The federal government spends about $315 billion a year on federal pensions, one of the top eight federal budget items. Unlike all other pensions, federal programs do not invest in the stock market, but special treasury bonds similar to what the Social Security trust does.
The liability for these pensions is yours. Oh, and you can add more liabilities for your state employees pensions.
I don’t begrudge anyone a pension, I am lucky to have a pension. However, government pensions are generally very generous and they are paid for by American taxpayers – most of whom do not have a pension.
I think your info may be dated. Federal pensions USED to be generous. For the average joe/jane, they’ve been pushed to the TSP/self contribution, similar to 401ks. Today’s pension is a shadow of the old system. By the way…fed employees have also been handed years of wage freezes, followed by the last few years of ridiculous 1-2% cost of living at most, as insurance costs and inflation skyrocket. A 2.2% increase in 2022 – as inflation continues in double digits? There is a reason people are leaving federal service in droves and many federal agencies are short staffed.
Before you drown government in a bathtub, consider that, at any given time, one out of seven workers is employed by government at some level. It’s a complex, symbiotic relationship which has evolved over the years, often with unknown or misunderstood consequences.
Example one, liberal vs. conservative studies disagree whether public employees are overpaid or underpaid, —on average— in total compensation ( salary + benefits). All studies agree, however:
Lower level government employees earn more (often much more) than equivalent private sector workers, in total compensation, mainly due to much higher benefits.
Higher level public workers generally earn much lower salaries than equivalent private workers, and the higher benefits are not enough to compensate for lower pay.
In the middle, logically, and empirically verified, is a group whose lower salaries are roughly offset by higher benefits/pensions, so they are compensated nearly equal to similar private sector workers.
IMHO, this is a feature, not a bug.
1. Mandatory “deferred compensation” is a plus, not just for the employee, but for the economy generally, as the spending of reliable income tends to even out the extremes of business/recessionary cycles. It has a stabilizing effect, much like Social Security.
2. Pensions are not excessive. Rather, the higher pay of lower level employees are subsidized by higher paid public workers… Public workers are more egalitarian.
3. Government as ” model employer “; pay and benefits of lower level public employees, in the competitive market tends to increase pay in the private sector. Without which, the nefarious income inequality would be even worse.
4. If you think health care and retirement security are a problem now, imagine losing that for one out of seven workers and their families, even though they now are no net cost to you, and me.
The federal government is such a huge employer, it is difficult to know who gets comparable pay and who gets less than private sector and who gets more. By who I mean specific jobs categories. It is not disputed that benefits are very good though. Bureaucrats tend to stay long enough to receive the retirement and healthcare in retirement so it must be good overall.
Most “government” employees, Federal or local, can’t literally be called government employees at all. They are private sector employees who spend part of their career in a government job. Only about twenty percent of retirees are full career gov. workers (30 years or more). About half don’t even stay long enough to vest in retirement pay/benefits.
Median tenure for public workers is 6.8 years. 3.7 years for the private sector. BLS 2022.
A lot of federal and state retirees with a pension under $1,000/month….
AND… retiree healthcare. That’s a biggie.
But on the backend of that story, most government employees make well below what that could receive in the private sector, so it’s kinda like pay me now or pay me later!
“Studies have shown”* that public sector workers, on average, earn about the same as equivalent private sector workers. However, they tend to earn less in salaries, roughly compensated by higher pensions and benefits (mainly Healthcare, including retiree health-care).
Mandatory retirement savings, that’s a good thing, IMHO.
*Controversial studies, of course.