People entering the job market today (or even most of the millennial generation) were never offered these final salary pensions. Instead we get defined contribution plans, 401Ks, or nothing at all.
The key difference being that defined contribution plans (and 401Ks) are always only worth what was contributed (and investment performance profits). Things like your final salary, final position, or year of retirement (except for IRS rules that give significant tax advantages) don't mean very much except contributing more to these funds.
It is a better system from a larger society perspective (nothing is "loaned") but may result in few actually being able to afford retirement.
Bust your ass with overtime for 3 years and you can reap the benefit for the rest of your life.
I also recall the NYCFD had a problem with that and with people claiming disability right before retirement. The rate was something like 90%.
As a result a fireman who made a base of $100K per year (just a guess), might end up with a full pension at 50 that pays him/her $150k per year until death.
> As a result a fireman who made a base of $100K per year (just a guess)
I know that was a guess, but sounds crazy high for a fireman. In my rather well-off Western European country a fireman makes about $45k per year before European taxes and deductions.
Most pensions historically.
People entering the job market today (or even most of the millennial generation) were never offered these final salary pensions. Instead we get defined contribution plans, 401Ks, or nothing at all.
The key difference being that defined contribution plans (and 401Ks) are always only worth what was contributed (and investment performance profits). Things like your final salary, final position, or year of retirement (except for IRS rules that give significant tax advantages) don't mean very much except contributing more to these funds.
It is a better system from a larger society perspective (nothing is "loaned") but may result in few actually being able to afford retirement.