Rhode Island Public Pension System Reform
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Chuckanut
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This is exactly what I mean. I don't know of one person in my field does NOT pay into SS. Not One!
People read this stuff and believe it. The same goes with a few people in who get big, generous pensions at an early age. The vast majority of us do not. If we do retire early they knock down the pension big time to account for that. And, there is no paid or even partially paid medical, at least not for me and mine. COLA? A partial limited, COLA only. I guess I got on the wrong gravy train!
Granted there are people in the private sector who get less than me and mine. But, there are others who get similar, and many who get much more in their overall compensation package.
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Huston55
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First, full disclosure...then, some thoughts.
Disclosure: DW and I will both get SS, I will get a military (retired reservist) pension and Tricare at 60. All other retirement income must come from our savings (401k, IRAs, after tax).
Some Thoughts:
1. This is a thought provoking thread, with lots of folks on 'both sides' of the public employee benefits argument; I like reading the opposing views.
2. IMO, the system is almost completely out of balance. Public retirement benefits are not sustainable, and must (they will, the $$$ will force it) adjusted toward the marketplace. The private market did this 25 yrs ago and the public sector will have to follow. For one data point, read the CATO Institute study on the imbalance of private pay/benefits vs public ones. Yes, the CATO Inst is conservative but, really, how can one say the system is not out of whack when, by any measure, a federal worker's package is double that of a private worker. I'm actually fairly liberal ( at least according to my Dad), and this data (even if it's off by 50%) scares the crap out of me; this is the road to becoming Greece.
3. From reading the link in an early post regarding the WA State employees "rights", it's clear to me that some confuse 'benefits' with 'rights'. We have the right to life, liberty and the pursuit of happiness, the right to free speech; not the right to a sweet retirement package.
4. We need to start by reducing the pay/benefits packages of the politicians, which is probably the subject of another thread. But, I've met too many 'average Joe' public retirees making outrageously generous pensions to believe that 'it's just the big guys.'
5. Self interest combined with poor governance has been a deadly combo in this arena, as illustrated by the multiple examples of pension spiking, game playing, and late/indecision on fixes.
6. Admittedly, I'm probably not completely objective regarding military retirement benefits but, I honestly do think it's different and IMHO should be treated differently.
Disclosure: DW and I will both get SS, I will get a military (retired reservist) pension and Tricare at 60. All other retirement income must come from our savings (401k, IRAs, after tax).
Some Thoughts:
1. This is a thought provoking thread, with lots of folks on 'both sides' of the public employee benefits argument; I like reading the opposing views.
2. IMO, the system is almost completely out of balance. Public retirement benefits are not sustainable, and must (they will, the $$$ will force it) adjusted toward the marketplace. The private market did this 25 yrs ago and the public sector will have to follow. For one data point, read the CATO Institute study on the imbalance of private pay/benefits vs public ones. Yes, the CATO Inst is conservative but, really, how can one say the system is not out of whack when, by any measure, a federal worker's package is double that of a private worker. I'm actually fairly liberal ( at least according to my Dad), and this data (even if it's off by 50%) scares the crap out of me; this is the road to becoming Greece.
3. From reading the link in an early post regarding the WA State employees "rights", it's clear to me that some confuse 'benefits' with 'rights'. We have the right to life, liberty and the pursuit of happiness, the right to free speech; not the right to a sweet retirement package.
4. We need to start by reducing the pay/benefits packages of the politicians, which is probably the subject of another thread. But, I've met too many 'average Joe' public retirees making outrageously generous pensions to believe that 'it's just the big guys.'
5. Self interest combined with poor governance has been a deadly combo in this arena, as illustrated by the multiple examples of pension spiking, game playing, and late/indecision on fixes.
6. Admittedly, I'm probably not completely objective regarding military retirement benefits but, I honestly do think it's different and IMHO should be treated differently.
To your point 6, what do you mean by military benefits should be treated differently?
ERD50
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Well, someone could put in 20 years in public w/o SS and 10 years in private w/SS. It happens. IIRC, it is measured in quarters, so summer jobs count into that by quarter. Someone starting at 21, with some summer jobs, could put in 30 years, retire at 51, put in less than 10 years after that, and make a 30 public, 10 private by age 61.
If a teacher works summers in a private job, would they earn a quarter credit for SS? That could be a lot of credits earned.
Yes, that was the adjustment I mentioned. I don't know all the details, or if it applies in all cases.
This is exactly what I mean. I don't know of one person in my field does NOT pay into SS. Not One!
People read this stuff and believe it. The same goes with a few people in who get big, generous pensions at an early age. The vast majority of us do not. If we do retire early they knock down the pension big time to account for that. And, there is no paid or even partially paid medical, at least not for me and mine. COLA? A partial limited, COLA only. I guess I got on the wrong gravy train!
The issue I have is that you seem to project what you think 'people believe' on others. I feel you are generally wrong in thinking that when most people hear about the big pensions/abuses in the news, that they believe that applies to the average public worker. I get the sense that you want to use that as a kind of 'shield' against any critique of public pensions. Kind of a 'red herring' approach.
And if your pension is less generous than the average public pension, that does nothing to change how we should view the average.
-ERD50
Huston55
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Rip-
I think military personnel make unique sacrifices and deserve to be treated accordingly. That said, I'm not opposed to 'adjustments' like have already been made (ie: when the retirement pension formula was adjusted a while back). But, I would oppose changes as fundamental as converting to DC pension or eliminating military retiree medical benefits.
I think military personnel make unique sacrifices and deserve to be treated accordingly. That said, I'm not opposed to 'adjustments' like have already been made (ie: when the retirement pension formula was adjusted a while back). But, I would oppose changes as fundamental as converting to DC pension or eliminating military retiree medical benefits.
OP
OP
Social security is accrued based on annual income, not quarters. In 2011 you receive 1 credit for each $1120 of eligible income. The maximum accrual is is 4 credits per year and 40 credits are required for normal eligibility. Quarterly credits were used prior to 1978.
Well said Soldier. And thank you for service. I'm a former Marine myself. Was just looking for clarification.
clifp
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Interesting I don't know that. So a teacher working a summer job is likely to earn 4 quarters. Or in my case I could get a temp job/consulting gig and increase my SS benefit without have a J*b for a whole year. I wonder what prompted the change.
OP
OP
Anyone working will earn the entire 4 credits when their eligible income reaches $4480, even if that is in the month of January. The quarterly system changed 34 years ago.
I'm not sure but "quarters" may have been unfair to people that worked less than 12 months per year due to profession. This would include teachers, construction workers in cold climates, etc.
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ziggy29
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I think some of the question about this is that when it comes to the military, "retiree" can be as young as age 38 if you enlisted right out of high school and "put in your 20." Unless someone is disabled or otherwise unable to hold down living-wage employment at age 38, it seems weird to me that someone can start collecting a pension and lifetime health insurance that young. To me it's not even a matter of "they shouldn't get a pension and retiree health insurance" -- but should it really start that young?
For sure, someone permanently disabled in combat or combat training should be provided disability and health care for life -- no qualms there whatsoever. But these days, given the unfortunate changes to our economy and job market elsewhere, can we afford the deal of a pension and lifetime health care at 38 for all military? I wish we could still afford to give all working-class labor the deal it enjoyed for 25-30 years after WW2, but sadly I don't know how we can keep making those promises to the next generation when it will be hard enough keeping those promises for those already serving or retired from serving.
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Huston55
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I understand your point about tough fiscal decisions. Some would agree with what you infer and, some of them are in Congress and are advocating for fundamental changes to the military retirement system; even Secy of Defense Panetta seems to have recently boarded that bandwagon. Personally, I don't agree with them. I understand the argument; I simply have a different view.
For the sake of accuracy regarding the age and compensation of military retirees, I've included some data below, which should dispel the myth of the 38yr old military who gets 50% of his/her pay for life.
Average age of military retirees:
- 45 yrs old and 24 yrs of service for officers
- 41 yrs old and 22 yrs of service for enlisted
Average retirement compensation received (with 20 yrs of service)
- ~33% of highest 3 yrs total pay
beowulf
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Huston55 - I agree with the ages you stated, but anyone in the military who serves 20 years on active duty retires with 50% of their high three average pay. That's how the retirement benefit is calculated. 33% of the 3 year total pay may or may not be the same, but the law reads 50% of the high 36 month average (monthly pay added up for 36 months, divided by 3 and then divided by 2). There are actually a few retirement systems for the military in effect now depending on when you entered service and how you opted for certain retention bonuses. You get 2.5% per year of active service.
For all the critics, the reason the retirement ages are young is that young men fight wars, old men send them to war. I went into the Army at 21, right out of college, and would have retired in my early 40s had I stayed active. After several changes of station in 6 years and one overseas deployment, I had enough. It's hard work and you are on call 24/7. And nasty people shoot at you. Anyone who believes the military benefits should be reduced would really benefit from a few years of active service, and if they are too old, then their children should serve. If you want to criticize our military, then you need to have some skin in the game other than a few bucks from your wallet. Fewer and fewer of our elected representatives have served in the military and almost none of their children do.
Actually, I am all for a return to the draft with a very small professional military running things rather than a large standing military. Retirement issues then take care of themselves as few draftees stay more than their initial tour of duty.
I did end up serving 23 years total with the last 17 being in the Army Reserve. I receive 40% of a 50% retirement - no where near a princely sum. And, in case you are unaware, the 50% or whatever the earned percentage is (it can be up to 100% of salary if you stay in for more than 40 years), it does NOT include housing and other allowances, which can make up 25% or more of a soldier's annual income.
For all the critics, the reason the retirement ages are young is that young men fight wars, old men send them to war. I went into the Army at 21, right out of college, and would have retired in my early 40s had I stayed active. After several changes of station in 6 years and one overseas deployment, I had enough. It's hard work and you are on call 24/7. And nasty people shoot at you. Anyone who believes the military benefits should be reduced would really benefit from a few years of active service, and if they are too old, then their children should serve. If you want to criticize our military, then you need to have some skin in the game other than a few bucks from your wallet. Fewer and fewer of our elected representatives have served in the military and almost none of their children do.
Actually, I am all for a return to the draft with a very small professional military running things rather than a large standing military. Retirement issues then take care of themselves as few draftees stay more than their initial tour of duty.
I did end up serving 23 years total with the last 17 being in the Army Reserve. I receive 40% of a 50% retirement - no where near a princely sum. And, in case you are unaware, the 50% or whatever the earned percentage is (it can be up to 100% of salary if you stay in for more than 40 years), it does NOT include housing and other allowances, which can make up 25% or more of a soldier's annual income.
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nun
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I would offer the usual argument made by many against public pensions, "you can't get blood out of a stone". Why are service men and women AWOL when it comes to our economic security? One sacrifice too many? Or is it that we value some jobs more and will pay for those, so what does that do to the "blood out of a stone" argument?
IMHO both public employees and the military do fantastic jobs and pensions benefits are part of how we acknowledge that. The vast majority of public pensions are pretty small and the fact that they are being attacked says a lot about the US. There need to be sensible adjustments and everyone must participate, that will mean cuts to Tricare, state COLAs and yes, increases on capital gains just to mention a few.
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nun
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The WEP is applied if the person gets a benefit paid for by non-SS income and does not have a complete SS record, over 35 years. Many states opt out of SS, but are still in Medicare, so state employees just pay the Medicare portion of FICA. If you have a partial SS record and SSA were to use the regular calculation of SS benefit your SS income would be averaged over your entire working life and your average wage would appear low and you'd get a higher percentage replaced. The WEP accounts for that. In my case I have 17.25 years of SS payments. Using the usual SS calculation I'd get $2800 a month, at 66 in future dollars. But WEP will reduce that to $2000.
Spanky
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I joined the USAF in the late 60s rather than risk being drafted (into the Army). I could have retired in my late 30s had I stayed for 16 more years. At the time I just wanted to get out as military was not for me. Early retirement and benefits did not enter my mind. I could have joined the Reserve but decided not to.
Spanky
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This is the argument made by the unions citing that the average is only $22K (which is below poverty level).
The rebuttal:
Article | Public-Sector Pensions Are Anything But Modest
Who is telling the truth?
travelover
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This article concentrates on New York and California. Were those states selected at random, or selected to skew their "data"?
OP
OP
It is very difficult to find research or data that is not skewed by ideology or political view.
travelover
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ERD50
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As far as I can tell, they BOTH are telling the truth.
They are using a different group, so it isn't a direct comparison, so it isn't a conflict. The union uses averages, and as the rebuttal points out, that includes the people who just barely qualified (worked just over 5 years), and are receiving very small benefits. That pulls the averages down. And presents the story the Union would rather have you hear.
The rebuttal is using the averages of those who retired with full benefits. I didn't see where they defined what that was, I'd be interested. But I think that is the group that people would really want to hear about, so I think it is a more relevant story. Including short-timers as the Union does skews the data in all sorts of un-meaningful ways.
And if those are COLAd, they are 'worth' about 2x a non-COLA pension. If that amount is available at age 55, that doubles the value again, relative to most private pensions (my mega-corp cuts your benefit in half to take it at 55 versus 65). A 4x difference in value is nothing to sneeze at (imagine a 16% 'SWR'!).
I'm guessing that was done because they had some specific quotes from people regarding those states. As long as they call it out, and don't try to use a specific case to represent averages, it's OK with me.
-ERD50
Huston55
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youbet
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Actually, that's not correct. GPO reduces or eliminates the spousal benefit that a gov't pension recipient (who worked in a job excluded from SS) receives. It's WEP (Windfall Elimination Provision) that reduces the amount of SS, based on his/her own SS earnings that a got'v pension recipient (who worked in a job excluded from SS) receives.
You can find this information on the gov SS web site. I also had some misunderstanding regarding WEP and GPO, but, amazingly, the gov SS site is pretty straight forward and a few minutes spent studying the info there will be very helpful. If you worked in a gov job not covered by SS and also earned some SS credits in another job, or if your spouse qualifies for SS, it's important to understand GPO and WEP and not confuse them.
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You are probably correct. I have to go back and look at the site again. I will not get SS but I believe my wife based on her private work record only will get her full benefit.
And people who leave the military in the 40s can get a job, right? If they want to ER, they can "bridge the gap" themselves until a pension kicks in at 55. As Admiral Mullen and SoD Gates noted, benefits are increasingly taking larger and larger chunks out of the military budget. That leaves less money for active soldiers.
Mullen Says Pay, Benefit Cuts 'On the Table'
"Defense Secretary Robert Gates has said health care costs are "eating the Department of Defense alive" -- with nearly 10 percent of the budget going to health benefits for active and retired servicemembers."
Simply put, our health care crisis is affecting everyone and everything.
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