The Wall Street Journal 01/04/12
Opinion: Why Public Pensions Are So Rich
According to government union leaders, their employee retirement benefits are “not lavish by any means”. Service Employees International Union asserts that “After decades of full-time work for the state, the sad truth is that far too many retired state, employees receive yearly amounts that force them to live in poverty.”
Most private-sector workers hold “defined contribution” 401(k) type savings account that guarantee no specific pension.
A case in point is the Illinois Teachers Retirement System (TRS), which insists that, because Illinois teachers don’t participate in Social Security. The 2010 annual report of the TRS actually shows that the average teacher who retires today after 30 to 34 years of service had final earnings of $86,466 and collects a pension of $60,756 a year, plus annual cost-of-living adjustments. That’s a lifetime value of almost $1.6 million.
Compared to private sector worker’s retirement plan consist of a combination of Social Security and 401(k). In the same scenario as above, a private sector worker would have get paid $17,750 from Social Security per year and remaining $43,000 would have to come from elsewhere.
There is no good reason why public employees should receive retirement benefits so much more generous than those of other Americans.
Common Sense Review
Gov’t chooses winners and losers when they offer wage and benefits that are not equal to the private sector.
How the wage/benefit of public sector paid by private sector is are better than the wage/benefit that pay for the public in the first place.
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