Poll: Maximum Percentage of Salary

[kyounge1956]

I'm fed up it with the bashing of public employees that recurs periodically on this list—this thread is a recent example. An example of public employee pension is cited from some news story or other, then generalized to put all government employees in a bad light. There is never any data presented to show that the individual described is typical of public employees, and frankly, I don't think they are. This is the first of a series of polls to get a cross section of the public employees here at E-R.

Please don't vote in this poll unless you are currently working, or have worked in the past, for local, state or federal government (including military).

The question for the first poll is: What is the maximum percentage of base salary paid as a pension benefit by the pension system you are or were a member of? Add an explanatory comment if you like. (We'll look at what's included in "base salary" later on.)

For example, I work for the City of Seattle. According to the employee handbook, SCERS (the Seattle City Employees' Retirement System) pays up to 60% of the average of the highest 24 months. I've heard that employees with well above 30 years of service can receive more than 60%, I think if the actuarial value of their accumulated contributions and interest is greater than the pension amount determined by age and years of service. I haven't been able to find any published information on this higher benefit amount, and one employee has showed me a letter from SCERS which if taken at face value, indicates that after this December 31st, those higher benefits will no longer be available. So I'm putting 60% as the maximum for my system.

 

[chinaco]

Your poll has a flawed in it... reason: Many do not have pensions... there should be a options for Defined Contribution Plan and NONE (on my own).

Plus DB Pensions are not portable and the majority of the workforce today can't take it with them. DB plans are setup to give a % of the highest (average) salary times some % time some number of years. If people lose their jobs or move on for whatever reason... and that occurs when they are young, the pension will pay the light bill.

How many people now days work 40 years with a company? Not many... and often it is not their choice (mergers, downsize, out of business, move to other country, etc.).


The fact is most public companies do not have DB pension plans anymore or medical plans for retirement. If they have anything it is a Defined Contribution plan where the employee shoulders the risk and responsibility for growing their investments.


The dissatisfaction with public employees is not about the employee, it is about the local, state and federal govt bureaus... taxpayers are fed up supporting bloated and wasteful govt. The govt has not been good stewards of taxpayer resources.


BTW... I think everyone believes there is a need to certain govt programs and employees to operate them... it is the bloat and waste they are frustrated with. Regarding pensions.. whether the pension is too generous or there are too many govt employees... Taxpayers (most non govt employees) are tired of paying for it and it is a sore spot when the average taxpayer does not have the equivalent benefit. And most of us do not benefit from many of those programs!


I suspect we will see the number of govt employees shrink. For pensions, the employee may have to begin making part of the contribution (like SS).. the employee contributes and the employer (taxpayer) contributes.

 

[Dawg52]

Pension?

 

[kaudrey]

I work for the federal gov't (FERS). We get 1% x years in service x average of high-three salary. If you are a long time gov't employee, you'd get about 30% of your high-3 salary as pension. There are lots of variations on this, of course, depending on years of service and age.

 

[Emeritus]

I work for the federal gov't (FERS). We get 1% x years in service x average of high-three salary. If you are a long time gov't employee, you'd get about 30% of your high-3 salary as pension. There are lots of variations on this, of course, depending on years of service and age.

DW is a 27 year Fed under Fers. She is a Physician of international reputation in her field. . She gets the 1% times years plus 5% into the TSP. Based only on the pension and the return on the government portion of her TSP, not her own savings in the TSP, at age 60 She will get about 37% of her final 3 years salary, which is already well below her peers, even if you look only at salaried MDs.

She paid the Max social security for many years , as did I. We will get no spousal benefit, since we each paid in.

I once saw a proctoscope with an electrical short in it that could shock the patient. I suggested keeping it for those who think Federal physicians are overpaid.

For myself I was a state employee in the old DB system. 30 years full time service. Pension is 58% of final salary, but we also made 7% of salary contributions. My state salary never reached what they paid summer associates from my law school.

Neither of us ever had overtime or belonged to or benefited from a union.
Our peers in law and medical school warned us that we would be the only Physician/lawyer couple who would never make any real money. But we chose public service, and yes, it is service.

The vitriol from those who were unwilling to make the personal and career sacrifices to go into public service, or who bought into the lies and deceptions of private sector employers, is simply indicative of how nasty some aspects of our society have become.

 

[rothlev]

My husband is CSRS with a formula that allows most years to count for 2%, so you can go pretty high in total percentage if you stay long enough. I think 30 years equls 56%. No social security thou. I am a retired teacher , our multiplier is 1.6%, but we get social security. 30 years equals 48%. If you stay longer you get more, or you can go into a DROP program and bank your pension while you work.

 

[Lakedog]

For Feds under CSRS, you could get as much as 80% but you had to work just under 42 years to reach that amount. I was under CSRS for 18 years then switched to FERS for the remainder of my 28 years of federal service. My pension came to around 65% of the high three average salary (all overtime is excluded from the calculation). I was classified as a wildland firefighter so the pension was computed a little more generously. Since I switched to FERS for the last ten years, I will qualify for social security but the amount will be minimal as it is subject to the windfall elimination penalty and I only had ten years paying into social security.

 

[dex]

Your poll has a flawed in it... reason: Many do not have pensions... there should be a options for Defined Contribution Plan and NONE (on my own).

Plus DB Pensions are not portable and the majority of the workforce today can't take it with them. DB plans are setup to give a % of the highest (average) salary times some % time some number of years. If people lose their jobs or move on for whatever reason... and that occurs when they are young, the pension will pay the light bill.

How many people now days work 40 years with a company? Not many... and often it is not their choice (mergers, downsize, out of business, move to other country, etc.).


The fact is most public companies do not have DB pension plans anymore or medical plans for retirement. If they have anything it is a Defined Contribution plan where the employee shoulders the risk and responsibility for growing their investments.


The dissatisfaction with public employees is not about the employee, it is about the local, state and federal govt bureaus... taxpayers are fed up supporting bloated and wasteful govt. The govt has not been good stewards of taxpayer resources.


BTW... I think everyone believes there is a need to certain govt programs and employees to operate them... it is the bloat and waste they are frustrated with. Regarding pensions.. whether the pension is too generous or there are too many govt employees... Taxpayers (most non govt employees) are tired of paying for it and it is a sore spot when the average taxpayer does not have the equivalent benefit. And most of us do not benefit from many of those programs!


I suspect we will see the number of govt employees shrink. For pensions, the employee may have to begin making part of the contribution (like SS).. the employee contributes and the employer (taxpayer) contributes.

This above sums up all the issues. Plus there should have been a Gov't poll for comparison. Plus below; written in 2006. I did a quick search and took the first link - so do your own research.


Covet thy neighbor

Because those that do are mostly very large employers, about 21 percent of all private-sector employees are covered by a defined-benefit pension. On the other hand, 53 percent of private-sector workers had access to defined-contribution retirement plans, and 42 percent participated. On the public side, about 90 percent of 16 million local and state workers are covered by a defined-benefit pension, levels that have changed little of late. For all the media hype about private firms terminating pension plans and adopting 401(k)s, only a few public pensions have taken that step—most notably in Michigan.


++++++

Local and state pension plans also incur more retirement expenses due to annual, upward adjustments in pension annuities. For example, about two-thirds of public pensions offer automatic cost-of-living adjustments (COLAs), according to Keith Brainard of the National Association of State Retirement Administrators. Such adjustments can tack on as much as 3 percent every year to public pensions. Most also add adjustments based on investment returns, which typically padded annuities by anywhere from 2 percent to 8 percent in many plans during the roaring 1990s.
Such benefits are rare in the private sector, said Dimitry Mindlin, a managing director with Wilshire Associates, a global investment consulting firm. "I don't believe a single client of ours has [a COLA]."
It appears that most local and state employees can also depend on at least a small health care subsidy in retirement (see related article on GASB 45). That's becoming rare in the private sector. According to a 2005 report by the Kaiser Family Foundation, the share of large private employers (those with 200 or more employees) offering retiree health coverage has dropped from 66 percent in 1988 to 33 percent last year.

 

[ziggy29]

The vitriol from those who were unwilling to make the personal and career sacrifices to go into public service

Spare me the sanctimonious holier-than-thou stuff.

Yeah, it's our fault for not knowing the rules would change on us midway through the game. I HAD a pension and retiree health insurance from my first employer out of college. They took it away a decade later, and I can't get a "do over" to relive my 20s in a government job to build up a generous pension. Sorry, no sale. That dog ain't hunting.

Sure, if in 1988 I knew how the "rules" would change heading into 2000 and beyond, I WOULD have likely chosen public sector employment. But guess what? I'm not clairvoyant, and in 1988 at the ripe old age of 22 I didn't have that knowledge, that foresight, that wisdom. I thought I was getting the same deal my dad got. As a result I lost a lot of years that could have generated a nice pension and couldn't get them back. My fault for being an idiot. So sorry, sir. I stand chagrined for being a mercenary private sector idiot in your eyes who couldn't see the obvious fact that he'd get screwed 10 years later, and that if he only chose a government job it wouldn't have happened. I'm such a pathetic failure!

Your characterization of those who did NOT choose "public service" as mercenaries unwilling to "sacrifice", somehow less noble than those who work for government, is also rather offensive and prejudicial.

 

[kyounge1956]

Your poll has a flawed in it... reason: Many do not have pensions... there should be a options for Defined Contribution Plan and NONE (on my own). (snip)

I think you have missed the point of the poll, which is to show that the pension stories which are posted here are not typical examples. Most public employees do not get six-figure pensions, we don't get above 100% of our base salary as a retirement benefit. We often don't get full COLA, and we don't always get full payment of health insurance after retirement, yet again and again, examples of people who do get these extremely generous benefits are presented as if they are the universal experience of public employees, and then this supposition is taken as evidence that public employee benefits are too high. I think that whole line of argument is nothing but a straw man and I'm sick of being beaten over the head with it!

 

[ziggy29]

We often don't get full COLA, and we don't always get full payment of health insurance after retirement, yet again and again, examples of people who do get these extremely generous benefits are presented as if they are the universal experience of public employees, and then this supposition is taken as evidence that public employee benefits are too high. I think that whole line of argument is nothing but a straw man and I'm sick of being beaten over the head with it!

I think it's unfortunate that a few extreme examples are touted as if they were the norm. I agree with you there.

I think both "sides" (as it were) need to take a breath and a step back and try to put themselves in the shoes of the other.

There are enough people trying to "roll back" pensions for those who are already decades into the system and defensiveness is understandable. To do that would be immoral, IMO, and just because I got screwed doesn't mean I want others to suffer a similar screwing.

On the other hand, some of us in the private sector (including yours truly) had their pension and retiree medical benefits taken away -- years we can't get back for generating a pension -- saw our 401Ks go to halfway to zero with no thought of "protecting our retirement" even as many state and local governments talk about raising taxes and cutting services to protect the retirement of others. When government sends the message that it is ready to protect the retirement of some people and raising taxes on the rest of us to pay for it (even as they extend NO lifeline to us), the seeds of resentment are unfortunately planted.

Pretend your government employer froze your pension, took away your retiree health insurance AND raised your taxes to keep another department's retirement plan going for other people. How would you feel? I don't know any other way to try to let "your side" walk in our shoes. I don't want to take anyone down -- I just want to show why the anger and resentment are there.

 

[Emeritus]

Spare me the sanctimonious holier-than-thou stuff.

Yeah, it's our fault for not knowing the rules would change on us midway through the game. I HAD a pension and retiree health insurance from my first employer out of college. They took it away a decade later, and I can't get a "do over" to relive my 20s in a government job to build up a generous pension. Sorry, no sale. That dog ain't hunting.

Sure, if in 1988 I knew how the "rules" would change heading into 2000 and beyond, I WOULD have likely chosen public sector employment. But guess what? I'm not clairvoyant, and in 1988 at the ripe old age of 22 I didn't have that knowledge, that foresight, that wisdom. I thought I was getting the same deal my dad got. As a result I lost a lot of years that could have generated a nice pension and couldn't get them back. My fault for being an idiot. So sorry, sir. I stand chagrined for being a mercenary private sector idiot in your eyes who couldn't see the obvious fact that he'd get screwed 10 years later, and that if he only chose a government job it wouldn't have happened. I'm such a pathetic failure!

Your characterization of those who did NOT choose "public service" as mercenaries unwilling to "sacrifice", somehow less noble than those who work for government, is also rather offensive and prejudicial.

Please put in the whole quote


"The vitriol from those who were unwilling to make the personal and career sacrifices to go into public service, or who bought into the lies and deceptions of private sector employers, is simply indicative of how nasty some aspects of our society have become."

I fully agree that Corporations "conspired" with tame bought politicians to screw workers out of pensions. I told people in 1980 that a vote for Reagan was a vote against pensions. By 1988 the Republican led (and Democratically enabled) destruction of private pensions was well underway. The key was the underfunding of the PBGC.

Most American workers are day laborers. They have no rights. You say I thought I was getting the same deal my dad got. Any lawyer would have told you had no rights in 1988.

I am very very sorry you were suckered by the lies and deceptions. You are not alone.

 

[Emeritus]

Pretend your government employer froze your pension, took away your retiree health insurance AND raised your taxes to keep another department's retirement plan going for other people. How would you feel? I don't know any other way to try to let "your side" walk in our shoes. I don't want to take anyone down -- I just want to show why the anger and resentment are there.

In 1980 and again in 1984 the State government did almost exactly what you describe. We had to pay 40% higher contributions to keep the same pensions we had agreed to.

 

[ziggy29]

In 1980 and again in 1984 the State government did almost exactly what you describe. We had to pay 40% higher contributions to keep the same pensions we had agreed to.

That's not even close to the same situation as I described. It's no different than an increase in the Social Security tax rate, for example. It hits everyone equally and it's born of necessity. Shared sacrifice, taken equally by all.

If they singled out your department for slashing the pension while you still had to pay for the pensions of others -- or increased your mandated contributions to subsidize another department's plan with no benefit to your own retirement -- how would that make you feel?

 

[Rustic23]

You often hear that the Military retire at 50% of their pay. However, that is not really the case. They retire at 50% of their base pay at 20 years service. For most Air Force pilots that is about 35% of what they make. Flight pay, housing, subsistence, hazardous duty pay are just some of the things added to their pay. In Houston a Major with 20 years receives about $7,000 in base pay, but his housing allowance is almost $2,400 a month. Specialty pay can add another couple of thousand to his pay. It is one of the reasons the government splits a military pay raise between base pay and housing/subsistence. The don't have to pay retirement on the latter, and if the service member lives in base housing all they are doing is raising their rent.

 

[haha]

I was classified as a wildland firefighter so the pension was computed a little more generously.

Now that is a dangerous job! Congratulations on making it to retirement.

Ha

 

[haha]

If they singled out your department for slashing the pension while you still had to pay for the pensions of others -- or increased your mandated contributions to subsidize another department's plan with no benefit to your own retirement -- how would that make you feel?

And what sort of answer to this question do you expect from this poster? He would feel wonderful, as he knows that this cannot happen to him, so he is free to say anything.

Ha

 

[Texas Proud]

I know this has some heated discussion from both sides... and we can all show different examples of how this and that works...

You can blame Reagan all you want, but it would have happened no matter who was in Congress... the private sector can change the rules.. they can adjust to market forces... we get that...


What I would like to see is a change from the DB plans that are out there that people can use to game the system... from both sides... the employee who spikes to the politician who promises more down the road... it is a formula for disaster...

Now, if there were a cash balance acccount for every worker... they have a certain amount of money taken from their paycheck to put into this account... (or not.. that is up to discussion) and the gvmt entity puts money into this account at a known rate.. then this amount is 'theirs'... it grows every year... you can have it tied to the 10 year Treasury or whatever index you want... when the employee is ready to retire, they have a pile of cash... they can choose to annuitize it or take it as a lump sum... it is THEIR money...

What does this do? It moves the risk from the public sector to the employee... guess what, most of the rest of society has this risk... me manage it... (not all, but enough)... we do not have to worry about any underfunded plan... we do not have to worry about someone spiking the system. We do not have to worry about all the abuses that are in the current plans (and don't read that there are only abuses... there are some good things in these plans also)...


IF salaries have to go up today... then GREAT... we KNOW what a police officer of fire fighter or clerk at the drivers license office cost us... we either adjust our taxes to pay for what we want... OR adjust the number of people who do it and put up with the lines...

 

[Texas Proud]

The other argument that can be made... and to me also does not change my thinking a lot is 'we paid into the system and should not be cut'...

But with the spiking, and the ability to change to a higher paying job at the end of a career which also spikes the pension... some are going to be getting a lot more than what they put in even when adding in market returns...


I can say that I have been paying SS for many years... and that you can not cut my SS or extend the time when I can get it... but it will happen... (the age already and it might happen again)... this is because the country promissed more than it can deliver... it might be able to pay 90% or even 95%... so I get less than promissed... it happens all the time... it is life...


Just as an additional note.... people who worked for (IIRC) HP got an across the board 10% pay cut... other companies did the same thing... I don't think many of the gvmts out there adjusted salaries down... I could be wrong, but I did not hear that many stories... I did hear about some places that had layoffs...

 

[Texas Proud]

You often hear that the Military retire at 50% of their pay. However, that is not really the case. They retire at 50% of their base pay at 20 years service. For most Air Force pilots that is about 35% of what they make. Flight pay, housing, subsistence, hazardous duty pay are just some of the things added to their pay. In Houston a Major with 20 years receives about $7,000 in base pay, but his housing allowance is almost $2,400 a month. Specialty pay can add another couple of thousand to his pay. It is one of the reasons the government splits a military pay raise between base pay and housing/subsistence. The don't have to pay retirement on the latter, and if the service member lives in base housing all they are doing is raising their rent.

Yep, news to me... I learned something from the posts...

AND.. learned something else... you can get a LOT of house for $2,400 per month in Houston... would this be someone who has to rent because they might have to move?

 

[Bestwifeever]

Kyounge, I believe the uproar (and rightly so imho) is the big loophole (being closed now) that lets school districts/municipalities/whatever manipulate the last few years of salaries to spike the pension. The money budgeted for the pension plan is based on the normal salary, not the spiked salary, and cannot cover them, so the spiking ends up bleeding the pension plan and we all know who will be on the hook to cover the shortage (Padded pensions costing Illinois taxpayers millions - chicagotribune.com)

I don't begrudge anyone, government employee or otherwise, the pension they worked for.

 

[Lakedog]

Now that is a dangerous job! Congratulations on making it to retirement.

Ha

Thanks for the comment, Ha. There were many exciting times with a few close calls, including one which put me out of commission for almost a year, but the career was a good choice for me. I do enjoy retirement more though!

 

[Emeritus]

And what sort of answer to this question do you expect from this poster? He would feel wonderful, as he knows that this cannot happen to him, so he is free to say anything.

Ha

Didn't happen to me, but we had two groups who were screwed in one of the statutory changes. They were putting a bill through the legislature to fix it, and at the last minute they cut a deal and only fixed it for the unionized teachers and screwed the nonunionized professors. Of course they had told us that we didn't need unions since they would never ever ever do that to us.

 

[Emeritus]

That's not even close to the same situation as I described. It's no different than an increase in the Social Security tax rate, for example. It hits everyone equally and it's born of necessity. Shared sacrifice, taken equally by all.

If they singled out your department for slashing the pension while you still had to pay for the pensions of others -- or increased your mandated contributions to subsidize another department's plan with no benefit to your own retirement -- how would that make you feel?

1) It wasn't shared equally.. They screwed employees to benefit taxpayers.
2) They certainly did that to other people , although not to me. See the other response

The bottom line is that you get exactly what you are legally entitled to and not one cent more. The problem for most private sector employees is that they do not realize that they are day laborers with no rights at all

 

[ziggy29]

Didn't happen to me, but we had two groups who were screwed in one of the statutory changes. They were putting a bill through the legislature to fix it, and at the last minute they cut a deal and only fixed it for the unionized teachers and screwed the nonunionized professors. Of course they had told us that we didn't need unions since they would never ever ever do that to us.

Egad. Public versus private sector benefit deals are contentious enough. Let's not throw the U-word into it as well....