dancinmama
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Post by dancinmama on Feb 1, 2012 17:10:34 GMT -5
Because I like my job! I'm not complaining about my salary/benefits, nor am I complaining about anyone else's. I think - although there are always some outliers - there is a pretty clear tradeoff between the two. Higher salary in the private sector vs. better benefits/more job security in government. If at any point I felt the benefits/job security here no longer balanced the lower pay, I'd go somewhere else. I disagree with the premise that once you've "invested" a certain amount of time with that company, you can't go anywhere else. If you can earn enough working somewhere else to offset the benefits you're giving up, then go for it. If you can't, then it's probably not that good a deal. I wasn't complaining either. I was responding to your comment about the wages being so much higher in the private sector. And I think that you're probably very lucky to like your job because you could have easily accepted lower pay and could have just as easily not liked it. All it takes is a boss or co-worker that is a complete pain in your backside or a total jerk. Sure, you COULD make a change IF you can earn enough working somewhere else, but that's a HUGE "if" after you're 10-15 years in. It's pretty hard to replace a lifetime payout in the form of a pension (even if it is relatively small percentage wise) with an increase in income. DH was offered positions at competitor companies and we felt it was way too risky, not only in terms of losing your pension, but also IF the new company found itself in a position where they might have to lay people off, which was not uncommon in his industry.
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dancinmama
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Post by dancinmama on Feb 1, 2012 17:12:05 GMT -5
Many 401ks don't vest for 5 years and many companies run lower-level folks out long before then. I don't know anyone with a vesting schedule that long on 401k matches. The most I've seen is 2 years, and quite a few companies have them vest immediately now. Is anyone on this board working somewhere that has 401k vesting schedules longer than 2 years? DS worked for a company where the vesting was 5 years.
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Deleted
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Post by Deleted on Feb 1, 2012 17:13:39 GMT -5
Many 401ks don't vest for 5 years and many companies run lower-level folks out long before then. I don't know anyone with a vesting schedule that long on 401k matches. The most I've seen is 2 years, and quite a few companies have them vest immediately now. Is anyone on this board working somewhere that has 401k vesting schedules longer than 2 years?Yes. Our vesting is after 8 years. Thankfully I've reached that.
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The J
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Post by The J on Feb 1, 2012 17:14:40 GMT -5
Again, you can't make such broad generalizations. My BFF from high school works for a municipality as a clerk (high school education only). She makes aver $70K and her annual pension will be higher than DH's for less years of service. There is ONE reason that many large companies went to unlimited sick pay - MONEY!! They can either allow employees to accrue sick pay and pay them for it when they leave the company OR they can offer unlimited sick pay and council people who they think are abusing it. My DH has been working for the same company for almost 32 years and has taken the normal day off here or there when he had a cold or the flu. He also has to keep an eye on the "lost time" of people who work for him to ensure that they are not abusing the "benefit". IF his company had accrued sick leave instead of unlimited sick leave, the company would owe my DH a shitpile of money upon his upcoming retirement. With unlimited sick leave, they owe him nothing. Did I make any generalization or did I compare a specific Fortune 500 company employee with an equivalent municipal position in a fairly similar geographical locality?
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dancinmama
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Post by dancinmama on Feb 1, 2012 17:15:24 GMT -5
Municipal employees are COMPLETELY different from federal/state government employees. I agree that this is where the big pension "abuses" occur - retired policemen receiving $100K/year after 20 years of service, etc. But lumping municipal employees with federal or state employees is no different from lumping mom & pop businesses with Fortune 500s. I'd say a good 99% of the "OMG they're getting HOW much in retirement?" anecdotes involve municipal employees. As Phoenix and others have stated, the feds and the states are no longer that generous. NO ONE gets a pension that even comes close to their annual salary. Note that I was responding to The J's post about a municipal worker.
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The J
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Post by The J on Feb 1, 2012 17:16:23 GMT -5
And pensions always magically vested immediately?
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Sum Dum Gai
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Post by Sum Dum Gai on Feb 1, 2012 17:16:37 GMT -5
Yes. Our vesting is after 8 years. Holy crap! That must be one hella generous match.
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midjd
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Post by midjd on Feb 1, 2012 17:17:52 GMT -5
Because they usually are, especially for higher-level or professional employees. Obviously not at EVERY Fortune 500 company, but at most, the wages are GENERALLY higher than they are in the private sector. If they weren't, the government would be flooded with job applications and the Fortune 500s would be pounding the pavement looking for employees.
Are you trying to say that most private companies pay less than the government for the same jobs?
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Deleted
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Post by Deleted on Feb 1, 2012 17:22:34 GMT -5
Yes. Our vesting is after 8 years. Holy crap! That must be one hella generous match. It ain't bad! ;D
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❤ mollymouser ❤
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Post by ❤ mollymouser ❤ on Feb 1, 2012 17:24:42 GMT -5
Wow. Interesting thread. I don't think my wonderful DH (active duty military) is overpaid. I wouldn't say that he is horribly underpaid, either. And he does get to travel to all sorts of interesting and exciting places as part of his job. This year, he gets to visit Afghanistan, among other places.
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dancinmama
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Post by dancinmama on Feb 1, 2012 17:25:04 GMT -5
Did I make any generalization or did I compare a specific Fortune 500 company employee with an equivalent municipal position in a fairly similar geographical locality? I was doing the same thing, except I was comparing a municipal clerk with a degreed professional in management with more years of service, both working in THE SAME geographic location and noting that the clerk will receive the higher pension.
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Sum Dum Gai
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Post by Sum Dum Gai on Feb 1, 2012 17:30:49 GMT -5
Cliff vesting means 5 years or nothing. Graduated vesting means that you vest in steps, sometimes as long as ten years. Then you obviously left an option out, because my current company has the match vest 100% immediately. You're eligible to start contributing from the day you start work, we're paid every two weeks, and the match you get with your very first check is 100% yours the second it hits your account.
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spartan7886
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Post by spartan7886 on Feb 1, 2012 17:37:47 GMT -5
Yes. Our vesting is after 8 years. Thankfully I've reached that. Are you sure that's not outdated information? Per the IRS here matching contributions must vest within 6 years.
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Deleted
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Post by Deleted on Feb 1, 2012 17:46:38 GMT -5
Yes. Our vesting is after 8 years. Thankfully I've reached that. Are you sure that's not outdated information? Per the IRS here matching contributions must vest within 6 years. I'm certain.
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spartan7886
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Post by spartan7886 on Feb 1, 2012 17:49:29 GMT -5
How are they getting around the rules?
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Sum Dum Gai
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Post by Sum Dum Gai on Feb 1, 2012 17:49:32 GMT -5
No, pensions don't automatically vest, but on the other hand, you don't put your own money into them either. Yeah, like fifty years ago. Now most people do have to pony up at least some money in pension contributions.
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resolution
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Post by resolution on Feb 1, 2012 17:50:33 GMT -5
No, pensions don't automatically vest, but on the other hand, you don't put your own money into them either. Selling people on a "pension substitute" that requires they scrape up extra money out of their own pocket and subjects them to a ten percent excise tax on top of income taxes if they have to access their own money during a period of unemployment is a little much. A lot of pensions require the worker to contribute toward the pension. I am paying 11% of my income toward mine. As long as I work there I have no access to that money, not even the option to pay a penalty or take a loan against it. However if I become unemployed and cash it out I have to pay the same penalties as I would on a 401k unless I roll it into another qualified retirement account.
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resolution
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Post by resolution on Feb 1, 2012 17:54:08 GMT -5
Did I make any generalization or did I compare a specific Fortune 500 company employee with an equivalent municipal position in a fairly similar geographical locality? I was doing the same thing, except I was comparing a municipal clerk with a degreed professional in management with more years of service, both working in THE SAME geographic location and noting that the clerk will receive the higher pension. One thing to keep in mind doing comparisons is that your DH's pension is only half of his retirement package, he also receives his 401k match. Many government employees with good pension benefits aren't receiving any other retirement matches, so the pension is their whole package.
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dancinmama
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Post by dancinmama on Feb 1, 2012 17:56:33 GMT -5
Because they usually are, especially for higher-level or professional employees. Obviously not at EVERY Fortune 500 company, but at most, the wages are GENERALLY higher than they are in the private sector. If they weren't, the government would be flooded with job applications and the Fortune 500s would be pounding the pavement looking for employees. Are you trying to say that most private companies pay less than the government for the same jobs? Not at all. I was simply responding to your comment "Fortune 500 employees might not get a pension, but they make more over their working lifetime, so it ostensibly evens out". I suspect that when all is said and done, that there is very little that can trump a lifetime pension, especially one with COLAs built in that might have to be paid out over 30 years or more, but I could be wrong. When DH's Fortune 500 company dropped their defined benefit plan, they did not increase the wages for the employees to offset it. They gave them 3 weeks of vacation the first year of their employment instead of two.
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Sum Dum Gai
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Post by Sum Dum Gai on Feb 1, 2012 18:01:10 GMT -5
In government service, yes this is true, but not in nonprofits or in the corporate world. In non-profits and the corporate world pensions are about as rare as unicorns anyway, and even if you find one they stopped being offered to new hires sometime last millennium. In other words, who cares? They aren't applicable anymore since nobody gets them.
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Post by The Walk of the Penguin Mich on Feb 1, 2012 18:05:10 GMT -5
No, pensions don't automatically vest, but on the other hand, you don't put your own money into them either.
I did, at my last job for 14 years. Not sure where you're getting your info wrong, but it's very out of date. I contributed to a pension fund from 1886 to 2000. This was in a non-profit, and if I was still there, I would still be contributing to my pension today.
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dancinmama
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Post by dancinmama on Feb 1, 2012 18:07:34 GMT -5
I was doing the same thing, except I was comparing a municipal clerk with a degreed professional in management with more years of service, both working in THE SAME geographic location and noting that the clerk will receive the higher pension. One thing to keep in mind doing comparisons is that your DH's pension is only half of his retirement package, he also receives his 401k match. Many government employees with good pension benefits aren't receiving any other retirement matches, so the pension is their whole package. She also has a 401k. I wouldn't want to state emphatically that she gets a match, but I "think" she does because it seems to me that when we were talking everything else considered was pretty equal (which is why her pension was a mind blower to me), but it's been a while and I suffer from CRS so I can't say for absolutely sure.
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Post by The Walk of the Penguin Mich on Feb 1, 2012 18:10:06 GMT -5
Huh? Privileged? WTF are you talking about?
I had to contribute 6% of my income to a pension fund and I had no choice in the matter. This is the still the same retirement option at that employer 12 years later.
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dancinmama
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Post by dancinmama on Feb 1, 2012 18:12:24 GMT -5
Wow. Interesting thread. I don't think my wonderful DH (active duty military) is overpaid. I wouldn't say that he is horribly underpaid, either. And he does get to travel to all sorts of interesting and exciting places as part of his job. This year, he gets to visit Afghanistan, among other places. molly: And I have a deep respect for his sacrifices...and yours.
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dancinmama
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Post by dancinmama on Feb 1, 2012 18:14:09 GMT -5
Huh? Privileged? WTF are you talking about? I had to contribute 6% of my income to a pension fund and I had no choice in the matter. This is the still the same retirement option at that employer 12 years later. That being the case, what are the qualifications for being able to receive your pension (i.e. age, length of service)?
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Post by The Walk of the Penguin Mich on Feb 1, 2012 18:57:11 GMT -5
That being the case, what are the qualifications for being able to receive your pension (i.e. age, length of service)?
I was vested, but the way that the plan worked was that from 10-15 years, I would have received 10% of my highest 3 years of income. At 20 years, it would have been 30%. After that, for every year of employment, I would receive an additional 2%, so 25 years would be 40%, 30 years 50%.
I calculated that had I left my retirement there for 25 years and started collecting at 65, I would not have even collected my contributions to the pension - let alone the matching 6% my employer contributed if I lived 20 years.
I was employed there from 1986-2000....so for 14 years.
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dancinmama
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Post by dancinmama on Feb 1, 2012 19:26:45 GMT -5
That being the case, what are the qualifications for being able to receive your pension (i.e. age, length of service)?I was vested, but the way that the plan worked was that from 10-15 years, I would have received 10% of my highest 3 years of income. At 20 years, it would have been 30%. After that, for every year of employment, I would receive an additional 2%, so 25 years would be 40%, 30 years 50%. I calculated that had I left my retirement there for 25 years and started collecting at 65, I would not have even collected my contributions to the pension - let alone the matching 6% my employer contributed if I lived 20 years. I was employed there from 1986-2000....so for 14 years. Yep, the first 14 years doesn't get you much except almost half way to the "big prize". That is why it is hard to walk away from. It's too much time to recoup elsewhere, but not enough time to get you much of anything in terms of a pension if you leave it behind. I don't know what your wages were like, but a 50% pension for 30 years of service is pretty darn good - even with your 6% contributions. Let's say your earnings over 30 years were $1.5M (an average salary of $50K/yr). Six percent in pension contributions over those 30 years would be a mere $90K. Not bad for a 50% payout for the rest of your life. IF you ended your career making $50K, you would make your contributions back in the first four years of retirement.
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Post by naggie1972 on Feb 1, 2012 19:36:41 GMT -5
HA I did coach DD soccer team, for a few years I might add.
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TheOtherMe
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Post by TheOtherMe on Feb 1, 2012 19:38:22 GMT -5
However, as I worked my way up after getting an accounting degree, I could have made more money in private industry. However, I had so many years in that it would have been difficult to leave and start over as to retirement. TheOtherMe has just pointed out the "Trap" that alot of people get stuck in, in both areas of jobs (private and government). The old "I've got too much invested in this job to risk starting over somewhere else". I see/hear this from teacher friends/aquantainces and even from some other union workers I know. I also had a friend who stuck with a company to the bitter end (and got a big Thank You for your 27 years of hard work when she was let go). They are all hanging in there in order to receive some 'big reward' at the end. I guess that's an example of the ever lauded "Puritan Work Ethic" suck it up, tough it out, endure the hardships and get your reward from the Big Guy (someone else - your employer, your union, the governement) when all said and done. I think the people I know have gotten caught in the 'trap' due to Human Nature (and fuzzy math) about "sticking with what you've invested alot into' versus the intent to become incompetent at their jobs or being lazy or not having the education to do some other job. I don't consider myself incompetent or lazy or not having the education to do another job. I did decide after being around CPA firms during tax season that I didn't think I'd like working for one. I'd be in the "bullpen" at the old Big 8 accounting firms and the new kids would all be working very, very hard in hopes that they wouldn't be laid off on April 15. Same was going on in mid level firms. I'd be back after April 15 and many of them would have been laid off. After I retired, I did prepare taxes for 3 very small firms. Those firms did not pay well and the stress level during those 3 1/2 months was not worth $14 per hour.
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wvugurl26
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Post by wvugurl26 on Feb 1, 2012 19:38:51 GMT -5
If its so fabulous and we are so overpaid come work for us!
I pay into a pension that is nothing like the old one. If some Congressmen get their way it'll be gone bc I have fewer than five years of service and they'll keep all of my contributions. Way to steal from people oh wait many politicians are nothing but professional crooks.
I also pay into a 401k and SS not that I expect to get anything back from SS. I've been at my job for 1.5 years and in that time frame there have been two times we've come this close to shutting down. Not my idea of job security.
If you get the old federal government pension thats all you got besides anything you did on your own. There was no TSP (401k) for those under the old system, a system that's been gone since right around when I was born in 1984.
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