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Stephen Jones

Comparing Benefits / Retirement / Pension Plans

Hey guys, I was just curious to compare Benefits / retirement / pension plans.

I'm currently a Gov. Employee and the following is our pension plan. And by no means am I trying to brag. I started working in Gov. when I was 21 and did purchase 5 years.


- @ 30 years of service I can retire at any age with approx. 75% of my highest 3 years of income for life.

- Employers pay pension, not 1 cent of my own money goes into my pension

- Can purchase up to 5 years, which on avg. is about 1/3 of your annual income per year. The younger / lower your income the better.

- Certain wage schedule, some people qualify for 100% Tax Deferred Comp match up to $6000/year.

- 4 day work weeks

- Paid sick leave of 1 day / month

- Paid Vacations of
  9.5 hr per month for years 1-6
  12.67 hr per month 6-12
  15.83 hr per month 12+

- Medical, Dental, Vision, Long Term Disability, $50,000 Life on employee

- Tuition Reimbursement

- No SSN Tax

- Est. of 3% per year Cost of Living increase

- 5% merit Pay increase per year, Sr. Developers top out at $96K / year. Takes about 9 years to top out.
Peter Send private email
Thursday, May 10, 2007
 
 
In the US, IIRC, *everyone* pays SS taxes unless a) they're under the old civil service plan which they stopped allowing signups 20+ years ago or b) they're in Galveston, TX.  Of course, you only pay on the first $90k or so that you earn.

Also, this is why they don't let people into the old pension plan anymore...  25 (or 30) years of service and you make 75% of your earnings for the rest of your life...
KC Send private email
Thursday, May 10, 2007
 
 
Well, I can't compete with the government, but our retirement plan here is a big draw.

I pay 5% of my salary, company pays 10% of my salary, into a retirement plan.  I can contribute more, but the company won't pitch in more.  Still, 10% is better than most places.
D.W. Send private email
Thursday, May 10, 2007
 
 
Peter, if you're looking for confirmation that you have fabulous benefits then you've got it from me.  I doubt there are any comparable plans in the private sector.
Vince Send private email
Thursday, May 10, 2007
 
 
o  8% 401K match
o  No pension
o  4 weeks vacation a year
o  Call in sick if needed
o  Standard health benefits with copays and monthly cost
o  No tuition reimburse - effectively has been dropped
o  No raise in past 4 years but current pay is good
o  Large I/T Company
anonymous
Thursday, May 10, 2007
 
 
I hate you.
OneMist8k
Thursday, May 10, 2007
 
 
Great benefits, but at a cost.  ie: The downside is your salary.  Topping out at $96k after how many years?  Working "cheap" until you top out, and even after you top. 

Also, do not overlook the future value of excess salary earned today.  10 years of taking home an extra $50k would fund your own pension.  (picked those numbers from thin air, feel free to build a model and share)

ie: You could be making $150k-$200k in the private sector.  Maybe more once you hit mgmt.  VP, SVP, Director, MD, etc.  To boot, as a consultant, a good chunk of that $150k-$200k is offset my expenses.
Bella
Thursday, May 10, 2007
 
 
Government has got to have something going for it, apart from the unlikelihood of being made redundant!

I'd like to know how you got the four day work weeks by the way!

The holiday entitlements are pretty awful by non-US standards though.
Stephen Jones Send private email
Thursday, May 10, 2007
 
 
- 5 weeks of vacation per year (6 @ 15 years of service)
- 2 weeks of sick leave per year, which can be carried over indefinitely and used to retire early
- 60% of the average of my "top three" @30
- Free tuition remission for my immediate family, which will save me well over $400K by the time that I get all of my children through college
- Matched 401K (match differs each year)
- Medical, dental, and life insurance
- 40 hour work week
- Non-stock market-driven, fairly recession-proof employment
- Not required to learn the language/tool du jour in order to stay employed
- Laid-back, academic environment
- More interesting work than is available in the private sector
- Zero travel and no weekend/night work
UE
Thursday, May 10, 2007
 
 
My dad has a similar plan. He also works for the government.

Thursday, May 10, 2007
 
 
"ie: You could be making $150k-$200k in the private sector.  Maybe more once you hit mgmt.  VP, SVP, Director, MD, etc. "

Majority of people do not hit mgmt. It is mathamtically impossible. Only around 5% of a company is overhead (management) in a efficient company.

Thursday, May 10, 2007
 
 
"Majority of people do not hit mgmt. It is mathamtically impossible. Only around 5% of a company is overhead (management) in a efficient company."

You have hit on a fallacy that most young people believe to be true.  Most "Baby Boomers" never made it into management (i.e., they either left the field of their own free will or were forced out of the industry during the recessions of 1990 and 2001).  In fact, one has a greater chance being forced out of this industry than they do of making it into management.  Management is about politics and working the "old boy" network--something that most technical people cannot or will not do!

Thursday, May 10, 2007
 
 
KC> "In the US, IIRC, *everyone* pays SS taxes"

http://www.ssa.gov/retire2/fedgovees.htm
"If you worked for a Federal agency during these years, you did not pay Social Security tax on your earnings .... If you stayed under the CSRS program after 1983, you still are not covered by Social Security"

http://www.ssa.gov/retire2/stateandlocal.htm
"If you are covered only by your state or local pension plan, you don't pay Social Security taxes"

4 days a week is pretty good, as is the matching bit. i'm gov't and i'm similar benefits though less salary.
maybe
Thursday, May 10, 2007
 
 
Thanks for the fast repsonses guys/gals.

To answer a few of your questions:

  KC: In the US, IIRC, *everyone* pays SS taxes.

  Answer: I live in the US, and today is my payday friday (Thurs) and I'm here with my paycheck and the only taxes that I pay is:
Fed Withholdng
Fed MED/EE

My employers pays:
Medical
Life
Vantage Care
Pension
Workman's Compensation

Bella:  I would say that its' pretty hard to make $150-$200k. I haven't seem too many jobs in IT who make that much, but of course their always expections. I do agree that with an extra $50K a year into Stocks, MF, etc. would set you a very nice nest egg.

UE:
Free Tuition remission for immediate family is awesome!
Peter Send private email
Thursday, May 10, 2007
 
 
It would be interesting (in order to do an apples vs. apples sort of thing) to work out the present value that a series of pension benefits is worth.

I think that the last time I spent a couple of minutes with an annuity calculator (and using a typical kind of payoff of 4.5% or so on a lump sum) that a LEO salary (in CA, they immediately get 90% after 30 years) was close to doubled by the value of a pension.

I'm starting to have a feeling that nearly all of the people left in the middle class in a couple of decades will be the iron rice bowl types.
old.fart
Thursday, May 10, 2007
 
 
"Management is about politics and working the "old boy" network--something that most technical people cannot or will not do!"

Actually, I totally agree with you.

You rise to your level of incompetence. Most IT people are in the correct position already so they'll never move up.

Thursday, May 10, 2007
 
 
"I'm starting to have a feeling that nearly all of the people left in the middle class in a couple of decades will be the iron rice bowl types."

Bingo. In the latest salary data from NZ. Gov worker's wage rise was 3.7% vs 3.1% for the private sector.


It's either unionize or die.

Thursday, May 10, 2007
 
 
Wow... you guys really proved me wrong there... Under the old Civil Service plan and some localities didn't have to pay SS.  But, I think I've read that somewhere before.  Oh wait:

"In the US, IIRC, *everyone* pays SS taxes unless a) they're under the old civil service plan which they stopped allowing signups 20+ years ago or b) they're in Galveston, TX.  Of course, you only pay on the first $90k or so that you earn."

Before you attempt to refute someone, please read what they actually said.  Point taken that Galveston, TX is not the only locality without SS payments... but it does happen to be the most widely covered.
KC Send private email
Friday, May 11, 2007
 
 
That bit about Galveston County is kind of cool (and totally unknown to me), between their voting out SS and being willing to elect Ron Paul it sounds like an interesting place.

It strikes me that one thing that you get rid of when you have a non-SS based pension plan is that you slough off the welfare aspects to it...ie. people who put in unsufficient money, death benefits, etc.
old.fart
Friday, May 11, 2007
 
 
All state of Colorado employees, including teachers, pay into the PERA retirement program and do not pay Social Security taxes.  My understanding is that Federal workers have a similar plan.  I don't think this is rare as was implied earlier.
Vince Send private email
Friday, May 11, 2007
 
 
They benefits and pension of a government or university job are pretty killer, no doubt about it.  It is, withough question, one of the best reasons to do government work (along with the job stability).  It does come with a price, though.

First, if you are making *much* less money in the government job, you may lose out.  A pension that would pay 75% of your salary is great, but say you work for 20 years at 150K instead of 100K, and invest the difference.  You probably would come out wealthier in the end.  That said, I believe that many of the people I met while working one of these jobs wouldn't have been able to earn their salaries in the private sector.  In fact, they might have had trouble finding employment at all.  So no question about it, they were getting a sweet deal.  The people getting the lousy deal are the talented ones who could make more outside, and have to pick up the slack on the inside. 

Second - and this is what drove me out of the government job - I found the environment depressing.  So many people in a big, bureaucratic environment had gone flat, and were waiting arounf for another 16 years to collect their pensions.  I decided that it made no sense to stay for 10 years and then leave - that's the worst of both worlds.  Either do it whole hog and get the great pension, or get out while you're young before you've invested heavily in the system. 

But it depends, of course.  My father has been a university professor (of Medicine) for about 30 years.  He got to do extremely interesting and rewarding work, drew a fine salary, and will have a good pension.  His buddies who went into private practice, of course, made so much money that the university pension is a bit of a joke, though.  That's medicine, not programming, though - and private practice MD's in the 70s and 80s cleaned up before managed care came along.
Geoff B
Friday, May 11, 2007
 
 
California public school teachers do not pay into social security.  They pay into their own plan.
OneMist8k
Friday, May 11, 2007
 
 
<slightly off-topic>

The weird thing about Social Security (SS) is that it was not designed to be a retirement plan.  It was originally created as a social safety net to ensure that old people did not die in the streets.  The original contribution to the plan was 2% of one's payroll wages (FICA is a payroll tax, not an income tax), which was split between the employer and employee. Over the years, the program has been modified to handle a plethora of social needs, and the tax has been jacked up to the current rate of 12.4%, which is also split between the employer and employee with the self-employed paying both halves (see http://www.ssa.gov/OACT/ProgData/taxRates.html).

The truly crazy thing about the current state of the SS program is that a large proper subset of current SS recipients also receives disbursements from defined-benefit pension plans. As these plans went the way of the dodo bird during the "Baby Boomer" years (do, in most part, to union busting) and the massive FICA surplus (>$4T) created by this generation was commingled with general revenues to offset the massive deficits created by "supply-side" taxation under the Reagan and Bush II presidencies (the commingling actually started under Johnson to hide the true cost of the Vietnam War, but Reagan’s supply-side tax cuts were deep and deficit spending was so high that congress had to jack up the FICA tax rate in order to cover the losses in general revenues), I believe that we will see geriatric poverty rise to an unprecedented scale over the next twenty or so years.  While many boomers failed to save enough for retirement because they either did not earn enough or were covered by now defunct defined-benefit pension plans during the early years of their of careers, many of those who did manage to put away a sizable nest egg saw a large portion of it evaporate during the collapse of the dotcoms. 

As there are over seventy million boomers, this country is in for a very rough ride. Not only will the boomers be a massive drain on an already overextended government, the sell-off of their securities and other assets is going to take its toll on the markets.  One might ask the question were has all of this money gone?  It does not take very long to find the answer; namely, the top one-half of the top one percent.  No other group has benefited as much from supply-side taxation and union busting as has this very fortunate group of Americans. 

</slightly off-topic>
A Concerned American Software Developer
Friday, May 11, 2007
 
 
start-up gov't contractor - Huntsville,Alabama--

--3 weeks of paid leave + all paid gov't holidays 
  including 5 days "around" Christmas, not including 
  Christmas Day or New Years Day. for example this year 
  Dec 21st all the way to Jan 2nd until i go back. Also if 
  you work any of the gov't holidays like memorial day, 
  veterans day etc etc then you use that day later on how 
  you want to. paid leave goes up to 4 weeks in 1 year and 
  5 weeks after 3 years. i have only been there for about 
  6 months

--all medical and dental paid for
--life insurance paid for
--flex-time, bi-weekly pay
--15%(of salary) once per year profit sharing 
  contribution(not match) that is distributed into my 401K 
  plan. i can also contribute what i want as long as i am 
  under the $15,500 limit for people under the age of 50.
--3% cost of living plus yearly merit raises, plus annual 
  bonuses depending on performance
gov't contractor
Friday, May 11, 2007
 
 
Actually, one small correction to the "history" above.  It came as a SCOTUS decision in '73(?) that it was unConstitutional (aka illegal) for the government to run an insurance program and could not "invest" funds for people and/or hold them in reserve.  This is why they started with the system of creating the Treasury promissary notes (aka "Social Security Trust Fund") where they sell a bond to themselves for amount and then sell the bond.  It's when the Feds try to cash in the bond that we're basically screwed.

This is why
*  the FDIC, PBGC, etc are all "independent" entities;
*  the "budget surpluses" during the 90's were misleading at best.  The "unaccounted liabilities" are huge and currently off the books.

We're heading towards an Enron/WorldCom-style meltdown...
KC Send private email
Friday, May 11, 2007
 
 
>>That said, I believe that many of the people I met while working one of these jobs wouldn't have been able to earn their salaries in the private sector.  In fact, they might have had trouble finding employment at all.  So no question about it, they were getting a sweet deal.  The people getting the lousy deal are the talented ones who could make more outside, and have to pick up the slack on the inside. 


You nailed it ....
Bella
Friday, May 11, 2007
 
 
Some government agencies and groups are essentially run as work programs.  There are people who shine, are doing amazing things, and sometimes get the credit they deserve.  There are others who make it their "job" to drink coffee.  I've had the pleasure to work with more of the first group than the second... but the second group is out there in force.

The funny thing is that if they were able to get rid of the people in the second group, they could probably pay the first group more and/or recruit more of them...
KC Send private email
Friday, May 11, 2007
 
 
Those who believe that they will have a sweet twenty-year ride in this profession are naive.  Trust me, I too used to believe that I was invincible at one time. Sooner or later you are going to make the fatal mistake of staying with a technology too long (or get mired down with some life-changing event such as raising a family).  Throw in a security-oriented spouse, and you will be on the fast track to a mediocre income.  It is very difficult to stay on top the technical heap for twenty years and have anything approaching a normal life.  I made it to forty years of age before I had a hiccup in my career, but that was because I did not marry until I was thirty-seven years of age. 

I will leave you with this information.  Less than one in five people lasts twenty years in this field.  If you are under twenty-five years of age, look to your left and right at work.  In five years, only two you will be left.  In ten years, only one of you will still be employed in the field.  The field of software engineering is a meat grinder that lays waste to even the best practitioners.
Older and Wiser
Friday, May 11, 2007
 
 
"In ten years, only one of you will still be employed in the field.  The field of software engineering is a meat grinder that lays waste to even the best practitioners."

Until you go into laying roof tiles or something afterwards for a lot less pay. You will be thinking...gee studying all of the time in an air conditioned environment beats this sh$t. This is before you stumble and stir up a hornet’s nest you were not aware of.

Wake up people. There are a lot of lousy jobs out there that are far worse in every way.
anon
Monday, May 14, 2007
 
 
I personally don't have a problem with Baby Boomers dying in the streets. They have screwed up this country worse than any previouse generation. I don't feel any need to give them any handouts.

The average 55 year old head of household has less than $50k in retirement savings. Boomer senior managers at most public companies have raided pension plans so many times that there will be no private pension plans left in the US in 10 years. (Think IBM).
I hope cat food tastes better that in looks for you.
Monday, May 14, 2007
 
 

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