[gbhn]

Perhaps a better analogy: let's say you're hiring people with the offer that you'll pay them $2M the first year, then nothing for 20 years. The danger is that the person will quit. So it is more conservative to offer a deal where you pay them nothing for 20 years, then $2M. Then you're pretty sure they'll stay, especially if they're 15 years in.

I think that's probably the best way to understand the salary/pension trade-off. The public sector is geared to be quite risk averse in investments, so it offers back-weighted comp to try to be frugal on training and provide continuity.

There's also basically no other employer that can credibly offer this kind of comp, so the public sector, by offering it, can compete quite well for talent in the space of those interested in that configuration. It's not the only way to run things, but it makes some sense.

[Merad]

Do civilian government employees even get a pension plan anymore? I got an offer a few years back from a three letter agency in DC and I'm pretty sure they just had a 401k.

[yardie]

I believe so. Federal employees don’t pay social security so their only fixed income will come from their government pension.

[martzcodes]

Yes they do. In the old system they didn't, but everyone since ~1984 does (and most of the old-system folks are retired or near retirement now.

https://www.washingtonpost.com/blogs/federal-eye/post/federa...

[yardie]

Right I was talking to a retired, lifelong federal employee who mentioned he didn’t pay SS. Since ‘84 was over 30 years ago I expect the number to flip for those on the new pension scheme, soon.

[navbaker]

Yes, 1.1 percent of the average of the highest three years you were paid during your service for each year you worked. So if you did 30 years, you’d make 33 percent pension. That’s on top of the employer match that the government does if you contribute to the Thrift Savings Plan, an ultra low expenses IRA plan for military and federal civilians.

[brian-armstrong]

This system doesn’t work at all if people believe pensions are being cut.

[Cthulhu_]

Or that you can (apparently? I heard?) lose your pension entirely if you get fired before reaching retirement age.

(pension funds should be owned by the person using it, so that you will have access to it at retirement age even when you're fired. An employer should also not be able to take anything from it, and be held liable if they don't pay it.)