Christian Schneider

Author, Columnist

You, Too, Can Be a State Government Employee

Over the past few months, we here at WPRI have issued a number of reports regarding the fact that state government employees pay nothing for their pensions.  And for suggesting that state employees actually pay the “employee” portion of their pension benefits, we’ve gotten significant blowback.  (See “Growing Anger Over Free Government Pensions” from our Refocus Wisconsin project.)

As it turns out, it’s not just actual state employees that can live the dream of paying nothing for their retirement benefits.  Just take a quick trip over to the Wisconsin Department of Employee Trust Funds website, and fill out the Retirement Benefits Calculator the ETF provides on its site.

In order to figure out your lifetime annuity, all you need to do is fill in your date of birth, the date on which you hypothetically plan to retire, and your three hypothetical highest earning years.

For the purposes of this exercise, I plugged in that I was a 20-year teacher with a 3-year high salary of $75,000, $76,000, and $77,000, and would be retiring in 2026.  As a result of my 20 years of service, I would receive an estimated  lifetime annuity of $$1,669.89 per month.  (I have the option of getting more up front and less on the back end if I choose the accelerated payment option.)  All, of course, for my monthly required contribution of zero dollars and zero cents.

So at your next dinner party, fire up the website, gather the guests around, and play “guess what my monthly annuity would be if I were a state employee?”  It’s bound to be a hit.

See the benefit calculator here.  (Click the “I have read the disclaimer” link at the bottom.)

8 Comments

  1. Wallstreet Banker

    September 28, 2010 at 8:59 am

    Why would I want to waste my time in a classroom. There are easier ways to get a great retirement package. Also paid by the taxpayers.

  2. The real issue is how public employee and private employee compensation compare. An honest comparison requires looking at both salary and benefits for the same types of jobs. Much of the “significant blowback” you receive is because you focus on pension benefits, while ignoring any comparison of salary. Most “same job” total average compensation analyses I have seen show higher salaries in the private sector, higher pension benefits in the public sector and slightly higher total compensation in the private sector.

  3. Christian Schneider

    September 28, 2010 at 11:26 am

    There have been numerous studies done recently that focus on public versus private sector salaries. None of them support the notion that public employees are underpaid when compared to their private counterparts.

    Take this study, for instance.

  4. Christian Schneider

    September 28, 2010 at 11:32 am

    Or this chart out today, which shows government pay growth outpacing that of the private sector.

  5. I really don’t get it, Christian. Seems to me this represents a great example of open government in that any person, regardless of whether they are a state employee, can see the pensions offered to state employees. Isn’t open government a good thing?

    One of the many implications of being a public employee is that salaries, benefits and pensions are public knowledge. Thousands of public employees have already had their salaries included in various newspaper articles and Web site databases. I don’t see any link on the WPRI page listing the salaries and benefits of its employees, but that is one of the perks of being employed in the private sector. I’ve worked on both sides, public and private. It’s not apples to apples to simply compare the money – there are a lot of other factors at play.

  6. Christian Schneider

    September 28, 2010 at 12:50 pm

    The thing that makes the website worth mentioning in a blog post isn’t the fact that it exists, but that people can see how much more generous public pensions are than the one they have. I’m not ridiculing the existence of the site – it’s actually a pretty neat tool.

  7. Both of the sources you cite are analyses of the compensation of federal government employees compared to private sector employees. Your article and my response were about the compensation of Wisconsin state and local employees who are in the Wisconsin Retirement System. Federal compensation differs from Wisconsin state and local compensation.
    A study published in April 2010 by the Center for State and Local Government Excellence, which is available on the Center’s website, does compare state and local public employee compensation with private sector compensation. It concludes that, even though public sector fringe benefits are higher than in the private sector, private sector total compensation is higher when you factor in salary levels.

  8. Mike Schwaegerl

    October 2, 2010 at 9:23 am

    Look, Chistian. I do not believe that there is any 20 year teacher in Wisconsin who would average 75,000 a year for his her best three years. One would reach that salary after about 40 years and a Masters Degree. In additon, I think you know that is not fair to say that the pension is free. I sat in 25 years of bargaining sessions where it was clear the Boards of Education were quite willing to put money into pensions instead of salaries in order to save payroll taxes. In addtions, pension contributions do not roll into salary schedules as salary increases would. Be a little more fair in your comments.

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