# Pensions - maybe I'm just ignorant **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 16, 2018, 2:59pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033 "2018-10-16T14:59:17Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [October 18, 2018, 4:25pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/41 "2018-10-18T16:25:16Z")
> [@Voyager](#): > > A big negative of pensions is that they discourage job-hopping. They were good for when people often worked for one company most of their lives, like the Bell System or IBM. But given long vesting times, people who moved wound up losing most of their pension years, and 401-Ks whiich vest immediately or very quickly are much better for them. I remembers when people were let go after 19 years. 20 year vesting was a normal. But now by federal law a pension fund has to fully vest in 5 years. ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [October 18, 2018, 4:32pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/42 "2018-10-18T16:32:37Z")
> [@MandaJo](#): > > It’s worth noting that public sector employee pensions are often instead of, not in addition to, social security. > [@Quimby](#): > > . . . What? I have several friends and family members that work in the public sector and this isn’t true for any of them or anyone I have ever heard of. Maybe their pension effects the amount of their benefit, don’t know, but I never heard of anyone having to give up SS to get their pension. I can attest that the City of Stockton pays into CalPERS, but not into Social Security. A lot of execs work as consultants after retiring to qualify for SS, too. Stockton does pay into Medicare, so we get that. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [October 18, 2018, 4:43pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/43 "2018-10-18T16:43:52Z")
> [@MandaJo](#): > > It’s worth noting that public sector employee pensions are often instead of, not in addition to, social security. Before 1974 most government employees were not covered by SS and did not have to pay into SS. In California 7.5% of the pay was deducted from their pay and put into CalPers, and the state should have put a matching amount into PERs. around that time congress passed a law requiring new employees pay into the SS fund. New employees, I started August 1974, paid I believe 5.5% into CalPERs and SS. And at retirement the payout receives a small adjustment down because of SS. Existing employees were given a one time option to change to the new system or stay paying the same into only CalPERs. My wife went to work for the county office of education and paid into both CalPERs and SS and is receiving both checks now. My son now works for a government agency and pays into his state employee retirement system and SS. so fewer and fewer government employees are paying into both systems. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [October 18, 2018, 5:21pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/44 "2018-10-18T17:21:22Z")
> [@Quimby](#): > > What? I have several friends and family members that work in the public sector and this isn’t true for any of them or anyone I have ever heard of. Maybe their pension effects the amount of their benefit, don’t know, but I never heard of anyone having to give up SS to get their pension. This is absolutely true for teachers, at least in the states my wife has worked in - their pension is in place of SS, not along side it. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 18, 2018, 5:47pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/45 "2018-10-18T17:47:55Z")
The Ohio state teacher retirement system allows a choice of defined benefit or defined contribution plans. I don’t know which is more popular. And when I said that most employers of career employees offer pensions, what I should have said is that most offer retirement plans, which is not necessarily the same thing. One could certainly envision a job where the compensation package consists entirely of salary, with the employee being responsible for their own retirement savings, insurance, etc., but that’s not very popular. ---
**Author:** ![Quimby](https://avatars.discourse-cdn.com/v4/letter/q/22d042/32.png) [@Quimby](https://boards.straightdope.com/u/Quimby)\ **Post date:** [October 18, 2018, 5:49pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/46 "2018-10-18T17:49:48Z")
> [@Telemark](#): > > This is absolutely true for teachers, at least in the states my wife has worked in - their pension is in place of SS, not along side it. Wow I had no idea this was true and as I wrote know people of different levels and different positions in the public sector. It’s funny that it had not affected any of them (to my knowledge). ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [October 18, 2018, 6:47pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/47 "2018-10-18T18:47:13Z")
> [@Quimby](#): > > Wow I had no idea this was true and as I wrote know people of different levels and different positions in the public sector. It’s funny that it had not affected any of them (to my knowledge). It’s not universal, only covering 15 states. But that’s 40% of teachers since it includes a few big states. > **[Why More Than A Million Teachers Can't Use Social Security](https://www.npr.org/sections/ed/2018/04/20/602846417/why-more-than-a-million-teachers-cant-use-social-security)** > > About 40 percent of teachers live in places where their state or local pension is the only safety net they've got. > [@](#): > > “Fifteen states do not offer all of their teachers Social Security coverage,” Aldeman says, “and that means about 40 percent of the workforce is not covered.” > > Forty percent of all teachers. That’s more than a million educators, in Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island and Texas. > > Now, these teachers aren’t benefit-less. The law requires that states that opt out of Social Security give teachers a pension that is at least as generous. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [October 18, 2018, 6:51pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/48 "2018-10-18T18:51:55Z")
Out of curiosity, could those teachers pay their entire SS tax on their own, and THEN get SS benefits later? ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [October 18, 2018, 7:11pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/49 "2018-10-18T19:11:37Z")
> [@Quimby](#): > > What? I have several friends and family members that work in the public sector and this isn’t true for any of them or anyone I have ever heard of. Maybe their pension effects the amount of their benefit, don’t know, but I never heard of anyone having to give up SS to get their pension. You don’t “give up” Social Security. When you have such a job, you don’t pay into Social Security but into an alternative state pension plan. If you had a private sector job before getting such a job, which was subject to Social Security, you would collect SS on retirement based on those earnings. In addition, you would receive a state pension based on the time you worked under that system. I friend of mine works in a state university system and he told me he paid into this alternative system rather than Social Security. ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [October 18, 2018, 7:15pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/50 "2018-10-18T19:15:44Z")
> [@Slash1972](#): > > Out of curiosity, could those teachers pay their entire SS tax on their own, and THEN get SS benefits later? Why would they do that, when the state system is required to be at least as generous as SS? You pay both halves of SS if you are self-employed, as I am. I’m not sure how you could claim to be self-employed if you were receiving a paycheck from a state system. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [October 18, 2018, 7:22pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/51 "2018-10-18T19:22:44Z")
> [@Colibri](#): > > Why would they do that, when the state system is required to be at least as generous as SS? > > You pay both halves of SS if you are self-employed, as I am. I’m not sure how you could claim to be self-employed if you were receiving a paycheck from a state system. I know about self-employed. But I’m asking, just as a curiosity, that if the teachers wanted the pension AND Social Security, could they pay all their social security tax on their teachers income if they wanted to? ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [October 18, 2018, 8:26pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/52 "2018-10-18T20:26:32Z")
> [@Chronos](#): > > And when I said that most employers of career employees offer pensions, what I should have said is that most offer retirement plans, which is not necessarily the same thing. That depends on what you mean by “offer retirement plans”. Every place my husband has worked has offered a 401K - and not one of his employers contributed to it. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 18, 2018, 9:49pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/53 "2018-10-18T21:49:31Z")
> [@doreen](#): > > That depends on what you mean by “offer retirement plans”. Every place my husband has worked has offered a 401K - and not one of his employers contributed to it. Then they offer a retirement plan. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 18, 2018, 9:55pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/54 "2018-10-18T21:55:16Z")
It can matter if you’ve worked multiple jobs, one of which is eligible for social security and one which isn’t. My mom taught both in the Catholic schools (which were Social Security) and in the public (which were State Teacher Retirement System), and she ends up getting less from both. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [October 18, 2018, 10:01pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/55 "2018-10-18T22:01:35Z")
> [@MandaJo](#): > > It’s worth noting that public sector employee pensions are often instead of, not in addition to, social security. Yes, though this is changing. I can’t speak to state / city plans, but the only way to have an “instead of” as a civilian Federal employee is to start by 1982 (one of the jobs I was considered for out of school would have been Federal, and I’d just have squeaked under the wire for CSRS). It’s all part of divesting themselves of the long-term risk of making that kind of promise. I don’t know if active-duty military personnel are under a similar scheme, or if they still get a defined-benefits pension. ---
**Author:** ![2ManyTacos](https://avatars.discourse-cdn.com/v4/letter/2/3da27b/32.png) [@2ManyTacos](https://boards.straightdope.com/u/2ManyTacos)\ **Post date:** [October 19, 2018, 3:40am UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/56 "2018-10-19T03:40:59Z")
> [@kenobi\_65](#): > > Even when I started working, in 1989, they were already becoming scarce in corporate America (probably save for union shops, as you note), in favor of 401(k)s and the like. In my career, I’ve now worked for eight different private companies (six of them in the Fortune 500), and none of them offered pensions to salaried employees. > > I’m not sure that I know anyone who has a pension (or is working at a place that will be giving them a pension), except for people who’ve been working in the public sector, particularly teachers. It’s worth noting that as soon as somebody in the company moves to a position that is no longer covered by the union, then he or she begins to receive the 401(k) company match while simultaneously forfeiting any further accrual of union pension benefits. Typically management or corporate roles fall into this category, though there are other positions that do so as well. It’s a complex system. ---
**Author:** ![filmore](https://avatars.discourse-cdn.com/v4/letter/f/7993a0/32.png) [@filmore](https://boards.straightdope.com/u/filmore)\ **Post date:** [October 24, 2018, 2:13am UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/57 "2018-10-24T02:13:47Z")
This episode is on PBS tonight. Maybe it’ll answer some questions: > **[The Pension Gamble | FRONTLINE](https://www.pbs.org/wgbh/frontline/documentary/the-pension-gamble/?)** > > How state governments and Wall Street led America’s public pensions into a multi-trillion-dollar hole. > [@](#): > > The Pension Gamble. FRONTLINE investigates the role of state governments and Wall Street in driving America’s public pensions into a multi-trillion-dollar hole. Marcela Gaviria, Martin Smith, and Nick Verbitsky go inside the volatile fight over pensions playing out in Kentucky, and examine the broader consequences for teachers, police, firefighters and other public employees everywhere. I won’t have time to watch it for a while, so I’m not sure what it’ll cover, but I figured I’d post it in case anyone wants to catch it live. I think you can also watch later on the PBS website. ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [October 24, 2018, 4:35am UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/58 "2018-10-24T04:35:53Z")
> [@Slash1972](#): > > I know about self-employed. > > But I’m asking, just as a curiosity, that if the teachers wanted the pension AND Social Security, could they pay all their social security tax on their teachers income if they wanted to? They can’t get the pension from the teacher’s system _and_ Social Security on the same income. It’s either one or the other. I don’t know for sure, but it would surprise me very much if you could opt to pay SS instead of the teacher’s system if you were eligible for it. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [October 24, 2018, 12:05pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/59 "2018-10-24T12:05:35Z")
> [@Colibri](#): > > They can’t get the pension from the teacher’s system _and_ Social Security on the same income. It’s either one or the other. I don’t know for sure, but it would surprise me very much if you could opt to pay SS instead of the teacher’s system if you were eligible for it. Sometime’s there’s a choice. When I first became a public employee back in 1988 or so , permanent employees of my city could either 1. pay into a defined benefit pension AND Social Security (and collect both on retirement) or 2. Contribute the same amount as Social Security tax would be to a deferred compensation plan and have only the balance of your contributions and earnings at retirement - the employer contributed nothing. ---
**Author:** ![filmore](https://avatars.discourse-cdn.com/v4/letter/f/7993a0/32.png) [@filmore](https://boards.straightdope.com/u/filmore)\ **Post date:** [November 8, 2018, 7:02pm UTC](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033/60 "2018-11-08T19:02:49Z")
> [@filmore](#): > > This episode is on PBS tonight. Maybe it’ll answer some questions: > > [The Pension Gamble | FRONTLINE](https://www.pbs.org/wgbh/frontline/film/the-pension-gamble/) I had a chance to watch the episode and thought it was very informative. It covered the pension shortcomings for the state of Kentucky. The problems came about for many reasons. The government was underfunding the pension and using the money instead for politically popular public projects. The stock market crash erased a lot of the value. The pension board invested in risky hedge funds which lost money and had many layers of expensive fees. Some of the reps on the pension board who are tasked with making investment decisions have little or no financial background. This has created an environment where the pension fund is unsustainable. Kentucky has changed to a 401k style program for new employees and will try to maintain the pension for existing employees. One thing the program mentioned is that KY isn’t the only state to be in this situation. The pensions in many states are similarly vulnerable to failure. KY might be the first to fail, but it won’t be the only one. [Previous page](https://boards.straightdope.com/t/pensions-maybe-im-just-ignorant/823033.md?page=2)