nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
I will admit to not knowing a whole lot about how pension fund actuarial calculations are made, not having a pension myself. I just observe that whenever a pension problem is discussed in public, the two factors that are often cited are 1) the increase in the ratio of retirees to contributing workers, and 2) actual investment returns being lower than projected.
And the way this has been solved is always 1) reducing benefits to future retirees, and 2) demanding a higher contribution from current workers. So, that led me to think that the original benefit formula was too generous, whatever the cause of it.
In MA the solution has so far protected the pensions of retirees and current employees. The changes have been implemented for new employees and involve increasing minimum retirement age from 55 to 60, using a the average of the highest 5 years of salary rather than 3 years in the pension calculation and extra state budget appropriations for pension contributions.