[quote=Eugene]
And how did he manage to get this pension? By contributing to his pension plan for 30 years. If he had started with $80,000 a year and $2000/year raises, he contributed 7% of his pretax salary to a 401k, his employer matched the contribution, and the 401k averaged the same rate of return (7.75%) as CalPers, he would have had approximately $1.5 million in the pension fund. Which, again assuming continued 7.75% rate of return in the future, would have lasted him till 83 or so with $126,000/yr annual withdrawals.
By the way, where did you get 87? The 2005 United States life table shows the life expectancy of a 55-year-old to be 26 to 27 years.[/quote]
Fire Department Fire Engineer Min $61,588 Max $74,464 Actual $154,440 Retirement 3.0% @ 50 Employee contribution to retirement: $2,057
It’s a defined benefit plan and not a defined contribution plan.
So $2,057/$154,440 is what 1.3%? A far cry from the hypothetical 7.75%
The equivalent non-inflation indexed NPV of a $100,000/yr annuity is roughly $1,700,000. With survivor benefits a little more. Can’t get them indexed to inflation or with medical benefits. That’s today and those value are highly dependent on current rate of return.
The 87 years number comes from a CalPers study that says counter to the claims, the safety workers live longer and are healthier than their non-safety counterparts with an average age of death of 87. The link is posted elsewhere here on Piggington.
For giggles, I looked at a local Orange County city. Not the firefighters, but the police. it had 802 entries. 58 entries had bad data (no actual pay and small rang: i.e. $4900-$5600)of the remaining, 108 showed less actual earnings than the minimum on their position. I’m assuming those are new hires, people leaving and or the odd disability (again CalPers shows low disability rates). of the remaining, 609 made more than 100% of the maximum published salary. Only 28 made actual earnings between minimum and maximum published salary.
So 75% made over 100% of max, and approximately 3% made between published min and max.
