. I bought in in 1981 because my father said it was the smart thing to do. My 1992 line manager was my hero because he forced all the dumb young engineers to opt in before they closed it in '92.

I still think it's a great company for engineers, although you pretty much are resigned to locate to Texas now. Starts with an R and ends with an N. Though when I started it was H and S respectively.
__________________
bob boag is offline   Reply With Quote
Old 02-16-2014, 10:23 PM   #151
Recycles dryer sheets
 
Join Date: Oct 2013
Posts: 62
I have a state pension that pays 80% of my last three years salary(actually five years service as I had not had a raise in 5 years) with a 3% cola. I had to work three long---long years extra and buy 2 years service from another system to reach 35 years service so that I could make that 80%. Actually I see more money than when I was working. Reduced taxes, no retirement deductions, no union dues, gas, clothes, lunches, etc.

We took the 100% survival rate. When I retired, it puzzled me that so many said they were not taking the 100% survival rate. It costs me about $300 a month but already in two years of retirement, I almost have that back and next year, I will have it all back. Actually, I had no choice in the matter as my husband would not agree to anything else. I was more than fine with that because he was self employed and his SS is not that much. He worked so hard and deserves to have a worry free retirement.,

Also have two other retirement accounts.
__________________
Co2012 is offline   Reply With Quote
Old 02-17-2014, 12:16 AM   #152
Recycles dryer sheets
check6's Avatar
 
Join Date: Jan 2009
Posts: 383
Another lucky one here. Non COLA 60% of FAE but reduced to 50% due to pension freeze for all employees. Last in my industry to receive a DBP.
__________________
check6 is offline   Reply With Quote
Old 02-17-2014, 07:48 PM   #153
Recycles dryer sheets
cranberryjoe's Avatar
 
Join Date: May 2013
Location: Western US
Posts: 115
My megacorp froze its pension about 10 years ago. When I FIREed at 55 last year I had the option of taking the monthly annuity non-COLA with no benefit to waiting, or a lump sum that would increase if I waited. Given recent financial difficulties with the company, I chose to take the lump sum immediately into an IRA. I don't need the pension money right away so it can grow without fear of a PBGC takeover/reduction in benefits.
__________________
Grow older, not up
cranberryjoe is offline   Reply With Quote
Old 02-17-2014, 07:54 PM   #154
Recycles dryer sheets
Derslickmeister's Avatar
 
Join Date: Feb 2014
Posts: 249
No pension for me. Just a 401k with 6% match. My first employer got out of the pension business back in the early nineties, my current employer never offered one. My wife has a pension though, and a pretty good one at that
__________________
Derslickmeister is offline   Reply With Quote
Old 02-17-2014, 08:00 PM   #155
Recycles dryer sheets
Derslickmeister's Avatar
 
Join Date: Feb 2014
Posts: 249
Quote:
Originally Posted by bob boag View Post
Unfortunately no, they phased out the voluntary retirement plan in 1992. I bought in in 1981 because my father said it was the smart thing to do. My 1992 line manager was my hero because he forced all the dumb young engineers to opt in before they closed it in '92.

I still think it's a great company for engineers, although you pretty much are resigned to locate to Texas now. Starts with an R and ends with an N. Though when I started it was H and S respectively.
Wow, I worked for that company in Texas in the late 90s after they bought my previous employer. They shut us down and moved my facility to AZ, sound familiar?
__________________
Derslickmeister is offline   Reply With Quote
Old 02-17-2014, 08:22 PM   #156
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 1,672
My pension is about 15% of my final salary and there is no COLA. I only worked for them for 16 years, so I'm happy to have it.
__________________
Dash man is offline   Reply With Quote
Pensions - Got one?
Old 02-18-2014, 05:30 AM   #157
Recycles dryer sheets
 
Join Date: Jan 2014
Posts: 320
Pensions - Got one?

In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?
__________________
PERSonalTime is offline   Reply With Quote
Pensions - Got one?
Old 02-18-2014, 05:47 AM   #158
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 1,672
Pensions - Got one?

Quote:
Originally Posted by PERSonalTime View Post
In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?

In my case my wife is still working for another year, so we're on her plan. Once she leaves we'll go on Cobra for 18 months, then we'll have a choice of going on my former employer's retiree health plan, which today would cost us $1,500/month or finding our own plan. We looked on eInsurance.com and the options ranged from $900-$1,600 per month with high deductibles and out of pocket expenses for all of them. We have 7 1/2 years until Medicare kicks in.
__________________
Dash man is offline   Reply With Quote
Old 02-18-2014, 06:20 AM   #159
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
In my case, I will get COBRA until I reach 50, at which stage I will have retiree benefits including a high deductible healthcare plan, which cost will be very reasonable.
Quote:
Originally Posted by PERSonalTime View Post
In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 02-18-2014, 06:40 AM   #160
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,579
The pension came with BCBS health insurance which includes prescriptions. I usually pay $5 for those. While working I paid 20% of premiums and at retirement I could pick none, continue paying 20% for one year after retirement for every year of service after which coverage would end, or pay 30% of premiums to continue coverage for life for me and DW. That one was a no-brainer. I pay 30% of the premiums. This becomes secondary to Medicare at age 65 for both of us.

A possible "gotcha" on this is that while they maintain that the policy is to continue doing that they reserve the option to discontinue it. If that happens there will be yet another court battle since it appears to be covered under the union contract. In the past the employer has not done well in court battles. The last time the judge told them he didn't want to see them again and if he did it wouldn't be pretty. Still, it would add a stress level no one needs.
__________________

__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Medicare Care ID Number--Got a New One nwsteve Health and Early Retirement 3 09-10-2013 02:51 PM
Got a bill, one year later easysurfer Health and Early Retirement 0 04-05-2012 10:13 PM
Solatube?? Anybody here got one? VaCollector Other topics 9 06-23-2010 09:45 AM
Got small kids? Got small grandkids? cute fuzzy bunny Other topics 5 09-10-2008 10:52 PM

 

 
All times are GMT -6. The time now is 12:59 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.