Did a pension ever a sway you to a specific job?

[Big_Hitter]

Oh carp - missed the fact that the OP is 26.


Look for a generous DC plan.

 

[48Fire]

Just out of curiosity, did a pension ever help determine what job you would take?

At age 25, I took a new job, based completely on job stability for next 2 - 5 years. After about 15 years, I started to think that achieving a pension was possible, but still a long shot. After 27 years, I made it

 

[Greencheese]

Thanks for the replies everyone, I appreciate the insight into this! Obviously the pension is only worthwhile if one can make the 20-30 year gauntlet which is why I'm contemplating it, since I'm still young enough to make that gauntlet while still making the goal of ER. Certainly a lot to think about and probably something I can't decide on until I have some concrete numbers in front of me.

It certainly seems like this community is torn on pensions for younger individuals which is a bit of a surprise to me! I'll see what comes down the pipeline and weigh in from there.

 

[Mulligan]

I don't think it is so much torn, Greencheese, as it is apprehensive for you that it will be there for you at the end. When many here were your age 30 years ago, the idea of having your promised pension deleted was very rare. Many of these pension freezes late in a career can be brutal. Most of the accrual benefits of a pension can occur late in the career. Freezing a pension at year 20 of a 25 year full pension can be huge haircut. Not just the simple math of thinking well I will get 4/5 of the pension anyways.
But, I think you can see through other threads the people who actually have them are very happy they do (including me). Its just can you trust it to be there when you need it most as it will be completely out of your hands.


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[HawkeyeNFO]

As a military officer, pension was never a recruiting tool. But it is a powerful retention tool.

 

[purplesky]

Thanks for the replies everyone, I appreciate the insight into this! Obviously the pension is only worthwhile if one can make the 20-30 year gauntlet which is why I'm contemplating it, since I'm still young enough to make that gauntlet while still making the goal of ER. Certainly a lot to think about and probably something I can't decide on until I have some concrete numbers in front of me.

It certainly seems like this community is torn on pensions for younger individuals which is a bit of a surprise to me! I'll see what comes down the pipeline and weigh in from there.

So please no offense. But do you live in a cave? or maybe you just don't know?

There is a nationwide movement funded by Billionaires to destroy pensions both public and private. A carefully designed attack on teachers,Pilots,cops,truck drivers,etc.

So as a millennial I wouldn't count on any pension in 30 years.

Its possible we might see a reverse trend if the middle class fights back but the millennial generation seems happier just staring at their cell phones.

Just 20 years ago public school teachers were considered underpaid heroes helping our children.

Now those same underpaid public school teachers are considered overpaid public servants ripping off the taxpayers with their pension.

Yes this did happen in our society and economy in a 20 year span and its a joke.

 

[MichaelB]

So please no offense. But do you live in a cave? or maybe you just don't know?

Time to brush up on your Dale Carnegie?


I though Mulligan summed it up nicely.

I don't think it is so much torn, Greencheese, as it is apprehensive for you that it will be there for you at the end. When many here were your age 30 years ago, the idea of having your promised pension deleted was very rare. Many of these pension freezes late in a career can be brutal. Most of the accrual benefits of a pension can occur late in the career. Freezing a pension at year 20 of a 25 year full pension can be huge haircut. Not just the simple math of thinking well I will get 4/5 of the pension anyways.
But, I think you can see through other threads the people who actually have them are very happy they do (including me). Its just can you trust it to be there when you need it most as it will be completely out of your hands.

 

[MooreBonds]

So please no offense. But do you live in a cave? or maybe you just don't know?

There is a nationwide movement funded by Billionaires to destroy pensions both public and private. A carefully designed attack on teachers,Pilots,cops,truck drivers,etc.

It depends on the employer.

Many non-profit healthcare institutions, some utilities, many unions, still some private companies, and many local/state gov't still offer pension plans to employees. If the OP is in one of these, then there's a chance that they will still be "fair" to employees, rather than try to finagle the rules and structure to only benefit the C-suite. However, I'd try to first find out what the funding level currently is - and be aware that there are different ways to report funding levels.

There were recent laws passed that let the pension fund use historical returns to determine funding levels in lieu of current interest rates. With current interest rates being non-existent, the funding levels are much worse off. With historical rates, the funding levels are much higher. I would probably opt to split the difference between the two to get a gauge on what the health of the pension is.

If it's currently fairly well funded (say, 88% or higher using the "split the difference method"), then I would bet that it will likely still be adequately managed and funded in the next 10-20 years, and still be a part of their retirement plan. Which, IMO, would make it worthwhile to take a chance.

From the few pensions I"ve seen, they often have a 5 year vesting schedule. if you make it at least 5 years, you vest 100% in it. If you leave after 5 years, and/or if the cash balance is small enough, you might be able to roll it over into an IRA after you leave, depending on the rules. So it could still be worth it to look into.

 

[NoiseBoy]

I am vested in two different pension plans; one public and the other private. The contributions to the public plan were taken from my paycheck and therefore that plan has a lump sum payout option and a death benefit. The private plan is 100% employer funded. It does not have a lump sum or roll over option, and no death benefit. You can elect to take a reduced payout to have a spousal benefit. Both plans vested after 5 years of employment.

Since I started at megacorp, they've altered the pension plan participation rules twice, and with the second change they harshly kicked out anyone who wasn't 40 years old and set a freeze date for everyone else. It just so happens that these changes are in line with my own ER goals, so besides providing me with a little extra motivation, I made out okay. But my 39 year old co-worker, who has more years of service with the company than me, was not nearly so fortunate. From what I can tell, the lump sum that she'll receive for her "vested" pension isn't close to what it's value would've been had she been able to stay in the plan.

I agree that Mulligan has accurately described the pros and cons of defined benefit pensions. I feel fortunate to have mine, but I'd be hard pressed to believe that a current, private DB plan will go 20 - 30 years without being reduced or eliminated.

 

[Big_Hitter]

It depends on the employer.

Many non-profit healthcare institutions, some utilities, many unions, still some private companies, and many local/state gov't still offer pension plans to employees.

very true

 

[Mulligan]

Every year at my state capital there are 4-5 bills introduced trying to weaken our teachers pension system. Fortunately teachers retire fairly young and are mobile enough physically to drive in from all corners of the state to swarm and harass legislatures to beat the proposals down and get them killed. Retired teachers have plenty of time on their hands and are willing to use it to protect their pensions. Unfortunately for private pension workers they do not have that "added protection".


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[purplesky]

It depends on the employer.

Many non-profit healthcare institutions, some utilities, many unions, still some private companies, and many local/state gov't still offer pension plans to employees. If the OP is in one of these, then there's a chance that they will still be "fair" to employees, rather than try to finagle the rules and structure to only benefit the C-suite. However, I'd try to first find out what the funding level currently is - and be aware that there are different ways to report funding levels.

There were recent laws passed that let the pension fund use historical returns to determine funding levels in lieu of current interest rates. With current interest rates being non-existent, the funding levels are much worse off. With historical rates, the funding levels are much higher. I would probably opt to split the difference between the two to get a gauge on what the health of the pension is.

If it's currently fairly well funded (say, 88% or higher using the "split the difference method"), then I would bet that it will likely still be adequately managed and funded in the next 10-20 years, and still be a part of their retirement plan. Which, IMO, would make it worthwhile to take a chance.

From the few pensions I"ve seen, they often have a 5 year vesting schedule. if you make it at least 5 years, you vest 100% in it. If you leave after 5 years, and/or if the cash balance is small enough, you might be able to roll it over into an IRA after you leave, depending on the rules. So it could still be worth it to look into.

I am not talking about the math of pensions. I agree they can and do work.

The OP is young and might not realize how much influence and money is being thrown around behind the curtain to eliminate pensions both public and
private.

Even military pensions are a target now.

There isn't much value placed on workers these days or really in the last couple decades. Its all about the stock price and pensions do not mix well with shareholder value.

There is constant pressure on pensions and most older workers with a pension know the feeling that the rug can be pulled or the pension reduced at any moment.

 

[LinCella]

I was always going to have a career as a librarian and I ended up with a public service job that I loved for 28 years. I was so green about my retirement that it wasn't until I was there 5 years that I found out that we had a pension and paid medical upon retirement. I could not believe they were going to pay me when I retired. The pension is still a benefit at the City I worked for but the retiree medical is pretty much gone. I was one of the last lucky few.

It's not a bad thing to stay at a job you love and retire from it. But, I admit, having a pension and medical certainly prevented me from going elsewhere. In my case it would have just been another City and I was comfortable at mine so I stayed. I had no ambitions other than to retire as a manager (higher salary and pension) which I did.

And I was freaking fantastic librarian!

 

[LinCella]

But I agree - pensions are at risk in the future...Even while in my state, with CalPERS, the average pension is about $1250 a month. You can't live on that and many of us in public service never paid into Social Security, so no joy there. But the rich folks and other pissed off people that don't get a pension have targeted those who make the bigger pensions - the minority of the CalPERS pensioners. I missed the boat on the dotcom party in my area and now those folks are begrudging me my pension.

 

[purplesky]

very true

Its possible pensions could make a comeback. But considering wages have now been flat for 30 years it doesn't look good.

Maybe we will see a movement in the corporate world hopefully sooner than later to reward workers instead of constantly taking away to boost shareholder value.

 

[purplesky]

I was always going to have a career as a librarian and I ended up with a public service job that I loved for 28 years. I was so green about my retirement that it wasn't until I was there 5 years that I found out that we had a pension and paid medical upon retirement. I could not believe they were going to pay me when I retired. The pension is still a benefit at the City I worked for but the retiree medical is pretty much gone. I was one of the last lucky few.

It's not a bad thing to stay at a job you love and retire from it. But, I admit, having a pension and medical certainly prevented me from going elsewhere. In my case it would have just been another City and I was comfortable at mine so I stayed. I had no ambitions other than to retire as a manager (higher salary and pension) which I did.

And I was freaking fantastic librarian!

Thats awesome. And with that pension check you will help fuel the economy.

 

[Mulligan]

Thats awesome. And with that pension check you will help fuel the economy.

That is the first thing my pension fund writes about in the quarterly newsletter is how the many millions of dollars from the pension fund is spent in state helping fuel the local economy. I do my best to spend mine and help the economy....But if I was a taxpayer without a pension or had mine taken away I would be thinking... "There is an easier way to get the money spent out in the local economy. Let me keep it and spend it myself."


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[MikeWillRetire]

I spent 11 years in the private sector, and another 20 years in government so far. I'm hoping to retire in less than 5 years, and the government pension should cover 1/3 of my retirement expenses. The pension was a major reason I stayed in government this long.

 

[purplesky]

That is the first thing my pension fund writes about in the quarterly newsletter is how the many millions of dollars from the pension fund is spent in state helping fuel the local economy. I do my best to spend mine and help the economy....But if I was a taxpayer without a pension or had mine taken away I would be thinking... "There is an easier way to get the money spent out in the local economy. Let me keep it and spend it myself."


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As a taxpayer I have no problem supporting the cops,teachers,firefighters,librarians,etc, because they provide a needed service in my community and they are my hard working neighbors.

They help create jobs and sustain the economy with those pension checks.

Some people are just jealous of pensions for some reason. I am happy for those with a pension.

As I am typing this a firetruck with its sirens on just drove by my house.

 

[Mulligan]

As a taxpayer I have no problem supporting the cops,teachers,firefighters,librarians,etc, because they provide a needed service in my community and they are my hard working neighbors.



They help create jobs and sustain the economy with those pension checks.



Some people are just jealous of pensions for some reason. I am happy for those with a pension.



As I am typing this a firetruck with its sirens on just drove by my house.

I was just having a little fun poking at my pension funds newsletter. It only goes to the pensioners. It just amuses me on every front page issue they are "preaching to the converted" already.


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[CloudNine]

I ended up staying in a job for Pension purposes. PERSI is offered by my state, and it is pretty reliably solvent.

Had to last 5 years to get vested, which overall is 'meh' from an investment standpoint.

 

[ulrichw]

[...] But I agree - pensions are at risk in the future...Even while in my state, with CalPERS, the average pension is about $1250 a month. [...]

Per CalPERS, here are the numbers (http://www.calpers.ca.gov/eip-docs/about/facts/facts-at-a-glance.pdf) for FY 2013-2014 retirees:

As of June 30, 2014:
Average monthly service retirement allowance, all service retirees $2,784
Average years of service, all service retirees 19.9
Average monthly service retirement allowance for state misc. members (tier 1) $2,737
Average years of service state misc.retiree 22.2
Average monthly service retirement allowance for school misc. members $1,615
Average years of service school misc.retirees 17.4
Average monthly service retirement allowance for public agency misc. members $3,006
Average years of service public agency misc. retirees 19.8

I suspect that the school member number is skewed down both due to the lower years of service and the number of part-time pension-eligible workers (e.g., substitute teachers).

The fact that many public sector employees can (and do) retire early is at least partially indicative of the value of those plans.

 

[Rick_Head]

Surely you jest. My first j*b was all about did I like it? My second was "it pays so much, can I reject it?". Pension? You won't be there to collect.

 

[zesty]

My last job had a pension and I stuck around for 5 years to get vested into $5k per year when I retire.

My current job also has a pension (a nicer one) and my plan right now is to stick with that place at least until I get vested, and possibly until ER.

 

[LinCella]

I think the All-service average is skewed by the safety average. Still $2700 in California is not much after taxes.