Saturday, March 15, 2014

The civil servant will never have much...

Unless he stays on for thirty years...and he will still have it for sure. Andrew Biggs details how to become a pension millionaire;
...the American Federation of State, County and Municipal Employees (Afscme) declares that public pensions are "modest," noting that its average member "receives a pension of approximately $19,000 per year after a career of public service."
....It is true that average public-pension benefits rarely seem extravagant. But these averages are reduced by two groups: older employees who retired many years ago and whose benefits are far less than those of an employee retiring today; and by short-term workers who often receive tiny pensions....
Now, let's get serious;
Unions claim that no one works for government to get rich, but many public employees become "pension millionaires" along the way. In Nevada, an average full-career state worker can expect to receive $1.3 million in lifetime pension benefits. Alaska, California, Colorado and Oregon all pay lifetime benefits exceeding $1.2 million. A wealthy, high-cost-of-living state such as Connecticut offers more than $1 million in average lifetime benefits to full-career employees who retire today; so does a relatively low-cost state such as West Virginia.
According to the Social Security Administration, financial advisers recommend a retirement income equal to 70% of pre-retirement pay. But 30 states pay replacement rates above 85%, and in five states—Oregon, California, Texas, New Mexico and West Virginia—an average full-career employee retiring today receives a retirement income higher than his final salary. 
And many of those retirees are in their 50s who go on to other employment while collecting their pensions from taxpayers. We await word from the inequality-phobes on this.

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