Thank you, Quazi!
Annual pension benefit formula (in general):
Hires before July 1, 2010:
Final average 3 years’ compensation[§§] x 1.5 percent x years of service
Hires on or after July 1, 2010:
Final average 5 years’[***] compensation x 1.5 percent x years of service
Comparing Michigan Private-Sector Pensions to MPSERS
Do the math. Figure a 3-year average just before retirement at $50,000 X 3 (first example) = $150,000 X 1.5% = $2,250 X 30 Years = $67,500.
Thank you, Quazi!
A three year average doesn't mean (using $50K) = (50,000 + 50,000 + 50,0000) * 1.5 = 150,000 * 1.5 = 2,250
A three year average would mean (using $50K) = ((50,000 + 50,000 + 50,0000/3) * 1.5 = 50,000 * 1.5 = 750
Meaning the calculation would be = ((50,000 + 50,000 + 50,000)/3) * 1.5 * 30 = 50,000 * 1.5 * 30 = 750 * 30 = $22,500
Average means sum the values of the elements in the set and then divide by the number of elements in the set. It doesn't mean sum the elements and stop.
It loses quite a lot of punch when I point out that it's STILL $22,500 compared to the oft-used $19,000 figure, doesn't it??
Thank you, Quazi!
Actually this thread made me look up my own retirement projection last night. I'm under VRS (Virginia Retirement System) and make about $60,000 a year and my projected retirement is $2,100 a month ($25,200) and there is no medical insurance after Medicare qualification age.
My system as 2725 Full Time (i.e. can be part of the retirement system) and of those 2112 make below the $50,000 mark and lots of those (bus attendants, bus drivers, secretaries, instructional assistants, etc.) make less than $25,000 per year. Using the previous formula that would be less that $11,000 per year in retirement.
Disclaimer: I'm kind of an oddball because I didn't start under VRS until I was about 40 and have a defined benefit retirement from my military career.
Last edited by WorldWatcher; 07-28-13 at 08:22 AM.
The average will be pulled down by the number of late starters and part timers, who get a pro rata pension.
I love the smell of face-palm in the morning!
"You ain't no Muslim bruv!"
Trying to meet pensions, existing deficits, and debt paymens in bankruptcy means cutting already reduced city services to the bone and beyond. How can the city continue to function if the bulk of revenue is going to go everywhere but where it is truly needed?
If I stop responding it doesn't mean I've conceded the point or agree with you. It only means I've made my point and I don't mind you having the last word. Please wait a few minutes before "quoting" me. I often correct errors for a minute or two after I post before the final product is ready.
I really hate it when they leave out the actual law in what they are reporting.
It speaks to me of dishonesty and subterfuge.
§ 24 Public pension plans and retirement systems, obligation.
Sec. 24. The accrued financial benefits of each pension plan and retirement system of the state and its
political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.
Apparently the AG is going to have to argue the intent of the law and not the actual law.
While contractual obligations can be renegotiated, under bankruptcies, they can be invalidated.
It will be interesting to see how this plays out in Court, especially since this filing was a Federal, not state filing.
Last edited by Excon; 07-28-13 at 10:22 AM.
"The law is reason, free from passion."
the pensions are probably screwed, and that really bothers me. a pension is deferred salary; you take a ****tier wage in exchange for retirement money. then when it comes time to collect, all of the sudden the money isn't there, and you're screwed. it's a lousy setup, and the middle class gets hammered again and again by both public and private pensions going bust. a manufacturing company in my area just screwed its workers in this exact same way.