I notice that many of your articles on retirement emphasize the building up of other resources for retirement to go along with Social Security retirement.However, there is a group of retirees that cannot use your system due to the circumstances at the time of their employment and subsequent retirement... I refer to you the governmemtal workers who worked for local, state, anfederal agencies in years past without being covered by the Social Security Act. Many of these retirees have no Social Securty benefits coming because their employers were not covered under the SSA.During the Sixties and Seventies, while the governmental agencies were finally brought into SS, it left many long term, soon to be retired employees with no benefits because they didn't have enough time in to get the minimum forty quarters needed.What can be done for these retirees?Wyattarp
I really don't see the problem here. Government employees are ususally covered by generous pension plans and health insurance. These employees had years of not contributing to social security while everyone else was forced to contribute to the system. Now that they are retired, it should not be a surprise to them that they will not get benefits. They had the chance, which is denied to those of us forced to contribute, to save and invest their money. I wish I had my contributions. I would be way ahead.
I really don't see the problem here. Government employees are ususally covered by generous pension plans and health insurance. These employees had years of not contributing to social security while everyone else was forced to contribute to the system. Now that they are retired, it should not be a surprise to them that they will not get benefits. They had the chance, which is denied to those of us forced to contribute, to save and invest their money. I wish I had my contributions. I would be way ahead. I can't speak to state retirement systems, except I can tell you that Kansas is hardly generous with respect to retirees' health insurance. While there's group coverage, there's no state contribution, and my parents pay more than $400 a month for it.I can speak to Federal CSRS retirees, of which I am one. I agree with your overall point, but want to clear up one misconception. Employees covered by CSRS contribute to the plan. In fact, over my working career, my CSRS contributions were more than would have been my Social Security taxes had I been paying them. Thus, I had less money, not more, to invest on my own.Phil
You bring up good points...But we weren't given options about which pension plans to select(as if we had a choice). Also, many of the Govt retirees didn't pay into Medicare and as a result get none of the medicare benefits.Im one of the lucky ones.. My Social Security qualificatons were met before I entered into civil service under the old pension system so i can get benefits (except disability) from SS. However I'm being penalized by one-half of my SS annuity because I have a govt. pension.This was an unintended result of the legislation to prevent militarypension retirees from "double dipping" as the practice is called. Congress didn't realize at the time that it would affect retirees that had their forty quarters in when they went to work for local, state, and federal agencies... in other words I paid full SS taxes but only get half the annuity benefits and no disability benefits because my last ten years of employment was under civil service prior to inclusion of civil service employees into the SS system...and we are not allowed to pay prior back taxes needed to get full SS coverage.wyattarp
Re: Social Security and Govt workers:My husband worked under Social Security and for the Government. He should have qualified to receive both; however, in 1983 the laws were changed. Had he worked in the private sector, he would have been eligible to receive a pension from a private concern plus Social Security benefits, as does the average citizen.
NYMom wrote:I really don't see the problem here. Government employees are ususally covered by generous pension plans and health insurance. . . .Well maybe for some older federal employees, but under a state government pension plan the health care support is often pretty minimal and the group rates an early retiree gets are pretty high because of the age of the group. If there are no pre-existing condition complications it is often cheaper for younger government retirees to just buy insurance on the open market ($700-$800/month for my family). For me, the bigger pains are that there is no Medicare coverage when I reach 65 and that, if I go back to work in the private sector, the new Social Security payments I make will be wasted unless I work for ten years. Even then, because of a special provision in the law, they will be mostly wasted since the normal benefits are substantially reduced (typically, most of them are taken away) if one already receives a government pension. It takes away a lot of the incentive to work post-retirment if you know that 40% of your earning will immediately disappear into federal and state taxes and Social Security contributions. Still, many former goverment workers go back to work in the private sector if they already have some Social Security credits just to earn enough to be eligible for Medicare.My pension plan is indeed generous when compared to Social Security, but it certainly does not return more than I could have made if I had invested the same money myself. My 7-1/2% monthly pension plan contributions will probably return more than twice what comparable contributions to Social Security would have done, but my benefits will be fully taxable and that better return I'm enjoying certainly doesn't come without a price in other lost benefits.-- John
I'm a state of Nevada employee, and I contribute more to PERS than I would under social security. The myth that state pensions are some wonderful windfall of money is JUST a myth.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |