Here in the state of Illinois, it seems that the practice of amassing multiple public pensions may have reached its epitome - in addition to what many consider to be excessive pensions vested too quickly. To me, the practice strikes me as somewhat unseemly profiting from public service. I don’t think people should be punished for or dissuaded from public service, but nor do I think it should be a route towards undue enrichment.
What would be the downsides of limiting an individual’s ability to receive multiple public pensions - whether federal, state, or local? If you are eligible for multiple pensions, you have to pick one among them - perhaps with your total service credited towards the pension you choose.
If you earn it, it should be yours. Serve 30 years in the military, and then 20 as a teacher? You should get two public pensions. Why is this an issue?
Two problems come up with double-dipping in public pensions. The first one isn’t really a double-dipping issue, it’s just that the payout to contribution ratio can be way too high in public pensions. That problem can exist whether one or two pensions are being collected. The second problem is of more concern, the second public sector job is denying someone else an opportunity for a public sector position. It’s not a competitive marketplace, the number of jobs are limited by the public’s ability to pay for them, and it doesn’t serve the public in general to have a limited pool of people cashing in on the jobs available. Neither of these issues should get in the way of the principle of earning a pension, if the work is performed then a public employee is entitled to the same benefits as any other public employee in that position. The changes that need to be made are to get the pension benefits in line with the market at large, and to give some priority to hiring new public service employees to give the public the advantage of maintaining employment for the most number of people instead of allowing it concentrate in a few. The first part is simply a political problem, private sector retirement benefits have changed over the last half-century, much of it is now based on retirement savings such as 401K plans where there is no guaranteed employer contribution and employees contribute their own earnings with some tax savings. The public and private plans have to correspond better, in the current status quo that would mean less guarantees for public employees. The second part is more difficult, experienced public sector employees can be valuable, just as in any employment. It can at times be difficult for public sector employees to move into the private sector, especially at age 50 and older where even in the private sector gaining employment becomes more difficult. It will be difficult to establish a policy that discriminates against former public employees filling open positions. Some of the problem there can be a result of nepotism and other favoritism, but whatever the cause there must be a clear mandate to maximize new public sector employees to spread the benefit of public sector employment among the most people.
Yep. I dont see the issue. Now there can be a issue if Politicos vote themselves a full pension after a short term. But then it’s not the issue with two pensions, the issue is a un-earned pension.
You could have gotten into Public service or one of the few but not rare private companies that pay pensions.
I worked for 20 years getting paid 30% under market to earn my tiny govt pension.
OK, guess it is not perceived as a significant issue.
I agree that many other aspects of public pensions/funding would likely be more meaningful.
IMHO (am I in the wrong forum? ;)) there is just something “unseemly” about collecting two public pensions. Not sure it is significant enough to require a policy change.
I’m 56, and have 30+ years into a federal agency. Fully vested and eligible for retirement. I guess I could look to another government job with a limited time for vesting in a second pension. In my situation, however, I’d probably be taking a pay cut, so the eventual gain in a second pension would be offset by reduced earnings in the years before I got there.
The types of situations that seem to make the news often involve relatively high level positions where employees vest incredibly quickly. School superintendents, for example. Another factor is that veterans often get priority for hiring by other agencies.
IMO, public employment should not entail a vow of poverty. But nor should it excessively enrich a limited few.
And no, I don’t have data. Wasn’t aware that was a prerequisite for GD, nor was I making any claims as to the magnitude of any “problem” or any expected savings.
I think veterans preference in hiring for government jobs needs to be re-examined. The person who did some years in the military isn’t necessarily better qualified for a job because of that military service. It can be spun, I guess, as one of the benefits of military service. The thing is that many people try to enlist in the military and are turned away for one reason or another. These people may be perfectly well qualified for other public service employment, but are given hind tit to military vets who may actually be less suited to the job.
When I worked in public safety I’d occasionally encounter people who revealed they had multiple pensions. What I thought was sketchy (but kept it to myself) was collecting on a pension (or two) while at the same time employed in a full time job with benefits. Seems to me that they should either work or collect the pensions, but not both.
It is impossible to debate something if we don’t know anything about it. If there is actual enrichment, then show us the enrichment. I expect most people don’t like undue enrichment. But the number of pensions is immaterial for the pensions I have experience with, because they scale roughly linearly with years worked. If the ones you have in mind work differently, let’s see how they work.
I am collecting a pension for having been a public school teacher in PA. The way the system is set up, I can get a job doing anything I want, except teaching, and the pension checks will still arrive. Seems fair to me. You are either a retired teacher or you are not. You don’t get to collect a retirement pension AND teach full time too. This includes teaching in other states. You can, if you’re stupid or desperate enough, do a limited amount of subbing.
Just curious, do you start drawing your pension when you retire, or do you need to wait?
I’m pretty sure that although I am eligible for full retirement today at age 56, if I chose to stop working now, I wouldn’t start drawing checks until sometime in my 60s - minimum Soc Sec age I believe.
Er, what? Who would be on the hook for a 50 year service time pension? The military would pay a 30 year service time pension, and the school system would pay a 20 year service time pension, as per the contracted benefit earned.
I think this was in reply to this suggestion at the end of the OP:
So if our soldier/teacher was able to choose to credit his army years to the school pension, or his school years to the army pension, then one pension fund is “on the hook” for the full 50 years.
If you had a private employer with a SIMPLE IRA, another employer with a 401k, and still another employer who provided a completely different retirement benefit, do you feel that you should be required to choose just one of those, perhaps with that employer being required to pick up the entire tab?
If not, then what is different about a public employee from a private employee, in that they can only use the retirement benefits they received from one job for part of their career?
If you have a 401k from the private sector, can you use that as well as a pension from a public job, or do you have to choose one or the other on that as well?
If your complaint is that pensions are too generous, let’s look at numbers and compare the retirement benefit accrued for similar professionals in the private market. You may end up finding that the pension is overly generous, and could be reduced a bit in the future. You will probably, however, find that the private sector is much more generous in its retirement benefits for a similar employee performing similar job functions.
You might have to-but you should check. Because although I am not a Fed, I can collect my pension at 55 with no reduction as long as I have 30 years of service. I would of course still have to wait till 60 whatever to collect social security.
I do not have a problem with people collecting two different public sector pensions, in large part because each pension system is different and because there is not a system where service credit in any public pension system can be transferred to any other.
I can actually transfer my service credit between the NYC and NYS employees retirement systems - but as a general rule, for people with a significant amount of pension credit the transfers only go one way. Why? Because the state system allows members in my tier to retire at 55 without a penalty after 30 years, while the city system requires a members in my tier to be 62 with 30 years to collect without penalty. Why should I be forced to transfer my membership to the system that makes me wait longer to collect if I leave my state job at 52 with 30 years service to go to a city job? Most public and other pensions I am familiar with do not provide a high benefit for someone with only ten or so years of service, and in fact depending on how the pension is calculated, 3 pensions with ten years service each is likely to be less than one thirty year pension, so it’s not really a matter of someone getting rich. For example, after 30 years, my pension will be 60% of my pay ( 2% x years). After 10 years, it would only be 16.6% of my salary (1.66 per year). Assuming the same earning history, if I have 10 years in each of three plans at the latter rate, I actually collect 10% less than if I had a single 30 year pension.
Are there provisions that are too generous?- yes. There are systems where a retiree can get a waiver and go back to the very same employer while still collecting the pension. That’s ridiculous. There are systems ( usually I’ve noticed this in education) where people can save their sick leave for years , get paid for all of the accrued leave at retirement and inflate the final salary the pension was based on. Also ridiculous. But those provisions are specific to those systems and don’t apply to public pensions in general.
Getting a 20 year military pension and then a 20 year state government pension is not really that much different than getting a single pension after 40 years of public employment - and no one objects to that.
I sort of assumed this is how it would work. Even if it doesn’t though, I’m at a loss to explain the prevalent attitude in this thread.
A pension is essentially deferred salary, with conditions attached that are spelled out in the employment contract. Why on earth would it be wrong to draw multiple pensions assuming the contracts agreed upon by everyone allowed it? What if you worked for 10 different places for four years each, with all 10 pensions combined being worth the same as one 40 year one? Are we seriously claiming that person should only pick one pension worth one tenth as what the other person gets?
Either way, it should all be in the contract. I’ve accumulated 401ks from all of my employers, along with matching. I’m not expecting to have to pick one of them to keep when I retire.
The general rule is your pension is only based on the number of years you worked for that organization.
Take me as an example. I worked twenty-seven years for the state of New York. If I then had taken a job with the post office, my years of working for New York would not have been applied to my federal pension; that pension would only be based on the number of years I worked for the federal government. If I had worked for the post office for thirteen years, I would be collecting a thirteen year federal pension and a twenty-seven year state pension. I would not be collecting a forty-year pension from either of my jobs.