The political debate over pension benefits for public employees has become more strident than ever.
Individual opinions tend to be tied to the personal politics of the individuals in question. But how informed are those opinions? The burden of pension obligations on local and state budgets is hard to overstate. Much of the political debate is fueled by the massive dollar figures, in the hundreds of millions and billions, related to pension liabilities and the assets in pension funds.
Just what are individuals in public defined benefit pension programs getting when they retire? Publicsectorinc.org, a website run and funded by the Manhattan Institute, a conservative think-tank, wants that information disclosed. To that end, they've built an interactive pension calculator tool that allows individuals to calculate the monthly retirement benefits public servants get when they retire.
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The website describes itself as a "one-stop-shop for the latest news, analysis and research about the issues facing the American taxpayer." The pension calculator component of the site allows users to compare pension benefits across all 50 states, and then provides a comparison of how much cash one would have to have saved to earn a comparable benefit from an annuity.
Click on the state of Illinois on the blue interactive map, pick Judge as the occupation with a target retirement date of 60. If hired in 1999, the calculator says that a judge in Illinois with 20 years of service and a salary of $60,000 a year will get $4,250 monthly until they die. The amount of cash needed to yield the same monthly income in an annuity would be about $1.8 million, according to the calculator.
A cop in the Calpers pension plan that retires at 50 after 20 years of service will receive a monthly payout of $2,833. About $812,000 would be needed in an annuity to fund that level of compensation.
A teacher in Texas with 30 years of service and a peak average annual salary of $70,000 will earn $4,000 a month if they retire at the age of 60.
The calculator allows users to make state-by-state comparisons. For instance, a judge in Illinois will make $7,000 a year more in pension benefits than a judge in Colorado with the same service and peak salary.
"Pensions are not one of the most hotly-debated topics in public finance, due to rising costs and generosity relative to what most taxpayers receive," reads the website. The pension calculator tool is "intended to inform the pension debate."
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
