Do most of you have pensions????

barbeml said:
DH and I have no pensions.

I accept that and we are working hard to save for retirement, but I'm getting mighty sick of watching my taxes zoom up to pay for all those public employee pensions.

Public Employees pay taxes too! At least in the state of Georgia. ;) That's what I miss about living in FL...no state taxes. The tourists helped fund the government. Now that I'm back in my home state (GA), I get to file two tax returns in April. :rolleyes: At least I'll get some of it back when I retire with that public employee pension. ;)
 
I'm an engineer for a private company. They do not offer pensions so I put away money in my 401k.
 
Nope, none of Dh's jobs had a pension. Stocks and 401k in Sears but nothing else in the other companies he worked/works for. :guilty:

We really have to get started saving soon.
 


barbeml said:
but I'm getting mighty sick of watching my taxes zoom up to pay for all those public employee pensions.

The contribution by DH's work (public employee) is 4%. How is that any different than a private sector company matching a 401k plan?

Providing a retirement benefit is just one expense of employing a person to do a job. I think you, as a taxpayer, probably come out ahead seeing as how your kids can go to school (taught by an underpaid teacher), you can call the police if someone robs your house (because everyone knows patrol officers really clean up :rolleyes: ), there's a State's attorney to prosecute the bad guys (an attorney making WAY less than market wage), and you have roads to use (created by an engineer who could double her salary doing private consulting).

Oh yeah--and all those people pay taxes! I've never heard of anyone who went into a government job for the money. I'm sorry you feel that providing a basic retirement benefit to employees is overspending. :guilty:
 
My company doesn't and DH's current company doesn't either. However, he is starting a new job and they do have a pension plan. Hopefully, he'll retire from there!

We both have 401(K) accounts too.

Debbie
 
mickeyfan2 said:
Very true in the private sector and will be an issue soon in the public sector. My Aunt, who is a retired teacher in Il, told me the state just merged (not sure of all the details) the teachers pension plan (the the teachers funded) with the general state pension fund (which was underfunded) and they are now worried about the future. I know other states are looking at the state pensions as being too expensive, so they may start cutting them too. Only time will tell. I hope that all who have a pension will have it when they retire and for their entire retirement. I tend to like to control my destiny, so I chose a different path.

I guess we could "what if" this to death, but it wouldn't get us anywhere. We could make the same suppositions about the stock market and what would happen to your 401k if it crashed.

My pension fund is extremely stable and well funded. I'm not losing any sleep and I very lucky to be in the situation that I am.
 


barbeml said:
DH and I have no pensions.

I accept that and we are working hard to save for retirement, but I'm getting mighty sick of watching my taxes zoom up to pay for all those public employee pensions.


Since you live in NJ I can comment on this directly. Any increase in your state taxes has little to do with public pensions. The public pension system that I belong to is so stable and well funded that the State has allowed most towns in New Jersey to defer indefinitely their contributions to the State Pension sytem. This has been going on for at least the last 10 years... so, at least in the case of my pension system, the employees are funding it, not the taxpayers.

If your taxes are "zooming" up its likely due to increase costs in other areas and mismanaged spending by your elected officials.
 
pearlieq said:
The contribution by DH's work (public employee) is 4%. How is that any different than a private sector company matching a 401k plan?

Providing a retirement benefit is just one expense of employing a person to do a job. I think you, as a taxpayer, probably come out ahead seeing as how your kids can go to school (taught by an underpaid teacher), you can call the police if someone robs your house (because everyone knows patrol officers really clean up :rolleyes: ), there's a State's attorney to prosecute the bad guys (an attorney making WAY less than market wage), and you have roads to use (created by an engineer who could double her salary doing private consulting).

Oh yeah--and all those people pay taxes! I've never heard of anyone who went into a government job for the money. I'm sorry you feel that providing a basic retirement benefit to employees is overspending. :guilty:

Amen!
 
Ugh, looking at all these posts makes me feel a bit "sick". My husband and I have both been "laid off" from our jobs that we always thought would be long-term. Anywho, even with all our contributions, unless one of us dies to leave the other the life insurance, we are screwed!

It's so sad; I feel bad for all of us that are in this situation (more than we think I'm sure) and even with our best efforts, are so far from our retirement goals. I was always taught an education would guarantee your future, well I guess that doesn't include a bachelor degree anymore, if it's not a masters or greater, your might as well have been a high school drop out! At least from where I sit….

I guess you'll see us handing you a shopping cart at Walmart when we're 70-80! (Hmm maybe considering what’s happening to the country with the Bush administration suicide can be given a free pass by the new Pope!?).....
 
mickeyfan2 said:
We have no pension and really don't want one. I prefer to control my destiny not a company. They can cut your pension since they are in charge. We will be funding our retirement with 401K, IRA and extra savings.
I don't understand why you wouldn't want a pension. The pension is fully funded by the employer in our case. I don't see it as controlling our destiny at all. We contribute to 401k and IRA's and have savings. The extra dollars from a pension will be gravy on top of that, provided it is still there when DH retires. Plus he may have good retiree health care; he's been there 26 years so we're hoping that doesn't go away, they did cut it for new hires.
 
I was given the option of keeping the traditional pension (defined benefit) plan, or having an additional 4% deposited into my 401k (in addition to the match).

I chose the 401k route for a number of reasons.

1. I do not think there is a good chance I will retire from my current employer the way things are these days.

2. The 401k is guaranteed and cannot be revoked.

3. The pension can be scrapped, reduced, reworked, or go bankrupt at any time if you read the fine print.

I think for younger people, many believe pensions are just too risky. They don't pay well unless you have 20 or more years with an employer. Many things can happen.

Also, many government and private pensions have gone belly up. Even if they are strong now, a new raider CEO can fix that within months of being hired.

Personally, I couldn't sleep with a majority of my nest egg in a pension. The 401k option gives me an easy way to gauge my savings and predict what I have and what I need.

But, on the flip side, they do offer a sweet benefit if you get one that pays off for life. It really depends on your situation and employer.
 
Stein said:
I was given the option of keeping the traditional pension (defined benefit) plan, or having an additional 4% deposited into my 401k (in addition to the match).

I chose the 401k route for a number of reasons.

1. I do not think there is a good chance I will retire from my current employer the way things are these days.

2. The 401k is guaranteed and cannot be revoked.

3. The pension can be scrapped, reduced, reworked, or go bankrupt at any time if you read the fine print.

I think for younger people, many believe pensions are just too risky. They don't pay well unless you have 20 or more years with an employer. Many things can happen.

Also, many government and private pensions have gone belly up. Even if they are strong now, a new raider CEO can fix that within months of being hired.

Personally, I couldn't sleep with a majority of my nest egg in a pension. The 401k option gives me an easy way to gauge my savings and predict what I have and what I need.

But, on the flip side, they do offer a sweet benefit if you get one that pays off for life. It really depends on your situation and employer.
All the above is why I am glad not to have a pension that I could have reduced or eliminated. I know how much I have.
 
Stein said:
I was given the option of keeping the traditional pension (defined benefit) plan, or having an additional 4% deposited into my 401k (in addition to the match).

I chose the 401k route for a number of reasons.

1. I do not think there is a good chance I will retire from my current employer the way things are these days.

2. The 401k is guaranteed and cannot be revoked.

3. The pension can be scrapped, reduced, reworked, or go bankrupt at any time if you read the fine print.

I think for younger people, many believe pensions are just too risky. They don't pay well unless you have 20 or more years with an employer. Many things can happen.

Also, many government and private pensions have gone belly up. Even if they are strong now, a new raider CEO can fix that within months of being hired.

Personally, I couldn't sleep with a majority of my nest egg in a pension. The 401k option gives me an easy way to gauge my savings and predict what I have and what I need.

But, on the flip side, they do offer a sweet benefit if you get one that pays off for life. It really depends on your situation and employer.

Considering what has happened to some major pensions in the last few years, you make very good points. Those company pensions are not as secure as they were once thought to be....

But, even with a 401K account, the companies' 401K rules may prevent the employee from fully managing their 401K account. I'm thinking of Enron rank and file employees who had Enron stock in their 401k accounts and did not have a clue as to what was going on at the top. Enron put a lockdown on the 401K accounts and did not permit rank and file employees to sell Enron stock while the company executives were allowed to sell. The rank and file employees could only watch as their account values plummeted. link to Enron story

There are a lot of companies which use company stock to pay the match on their 401K. The match can add up to some healthy amounts over time. The rules vary from company to company, but it is not unusal to have rules in place which prevents an employee from selling the company holdings while still employed with them. So, if the company goes bankrupt and the company stock becomes worthless you could be at risk for losing some of the 401K savings, too....

-DC :earsboy:
 
My DH retired from the Air Force after 20 yrs. at 38 yrs. old, and has had a monthly pension check since and will continue to until he dies (which better be after me, LOL!). We also contribute to a 401K through his second career job...unfortunately, other than these retirement preparations, we are poster children for stupid financial moves! :sad2: But we're trying to do better--thanks Budget Boarders for all the interesting and informative financial info and advice here! :goodvibes
 
401ks are safer than pensions, but they are not completely safe from being raided by the corporation. Its happened, and it can be a huge legal hassle to get your money, sometimes unsuccessful. You need the cooperation of your employer to have the money released to you (or at least, you often do, it may not be always). Also, Enron employees can tell how how corporate malfesence can affect your retirement, even in a 401k!

However, pensions don't belong to the individual. They are an asset of the corporation or the state, until they actually cut you a check. Hence, they are not safe from corporate malfesence or misfesence at all. In the case of Northwest Airlines employees, my understanding is that their pensions are gone - they've been turned over to the federal governments guarentee program. The government (assuming they maintain their committment) will pay those pensions, but at a reduced rate (my understanding is that people will get about 30% of what they thought they'd get). One of my accounting professors highly recommended that you treat the probablilty a pension sort of like you treat social security - it may be there, but it may not be. State and Federal pensions are seen as more secure, but one of my other professors was the lobbyist for our state's teachers pension fund, and they are needing to get the legislature to fund the teachers pension system, in Minneapolis it is bankrupt - and you can't get money from a bankrupt system. The legislature, he said, was not obligated to rescue the Minneapolis teacher's pension system (I believe they did for the next few years).

The safest option is to bury your money in your backyard during the dead of night, but unlike daylilies, unfortuantely, it doesn't grow back there and has no tax advantages.

What we do (with no pensions involved and at the advice of the Accounting prof's recommendation - his real job is as a CPA) is have 401ks through our companies, but when we switch employers, we don't roll to the new company- we roll to an IRA. This spreads our risk among a couple different retirement accounts and limits the exposure we have to the risk that our companies don't release the money.

Scary, isn't it.
 
My husband worked at the same company for 33 years...went into work at 6:00 a.m. one day and by 9:00 a.m., he was out of a job. Two weeks later, the company declared bankruptcy. DH was supposed to received a pension of around $1700.00 a month and filed for it immediately since he was over 55 and had over 30 years in the plan. We thought that we had it made.

We soon found out that the company had underfunded the pension by $145 million and since they went bankrupt, no more contributions would be going in. Fast forward, the pension was turned over to the PBGC (Pension Benefit Guaranty Company) and his benefit was reduced by 50% and there is no guarantee as to how long the pension will last since the PBGC is constantly getting company's pension plans (especially the airlines) so we could get the pension for 1 year or 5 years and that could be it.

Luckily, we had a 401(K) and I have a 403(B) plus Roth IRA's and regular IRA's to cushion the blow but it is just a shame what these companies are allowed to do to their employees. His plan was a defined benefit plan not a cash balance plan so there was no way that we could take a lump sum. My plan at work is a cash balance so I'll take my money and run and invest it myself.
 
georgina said:
I don't understand why you wouldn't want a pension. The pension is fully funded by the employer in our case. I don't see it as controlling our destiny at all. We contribute to 401k and IRA's and have savings. The extra dollars from a pension will be gravy on top of that, provided it is still there when DH retires. Plus he may have good retiree health care; he's been there 26 years so we're hoping that doesn't go away, they did cut it for new hires.

Well, I guess that the only thing about a pension is the fear that it may not be there. Many employers deduct a certain amount of your paycheck each week and apply that to your pension down the road. That, I would not like. I like to control my own destiny as much as I possibly can and not rely on others to make my investment choices for me.

And it's not just private pensions folding these days, there are also some public pension funds in trouble, and this is the first year that they need to report whether they are underfunded. That's not to say that all pension funds are in trouble, they aren't, but the problem is growing. I always think of the United airline pilots, who were supposed to get a little over 100K per year in retirement and ended up with about 30K a year.

Of course we all have to worry about big market dips with respect to our 401k, IRA and taxable retirement accounts, but at least I *know* that the money I originally put in there at least made it to the account. For years, corporations were able to play all kinds of games with pension funds, and they still do to a major degree. One of those games was to report that the funds were fully funded when in some cases they were underfunded by as much as 70%.
 
Sarah'sMomfrom PA said:
... but it is just a shame what these companies are allowed to do to their employees.

I agree, but having done some studying on this, I think that pensions folding is the predictable result from an ill thought out system.

1) Funding pensions is a highly complicated thing, you need to take into account how long you expect your employees to live, what your expected rate of return is. Pension fund managers weren't the only ones to fall for "the new economy" and say days of 12%+ returns were here forever. And its hard to predict how long people will live.

2) The model assumed "the corporation" was an unmovable object. But it isn't. Corporations have lives, like human beings do. And some companies die. And since the pensions are an asset of the corporation, they become subject to bankruptcy proceedings, in which a future promise to pay their employees is secondary to paying the bills they already have.

3) If you work for a company your whole working life (lets say from 20 to 65 - 35 years) and you live another 20 years, that is a long time in terms of history. A lot of things can happen during that period of time that can have positive or negative impact. I'm not real eager to promise I'll be able to give you $100 in 2061, although I may have that money in my pocket today. Maybe over that time I'll need to spend that $100 for my own survival. Which is what a lot of companies did when they raided their pensions.

In the case of Northwest Airlines, I'm as upset at Union management as I am at the execs who and got paid huge salaries to run the company into the ground. The Union should have demanded conversion to 401ks twenty years ago - because this problem was evident for Northwest that long ago. The purpose of Unions is supposed to be to protect the interests of the workers, and I think they really did their membership a disservice.

Now, there are other problems in Corporate America. Raiding pensions and paying executives millions of dollars a year is unforgivable. But that has just hastened the demise of some of these companies - not kept them from being healthy.
 
crzy4dsny said:
The one good thing about my job, NYPD, is the pension. 20 years and out. Half pay plus a $12,000 variable supplement. Your pension is based on your last few years of service. So if you can knock out a ton of overtime you can do ok. I'll be 42 years old when I "retire".

DH and I have the same thing as firefighters in NH. You can retire after 20 years, at age 45, and you get 66% of your best three years. Plus health insurance. Much as the pay may not be the greatest, the benefits are definitely worth it.

Jen
 

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