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Originally posted by SIG228:

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Originally posted by Fly-Sig:

Exactly.

When those of us private sector workers have lost our pensions and see our wages getting squashed down, it is getting more and more unpleasant to watch our high school and college friends living nicely on their government pensions at age 55. I understand and philosophically agree with the idea the pension was an obligation the government employer entered into, and the employee should receive it.

But when I'm 65 yrs old, working, and living frugally while my friends have been retired for a decade already, I'm not going to be receptive to tax increases to pay their pensions!

Nothing but sour grapes. Maybe you should've made different choices in life. My biggest regret is I didn't follow my buddies and join the National Guard right of high school. Some of them will end up with three solid pensions by the time they retire.

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Originally posted by Fly-Sig:

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Originally posted by jimmy123x:
Hardly any of these workers in the public sector get a pension and quite honestly, the city's pay scale is pretty darn good compared to private sector?

Well from my perspective on history at 56 yrs old, it has to do with the arc of the private economy vs the arc of public sector unions and liberal politicians in power.

Back in the early 20th century there weren't many pensions. But good employers started offering them. More and more employers started offering pensions as a way to attract hard working loyal employees.

In the 1980's that was all changing. It became too expensive to keep pension plans going. Companies saw it was cheaper to ditch the pension and not worry about loyal employees. They went much more to the short term employee model which saved on payroll and benefits.

Ergo in the private sector there are very few pensions any more.

But over the same time period the public unions were powerful and negotiated sweet contracts. Politicians were happy to hand out all kinds of future unfunded benefits because it got them votes. Public sector jobs paid more and more, their benefits got better, and their pensions got even sweeter.

When I came out of engineering college in 1982 I had an excellent starting salary of $26,500 at IBM. If I'd gone into government service as an engineer I would have made about 75% of that. If I'd become a teacher I would have made even less. But, I would have had much more job security in a public sector job.

Historically then that was the tradeoff. One could go the private sector road and likely make more money but have less job security. One could choose public sector and have job security (and likely easier less competitive schedule).

Both paths, though, would likely lead to a pension of some sort.

Today it has been turned upside down, where pubic sector jobs pay better than many similar skill level private sector jobs, plus they have pensions.

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Originally posted by springnr:....Private companies/employers must be competitive to stay viable, a government entities not so much.

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Originally posted by jimmy123x:....That's not entirely true, the employers went to a model of retirement compensation that was long term sustainable. Matching 401k benefits, they match what the employee puts in, the employees retirement is solely funded by how the economy and their 401k does....

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Originally posted by Scoutmaster:
That is called a "defined contribution" pension. The employee gets whatever is in the fund, contributions from both parties plus earnings, upon retirement. Almost all private sector pensions these days are defined contribution, whereas most gov't pensions are defined benefit. The latter is much riskier, hence the current topic, defined benefit pensions will bankrupt many governments.

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The difference with government employees are that many, maybe most, are covered by civil service protects that, once there in make it difficult to get rid of them. There is a process, but it's such a PITA that, unless the problem is criminal, or such a massive PR problems, the managers won't bother trying to get rid of someone, who, in a private sector job, would just get fairly easily canned.