Government pensions are confusing. Because of the cozy relationship between politicians and pension administrators, government pensions don't have to comply with the same financial and audit rules that private sector pensions have to comply with. As a result, they use practices long since banned in the private sector that mask the true unfunded liabilities they possess. Those unfunded liabilities subject taxpayers to the risk of having to bailout the government pensions through higher taxes or program/service cuts. For example, government pensions routinely announce a median yearly pension that grossly understates the actual median yearly pension it pays out to career government workers. By including government workers who meet the bare minimum years of service requirement (i.e., someone who only worked for five years in government before doing something else receives a very small pension) and those who receive a reduced pension (survivors of pensioners and disability claimants), government pensions announce a median yearly pension that is significantly below the median yearly pension it pays workers who retire after a 30-year career. With this page dedicated to just government pensions, we try to get past the misleading information and help you understand government pensions and what those pensions really cost you.
To help you appreciate just how good government pensions are, we created this innovative tool that allows you to enter the yearly pension you would like to have when you retire to see how much cash you will need to already have today and how much cash you will need to have when you are ready to retire to have the pension you desire. To put it in perspective, if all Ohioans received the yearly median pension paid to state workers, it would require a yearly tax of $123 billion and consume 26 percent of Ohio's Gross Domestic Product. As a comparison, we provide you with the actual median yearly pension each of the five pensions pay based on the pensions' 2010 Comprehensive Annual Financial Reports. We also provide you with how much those median yearly pensions will require and how much government workers will receive in total if they retire when first fully eligible and live to 78 years old. If a neighbor, friend, or family member works in government, feel free to use the salary data tools in the box below to see what her estimated pension will be (just use the appropriate salary tool and enter her name) and enter that figure into the pension comparison tool to see how much cash YOU would need to have to get a pension equal to your neighbor, friend, or family member. You also can use the Compare Your Salary tool below to find out how much your peer in state government makes, plug that salary figure into our Pension Calculator to see what his estimated yearly pension will be upon retirement, and compare that pension to your Retirement Comparison pension results. Enjoy!
Desired Yearly Pension: $ Your age today:
In Ohio today, private sector workers earn substantially less than their federal government neighbor in 87 out of 88 counties; earn a lot less than their state worker neighbors in 85 out of 88 counties; and earn less than their local government neighbor in 69 out of 88 counties. When benefits like health care, sick leave, and pensions are added to the mix, the goldplated compensation packages of government workers far outstrip those available to the vast majority of Ohioans in the private sector. Our groundbreaking study, The Grand Bargain Is Dead, showed that the median state worker receives a compensation package, including a pension, that is 28 percent greater than his private sector neighbor. Take a minute to get the facts on exactly how goldplated the government system really is.
Instead of confusing you with generic comparisons that shade the truth like the union-funded groups do, we've made it easy for you to compare what you make to your peer in state government. We use the actual payroll data from the State of Ohio. As they say, knowledge is power.
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