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... apart from portability, this is was the major reason why I never went into the state's pension system when joining the university. I don't trust government/political investment committees -- and besides, if I'm going to make or lose money, I want to be the one responsible for doing so, and that includes either avoiding questionable investments or being able to get out quickly when I want to.
Thanks for posting. I have always thought that retired folks with pensions lived in another universe compared to the rest of us. I wonder if most pension recipients pay much attention to what is going on behind the scenes at their fund?
A lot of things don’t work as well “by committee.” Learned that the hard way some 40+ years ago when a helpful neighbor and I nearly dropped a large tree onto my home while cutting it down. We ignored simple precautions like securing it to something with a line first. Each of us assumed the other one knew what he was doing rather than giving the job the careful consideration it deserved. Suspect to some degree that applies to investing.
this is was the major reason why I never went into the state's pension system when joining the university. I don't trust government/political investment committees
From the article:
Large public pension funds have an average 14% of their assets in private equity, while large corporate pensions have almost 13% in private equity and other illiquid assets such as private loans and infrastructure, according to data from Boston College and JPMorgan Chase.
Perhaps it is your second reason for not opting into a pension fund (public or private) that is more significant:
if I'm going to make or lose money, I want to be the one responsible for doing so
What does it matter guys if one has a gov't pension?
Next door neighbor retired grade school teacher..wonderful and spunky gal...her deal is her deal, props to her, she was completely dedicated to educating the youngsters. There is no crying in baseball..
However, bullet proof. Guaranteed payout by state law. No matter if stock market draws down by over 50% ...she is going to get her monthly payment no matter what.
Tax payers on the hook for all of it. Period.
Folks bailing out of state in droves, soon as the kids get out of high school and if their job is portable/remote and/or retirement...adios.
Property taxes went up for most at least +20%, many +25-30%...
It's all a Ponzi, all based on bullshit numbers....what is really behind the curtain, don't look, you might not like what you see.
Thanks for posting. I have always thought that retired folks with pensions lived in another universe compared to the rest of us. I wonder if most pension recipients pay much attention to what is going on behind the scenes at their fund?
Me and the missus had a combined three Defined Benefit Pension plans but I guess I never thought we "lived in another universe!"
We rolled the lump sum of the biggest to an IRA, and we were able to roll about half of another to an IRA. So in force, that is, monthly pension payments, we effectively have about 1 1/2 of the original three, one private and one government.
Of those, yes, I (at minimum) annually review their Actuarial Reports. Kinda know my way around them a bit as I used to perform limited scope audits of my company's and some client's Actuarial Reports when working "in another universe!" Happy to say that in 12 years of collecting pension payments, funding of both has never been a concern, to me at least.
@stillers. Perhaps another universe is oddly phrased, but my financial life would be entirely different if I had a pension check roll in every month. Many decisions would be looked at differently.
Last I checked, social security checks have never been affected by the markets either.
Most individuals with good pensions have low monthly social security income because they never paid in to social security. The pension income offsets their social security, often times to where social security for them is almost nothing even if they had any jobs that paid into social security.
My wife worked 14 years for our county and upon reaching age 62 her monthly pension benefit will be $512...we're rich! And will be living a life of leisure on our super yacht!
Like almost everything else, it’s best not to generalize about pensions. My wife and I both have pensions with the state of North Carolina. It is very conservatively managed, although I’m sure it has some private equity. The pension is funded roughly half from employees paychecks and the rest from the state legislature. The state also has an optional 401k plan, but does not contribute to that except for state troopers. Unlike Social Security, the NC pension has no automatic inflation adjustments. I have been retired 7 years and my wife 9 years, and we have not received any inflation increases, although the legislature has awarded a few one-time bonuses some years. So, for those people whining about fat government pensions, that certainly isn’t true for NC. I would wager that most private workers with 401k plans have more generous retirement plans than NC government employees. The NC pension plan is essentially an annuity with no inflation adjustments. Fortunately, my wife and I both voluntarily contributed to the state 401k plan, which provides our inflation adjustment— again with no contributions from state taxpayers.
I spent years in what SS calls "non-covered" jobs. WTF is THAT? It means you did not pay in. That's junk. I've ALWAYS paid in. Finally, I was asked to come in, in person, with last 2 tax returns. My SS monthly jumped from $700+ to $1,200.00. That was pre-Medicare.
Retired early, pension started lower than it would otherwise. But it is very prudently managed. I'll get a raise of 4.5% in July along with everyone else. Active workers will be given a 4.5% bump-up in "pension credits." They do that mid-year, rather than January. Silly. But I'm glad for it.
I'm a bit older than you- in my day it was the Germans...
At least it wasn't the Huns (WWI)!
My dad heard all about the Huns when he was going to high school in the 30's. Dad didn't have avocado toast, but there was swing, and talking movies, and who knows what else, turning them into good-for-nothing punks.
@stillers. Perhaps another universe is oddly phrased, but my financial life would be entirely different if I had a pension check roll in every month. Many decisions would be looked at differently.
Oh, now I get it! And agreed, our collective SS and Pension incomes result in negligible, if any in some years, annual income gap. Makes a world of difference in all of our financial and investment decisions. We played it close to the vest in our first five years of retirement, but have swung for the fences in our last seven. To our credit though, we started planning for our retirements and this very situation on Day 1 of our first professional jobs in 1980. Well, I did at least. The missus got on board a wee bit later!
Hard to generalize about state pensions. My sister in Texas is in similar shape as you.
But if you had worked in CT you would get traditional 60 to 70% of “high three average” ( go overtime go) with inflation adjustments AND lifetime health insurance for you and ur spouse.
Vests ( including health insurance) After ten years of employment. So work ten years ie 22 to 32 yo and enjoy health insurance till 100!
Comments
From the article: Perhaps it is your second reason for not opting into a pension fund (public or private) that is more significant:
if I'm going to make or lose money, I want to be the one responsible for doing so
Next door neighbor retired grade school teacher..wonderful and spunky gal...her deal is her deal, props to her, she was completely dedicated to educating the youngsters. There is no crying in baseball..
However, bullet proof. Guaranteed payout by state law. No matter if stock market draws down by over 50% ...she is going to get her monthly payment no matter what.
Tax payers on the hook for all of it. Period.
Folks bailing out of state in droves, soon as the kids get out of high school and if their job is portable/remote and/or retirement...adios.
Property taxes went up for most at least +20%, many +25-30%...
It's all a Ponzi, all based on bullshit numbers....what is really behind the curtain, don't look, you might not like what you see.
We rolled the lump sum of the biggest to an IRA, and we were able to roll about half of another to an IRA. So in force, that is, monthly pension payments, we effectively have about 1 1/2 of the original three, one private and one government.
Of those, yes, I (at minimum) annually review their Actuarial Reports. Kinda know my way around them a bit as I used to perform limited scope audits of my company's and some client's Actuarial Reports when working "in another universe!" Happy to say that in 12 years of collecting pension payments, funding of both has never been a concern, to me at least.
Most individuals with good pensions have low monthly social security income because they never paid in to social security. The pension income offsets their social security, often times to where social security for them is almost nothing even if they had any jobs that paid into social security.
Many many retired government employees are receiving much more in monthly pension payments.
No comparison
Retired early, pension started lower than it would otherwise. But it is very prudently managed. I'll get a raise of 4.5% in July along with everyone else. Active workers will be given a 4.5% bump-up in "pension credits." They do that mid-year, rather than January. Silly. But I'm glad for it.
I now return this channel to its regular programming.
It got better in high school when we spent more time playing sports than practicing exercises the Soviets were supposedly better at than we were.
But many people have found defined-contribution (DC) plans to be problematic too.
Industry response is the new guaranteed-income or lifetime-income features within 401k. Such features have existed for 403b for years.
Old name for these is annuities but that tainted term is now avoided.
Let's see what Blackrock marketing can do that TIAA & others couldn't.
Love it. See George Carlin's bit on euphemisms (shell shock)
Defined-benefit (DB) pensions have gone away except for some federal & state employees.
It certainly seems that way, but according to the latest BLS statistics, 15% of private industry workers have access to DB plans. More like an endangered species than extinct.
https://www.bls.gov/opub/ted/2024/15-percent-of-private-industry-workers-had-access-to-a-defined-benefit-retirement-plan.htm
This George Carlin act was very amusing.
Thanks for sharing!
https://www.cnn.com/2023/09/07/success/pensions-retirement-savings-explained/index.html
https://www.investopedia.com/articles/retirement/06/demiseofdbplan.asp#:~:text=Key Takeaways,to manage than pension plans.
https://www.the-ifw.com/retirement/why-did-pensions-go-away/#:~:text=In the 1980s, the United,voluntary contributions towards retirement plans.
And agreed, our collective SS and Pension incomes result in negligible, if any in some years, annual income gap. Makes a world of difference in all of our financial and investment decisions. We played it close to the vest in our first five years of retirement, but have swung for the fences in our last seven. To our credit though, we started planning for our retirements and this very situation on Day 1 of our first professional jobs in 1980. Well, I did at least. The missus got on board a wee bit later!
Hard to generalize about state pensions. My sister in Texas is in similar shape as you.
But if you had worked in CT you would get traditional 60 to 70% of “high three average” ( go overtime go) with inflation adjustments AND lifetime health insurance for you and ur spouse.
Vests ( including health insurance) After ten years of employment. So work ten years ie 22 to 32 yo and enjoy health insurance till 100!