Comment by Workaccount2
2 days ago
Not all, and they are rarer today, pensions were totally insane back in the day.
One of my mothers friends, who is now in her 80's, has been retired on a pension for over 40 years. She started working for her municipality right out of high school at 18, and worked 25 years as a clerk to get a full pension. Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
Its totally insane and completely unsustainable. Back in the day people usually keeled over at 65 and the US was viewed as having achieved infinite growth forever, so perhaps back then it was a reasonable but generous offer. Today however it's just straight up corruption and waste to offer benefits like that.
My Dad's friend is a retired fire chief, my Dad told me he makes $300K a year in retirement! That is beyond insane as it ends up costing (with a retirement at say 55) about 30 or so years of payments which adds up to $9M for the reminder of his life. This is clearly not sustainable and when you add up social security and 401k it ends up with a kings ransom for a public servant.
What about solidarity? Instead of criticizing another worker’s situation as “insane”, we should be asking: why can’t we also have this kind of retirement package? They’ve successfully pitted worker vs worker.
I don’t think that retired fire chief’s (or school teachers') retirement is what’s wrong: what’s wrong is that most of us will not have a retirement that good. Why is that? It is possible to answer that question without tearing down someone else’s situation.
It comes from crab bucket mentality and a pervasive fear that somebody somewhere might be getting something they don't "deserve".
Everyone who gives a company years of their life should be able to comfortably retire after decades of service, but companies have managed to convince workers that most of them should work until the day they die and only a small precious few deserve to retire and finally be allowed to spend time with their loved ones.
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Because it isn't sustainable.
Only a select few can acquire that kind of retirement and it's borrowed from everyone else. It's selfish.
The pension generations over spent and borrowed heavily to fund their retirement and lifestyles. The subsequent generations pay for that. It's selfish and short sighted.
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I don't think you understand my issue with this persons pay(and not theirs but alot of city workers). I am fine with a private company paying out of their profits any amount they deem reasonable to a retired leader. Where I have the issue with this is his retirement is bankrupting the entire state/county/city(this is in California) and depriving working productive citizens vital amenities. Having a $300k per year pension is beyond extravagant and is not needed to sustain a healthy lifestyle. I mean looking at tax returns and income brackets that would put his retirement salary(not including 401k and social security) well into the top 5% of all earners and he is not even working.
US GDP per capita is ~80k. IF you eliminated every billionaire and leveled every salary, this is the max you could get. Much less in actuality, because you would have a universal tax rate of about 40% on that to support the federal government, so ~50k per person after taxes.
DOGE needs to take a look at this. Government jobs are totally unfair.
Unless the fire department is federal, DOGE has nothing whatsoever to say about the matter. They don't get to give orders to state or local government, no matter how much they may want to.
> Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
I don't think that's insane at all. Sounds pretty reasonable in exchange for taking at least one third of her time for 43 years of her life (and over those years where she was young and most healthy).
Corporations used to offer similar pensions all the time. They started offering them in 1875 and they were extremely successful doing it. 401(k) plans were a scheme to shift the risk and responsibility from the employer to the employees and that change made already wealthy and successful companies a lot richer, but at the expense of making many people work right up until the day they die, or they become too sick to work at which point they become impoverished. The move from pensions to 401(k) plans was bad for the economy, and for local economies in particular.
The only thing I think is crazy about it is the lifelong medical benefits which shouldn't be on the employer at all since everyone should have universal coverage.
Just ballparking...
That's ~3.75 million dollars, plus probably another ~$250k benefits from when she turned 18 to today.
So $4 million dollars for 25 years of entry level work.
It works out to roughly paying a secretary at the municipal building $150k/yr to answer the phone? Do data entry? Collect payment for tickets?
You don't think $150k is insane pay for a municipal secretary?
> It works out to roughly paying a secretary at the municipal building $150k/yr to answer the phone? Do data entry? Collect payment for tickets?
I makes absolutely no difference what she was doing for the company because every second that she was on the clock what she wasn't doing was spending her time with loved ones, pursuing her own goals and interests, or even deciding for herself when she could have lunch or take a break.
Our time on earth is tragically short, and even someone pushing a broom for 8 hours a day is sacrificing decades of their life so that someone else can make money. Any work that needs doing and requires a person to make that sacrifice entitles that person to a living wage and a retirement. People should not have to work for someone else from the age of 18 until they drop dead.
Not only that, but sometimes the municipality hires them back on a consulting basis to get them a paycheck and a pension for the same work.
My mom has been retired from teaching for over 30 years — and she got a package to retire early.
Weird situation. Shrinking demographics in the 70’s led to layoffs. By their union contract layoffs were done strictly by seniority. Working on a contract that was stepped by seniority, this led to a very top heavy cohort of teachers 20 years later, who were being paid top of the scale. To redistribute the ages of service they offered a limited number of buyouts, which lowered their overall costs and normalize the pipeline.
This was also a legit and reasonably sustainable move as the NY State Teachers fund, is funded at 101% of liabilities.
If your mother's friend's situation actually unsustainable? It sounds like the pension actually has the money, since I'm assuming they're not able to print money (like what is necessary for certain old-age insurance programs). Or do you just mean that it's not sustainable for everyone to have that same situation?
It’s not her fault that she lucked out
It's not her fault. However, as a taxpayer, I don't want my money to be taken from me (postponing my own retirement) to fund her retirement. And that is absolutely going to happen with insolvent pension funds.
> as a taxpayer, I don't want my money to be taken from me (postponing my own retirement) to fund her retirement.
by that logic, sure, as shareholders in Meta (or any public tech co), we absolutely don't want employing expensive human devs to fund their retirement.
.. see where this is going
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It's not about fault, it's about providing better than you got for your children and grandchildren. If you - and the people compensated with the same equities that fund your pension - are putting substantial downward pressure on earnings for the current generation of laborers and it's having all sorts of knock-on effects, you're failing to provide better for those coming after you.
You can’t solve that by taking away existing pensions. If that’s your preferred method of balancing budgets then expect no sympathy when your company cancels your RSUs
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Of course not, but that doesn't make it a sustainable practice long term.
> perhaps back then it was a reasonable but generous offer.
No, it was a trade. You would accept low pay, very little opportunity for career advancement, and even if you worked hard to advance you were never going to more than double what you were making when you were hired. Also, government jobs are political jobs, are often eliminated on a whim, or you're forced to work unpaid for a while because of a budget vote.
In return, you got a pension. A pension that everyone understood the yield of, and everybody understood about what it was worth. It was entirely sustainable. The problem was and is that invested pension funds become underfunded because if instead of depositing the money, you spend it somewhere else and promise to put it back later, it's basically a low-interest loan. If the budget is tight enough (so credit is probably bad enough) that a state or municipality is considering raiding pensions, then this represents a huge amount of savings. The problem is that you're never going to pay it back.
Another problem is that managing those funds became lucrative for the managers, and for the products that they would steer these institutions into buying, often in exchange for kickbacks or in a complex web of self-dealing: Somehow, the person managing pensions funds for your state has them all invested in products sold by a company his son works for. His son didn't directly profit from the trade, but for some reason makes $500K a year, barely graduated high school, and nobody knows what he actually does there.
That's not the fault of pensions, that's the fault of thieves. What's unsustainable is a government that promises a pension in return for a shitty boring career as a clerk, and then after you retire from sitting in a DMV window for 25 years, takes the pension back. Nobody would accept a government job cheaply then, because the state has ruined its reputation in the same way as if they had defaulted on their bonds.
Nothing wrong if that's how we want to pay government employees: a days work for a days pay. But we got a discount because we didn't pay like that, and if we had, that money would just have been spent at the time, rather than being stolen throughout their retirement. Pretending like pensions were an unreasonable demand or an absurd promise is just laying groundwork to justify stealing from people who worked for a living.
edit: If government jobs were so good, why weren't they in demand? Does supply and demand only break down when we need it to?
1) If pensions are so easily manipulated and stolen from, that's an argument against pensions, not an argument for them.
2) Although the factors you mention are real, they are much smaller than core issue, which is the state underfunding the pension, either explicitly or through unrealistic expectations of return.
3) Even granting that the present government should make sure that pensioners get their full benefits, why should current workers be the ones to bear the burden of past bad decisions by policymakers? You could just as well tax pension payments more highly, and use that revenue to fund the pensions.
> Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
Some go on to another municipal job and get a second pension so they get paid twice as much to do nothing in retirement. I know someone who worked for the USPS then on to the NYC DoE as a janitor in a school. His wife worked for the public school system as well, then went on to work in a catholic school after retirement. Three pensions in one household. They invest a lot into long term investments such as bonds, CD's and the like. I hear they have millions in the bank.
The people who worked those jobs are all sitting pretty right now. I know plenty of people who made out like bandits in various NYC agencies, especially in the DoE. My aunt left her heirs 2.2 million and a house worth a million from her pension money she heavily invested and was still able to travel the world in retirement. She was a secretary in a middle school. Amazing what you can do with tons of free time and money.
I've got people in my family in similar situation. 25 years in an unskilled cushy job was enough to buy a lifetime of cushy retirement. Boomers were basically handed life on a platter.
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"No, $400k total comp is entirely reasonable for being able to center the ReactJS divs."