Comment by Spooky23 | Hacker News Reader

Comment by Spooky23 | Hacker News Reader

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One reason is that many places changed the actuarial tables. Average life expectancy is higher than it was, driven by improvements in outcomes and more women at work.

Another is that monetary policy has made fixed income securities a low yield investment. Funds need to diversify and add risk.

Another reason is that folks writing these things assume workers work a full career. The reality today is that many government workers start in their 30s and 40s, and only get the rich benefits if they work until their late 60s. That neutralizes the problem, as they will be dead sooner.

Personally, I think the WSJ and other anti-pension people overplay the liability. The drivers of pension expenses are police and firefighters, and these (mostly) guys tend to die young.

They also tend to report on the problem in masse, while it varies from outright disaster (Illinois) to Oregon, which is overfunded.

Many also retire young. My firefighter buddy will retire well before his 50th birthday and collect >$100k/yr in a relatively low COL state. He's in good shape, physically and mentally. He could easily live to 90, no problem. Good for him, but not great for taxpayers.

>My firefighter buddy will retire well before his 50th birthday and collect >$100k/yr

How is this possible? The state that he lives in hasn't changed the rules for vesting/collection? That seems like an absurd amount of money for what I'm assuming is a career that's lasted less than 30 years.

Most public safety people can retire at half pay with 20 years, and it goes up year by year, usually capping at 60-70% of the average salaries of the last 3-5 years. Many contracts don't cap overtime with respect to pension calculations.

If you join at 18, at 50 you'll have 32 years, which in many departments means seniority to get alot of overtime. It's a decision that the municipality makes -- they understaff to preserve cash and dump the longer-term problem on the bigger pension fund.

The early retirement is important, as the life expectancy for police/fire drops significantly based on retirement age. But the polices re: overtime as it impacts pensions are often too generous. These issues are "fixed" for normal employees in most places -- for example in NY non-public safety employees and teachers have caps (~10%) on how much your salary can increase for pension purposes and either eliminate or cap how overtime applies.

My wife worked for a public employer who had a way to let overtime go into an optional 401k-type plan at a higher rate so that blue collar employees would have an easier time retiring on time. (Many blue collar folks basically depend on OT)

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