If you were to start from scratch with employee benefits for city, county and state workers, what would you offer in terms of retirement and health care and who would pay what?
Home » Question of the Week » If you were to start from scratch with employee benefits for city, county and state workers, what would you offer in terms of retirement and health care and who would pay what?
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Same as what the Military does. Your retirement is based on the number of years put in with 20 being the minimum before collecting. There is no spiking of vacation, overtime or saved sick days. You must put in at least 20 years to collect any VA Health care benefits. There is no overtime in the military but there is hazard, separation and sign on bonus programs. There are incentives to advance through education from accredited schools that are longer than 2 weeks for a degree as most are regular 4 year colleges. In the guard we got a break on health care but not much as we had to pay most of our own. The biggest factor is there is no spiking in the last year of service to increase benefits, it’s based on the total 20 years.
Should there be pensions? What % of private sector jobs have pensions?
One idea would be to not have any employees make them all private contractors. This would do two things take the burden off the gov regarding pensions and health care. Also this would let the public employees invest and spend thier earned money the way they feel it should be. This could never happen because of the unions stong hold on everything. Why dont we look at salaries and benefits from 1990’s era since that is where our revenues are at. Would be an interesting comaparison. Maybe tie benefits and salaries to GDP or CPI. Might give the public sector some initiative to help keep the economy moving forward and might stop some of the lame duck regulations that are killing industries in the USA. Just some ideas probably not very practical but oh well just throwing it out there.
Don’t know what percent of private industry has pensions but the amount is nothing like we give our employees (government workers). I’d say you could expect about 35% of the average of your last 10 years salary when you reach 25 years of service to a company. If I’m informed correctly we give some people 100% of salary in retirement in California. This is why we are going broke.
Pensions in private industry have been replaced steadily by a variety of programs at larger private sector companies like, 401k’s with a small match from the company during the years of employement that end once the employment has ended; stock employee purchase plans (wouldn’t work here since government is not designed to turn a profit per se so there is nothing to distribute); bonuses, stock distributions (again government doesn’t have stock) and health and welfare benefits (I cover upwards of 40% of the cost for my employment).
Some companies guarantee health benefits after retirement at a certain number of years served plus attainment of a certain age, 55 or 60. Everyone else is covered under COBRA but that just guarantees availability at a guaranteed rate for up to 18 months, or so.
Privatizing government services (that’s us delivering services directly to us) only adds a profit center as middleman. A middleman that will pay less than living wages and won’t offer ANY benefits, profit sharing, stock or bonuses because in their race to the bottom they will shave every penny to get that contract.
I prefer the direct pay method myself.
So, not alot of solutions to offer, just food for thought.
Both of my parents worked for the government, one in education and the other in the library system. In “the old days” people took those lower paying jobs because they knew they’d have good benefits for their family and their retirement.
Over the years the benefits stayed the same but the salaries became competitive.
But, this is now and things have changed. It will cost all less in the long run to offer competitive wages from the beginning, reduce or eliminate the retirement benefits (or offer matching 401k) and have a fair medical package. Most people have to pay a hefty amount on their paychecks, but the employer has always paid even more. Businesses pay what they can afford and government shouldn’t be any different.
While they’re working, paid for health coverage, with standard private sector deductibles. Take advantage of their group buying power! If they’ve put in 20 yrs., covered health ins, again with deductibles.
And if they’ve put in 20yrs., a pension. But at the absolute most, 90% of what they made! In most instances, more like 80%.
Most people, even those that want to see government scaled back, are supportive of a good benefit program for govt. workers. You want basic stability and in the jobs and with their group buying power, it’s reasonably cost effective to get those benefits. Plus, it was viewed that govt. workers were making a pay a sacrifice as they were not in the for profit sector.
But the problem has been that in recent years, govt. workers have received very generous raises on top of their generous benefit packages! And those pay raises have thus led to very generous pensions! Two examples-the 30%! raises So. Lake
Tahoe top mgt. received a few years back, and the fact that 1 in 8! State of CA employees make over 100k/per year! Give them decent benefits, but the pay is what’s gotten out of whack!!
same as military
80 to 90% of salary as a pension is just asking the taxpayer to support someone for life. Have them save their own money in 401ks to supplement a 35% pension after 25 years plus paying for social security like the majority of the country. By the way, health care as a retirement benefit is a thing of the past. Companies just don’t do that any more and neither should the city or state.
make all join social security.
Government employees and politicians should be bound by the same laws that the rest of us live by. They should not be exempt from Social Security, they should not have select health benefits only available to them. When they live as we do they will start to truly represent us.
Today’s Trivia: Did you know that Congress, when they passed the employment anti-discrimination laws, exempted themselves? Why do we stand for this?
I will eventually be getting the retirement you are all so anxious to cut…
A couple of pieces of information you seem to not understand:
-Most public retirement plans require one to be at least 50 and have five years of service when you are eligible to retire (this should probably be 60 and ten years of service)
-Most plans have a component that includes longevity (how long you work for the public) as a part of the calculation
-Reasonable plans only pay out 2% of your highest wages back at 55 (again, this should probably be change to 60)
The high retirements and excesses that are in the news are the exception and are usually attributed to Managers and not average workers. Yes there are unions that are getting 2-5% at 50 but these are usually Police and Fire Unions which have special circumstances and are political hot potatoes. Your average Teacher, City Worker, County Worker and other Government Worker has to work into their 60’s to afford to retire. Most of us do not get health benefits into retirement and have to pay into the health plans we have. Most of us do pay into Social Security and Medicare (Teachers are an exception).
I agree that the loopholes that allow one to accept a management job for one or two years to boost ones retirement should be looked at. Retirement before 60 should be discouraged and plans that give more than 2% before 55 or 60 are not fair to the tax payers. I have no problem with averaging ones wages to make retirement calculations and other reasonable changes. I am a tax payer too and only ask for a fair shake.
I gave up a good private sector job with great benefits and a 401k plan for a lessor paying job in my home town. I will have better than 30 years working here when I retire and feel a reasonable retirement is not too much to ask considering the wage cut and stock options I gave up to come work here.
Don’t accept everything you hear from Politicians and the Press. Certainly consider reasonable changes to Public Retirement Plans but also understand that the true story is likely somewhere in the middle of the extremes you are all being presented in the public space. It will be your neighbors who have to live with the changes that eventually are made to these plans.
My two Cents
-Local Yokle