Pensions, Social Security, 401/403 plans

[starry_solo]

Many government employees pay into social security .

 

[Alexle2007]

DH receives a pension (not a government employee). So why did he have to pay into Social Security? Sorry, I'm just being grumpy because I don't understand how the government can exempt itself from a retirement system that it forces everyone else to pay into, including those private employees who will be getting a pension.

Before 1987, the federal government had its own retirement system known as CSRS (Civil service retirement system). The employees who were and still are under that system did/do not pay into SS. Then we moved to FERS (federal employees retirement system) and federal employees started contributing to SS. Additionally, that’s when TSP (thrift savings plan) came in as a component of that retirement. TSP is like a 401k. We can contribute up to 18k a year and we receive up to a 5% match. Besides some old timers, the majority of federal employees do now contribute.

 

[smiths02]

DH receives a pension (not a government employee). So why did he have to pay into Social Security? Sorry, I'm just being grumpy because I don't understand how the government can exempt itself from a retirement system that it forces everyone else to pay into, including those private employees who will be getting a pension.

But he will receive SS and his pension when he retires.

The government employees who do not pay the same into SS are paying into a government backed pension program-the pension isn't just a free benefit-money is removed every month from the paycheck. They will often not receive SS or receive a reduced amount of SS. They also generally have to pay their own private disability insurance because they would not qualify for SSDI if disabled.

Also, it's not like most of the beneficiaries of this program are high level politicians...you are talking about teachers, firefighters, police, etc.

 

[HeatherC]

Massachusetts teachers don't pay into SS. They pay directly into the state fund which is mandatory for every employee.

 

[HeatherC]

Leebee...I am not sure and would definitely check, but I don't think you would be eligible for a full teachers pension if you were only in the system for nine years. The money you paid is certainly yours and should be able to be rolled over into an IRA or something. I would suggest also contacting your states office for teachers and asking more specifically about this.

I substitute teach in Massachusetts and also pay into the state teachers fund which is mandatory. However, I have enough credits with social security to collect when I turn 62. The money that is in the teachers fund is minimal and I will just leave that there until we actually do retire. My dh works for a town and doesn't pay into SS either, but has a terrific pension plan that he is vested in and is luckily enough one of the few that are fully funded.

 

[kymom99]

But he will receive SS and his pension when he retires.

The government employees who do not pay the same into SS are paying into a government backed pension program-the pension isn't just a free benefit-money is removed every month from the paycheck. They will often not receive SS or receive a reduced amount of SS. They also generally have to pay their own private disability insurance because they would not qualify for SSDI if disabled.

Also, it's not like most of the beneficiaries of this program are high level politicians...you are talking about teachers, firefighters, police, etc.

That's the case here. We pay 12-13% into the teacher retirement system. I will not receive my husband's SS if he does before me.

 

[dcfromva]

DH receives a pension (not a government employee). So why did he have to pay into Social Security? Sorry, I'm just being grumpy because I don't understand how the government can exempt itself from a retirement system that it forces everyone else to pay into, including those private employees who will be getting a pension.

In the case of the Federal Govt, the CSRS retirement system came first (effective on August 1, 1920) and was in place prior to August 14, 1935, when the Social Security Act became law. Some of the elements of CSRS were incorporated into the SSA.
Here is an interesting link when CSRS was replaced by FERS (FERS=the new govt retirement system which incorporates SSA). https://www.ssa.gov/policy/docs/ssb/v49n11/v49n11p5.pdf