Quote:
Originally posted by Mmmm, Burger (C.J.)
What government employees are you speaking of?
In the fed'l gov't, you get a pension that's (something like) high-three-years X years of service/30. Minimum of five years to qualify, and you can't take it until 62 (or 60). Provisions for an increase if you wait until 70; decrease if you take before 65. Basically, it's the same as many private sectors employers who give a defined benefit plan.
The scandal in pensions is not the benefits, but their routine underfunding by employers.
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Funding levels in pension plans fall, obviously, when the market sucks. Unfortunately, this is a time when it is legitimately more difficult for companies to find money to put in.
They are prohibited from overfunding plans when times are good (the economy as a whole is riding high, so the pension plan is flush) -- so to some extent they are in a bind.
Right now, everyone is freaking out because the Pension Benefit Guaranty Corporation (PBGC, federal entity that insures private defined benefit pension plans) is getting stuck with underfunded plans. People are forgetting that not 5 years ago, a hue and cry was being raised to lower PBGC premiums because it was "getting rich" off of the plans. [Note this insurance is mandatory, not optional.]
There really is not much of a scandal in underfunding of private employer defined benefit plans outside of a few financially distressed industries (steel, airlines).
But, you know, "the real scandal is underfunding by emploeyrs of pensions" makes a nice sound bite.
