Submitted by pninardor t3_y493ve in massachusetts
There's an open position with the state I may apply for, but I'm wondering if the state retirement pension is good. I'm coming from a university where the benefits are really great. TIA.
Comments
pninardor OP t1_iscz0rm wrote
I did read that online, but thank you. Right now I put 10 percent into the pension and my work matches.
ManderBlues t1_ish6xyi wrote
No, the benefits are not good. They are better than municipal jobs, but rarely stack up to academic positions or private consulting -- at least in my field. The union you would be a member of would determine vesting, years in service and retirement age. If you were an academic in Massachusetts, you may be able to "buy back" years of creditable service. Salary increase are slow (low), but steady. Look at the salary cap in the position to see if you could live with that.
Any position Assistant Director and above are generally non-union. The health insurance is expensive but comprehensive.
hemingwai t1_isd60i9 wrote
After 10 years youre vested. You can retire at 55 with 10 years of service, but the formula that determines what % you get is a combination of age and years of service. The most you can ever get is 80% of your top 3 consecutive years (overtime doesnt count). Most people choose option B, where you take about 7% less, but if you predecease your spouse, they continue to get your pension until their death.
The only weird one is “group 4” which are sworn police and fire employees, who get to 80% a little faster.
thatsomebull t1_isf3463 wrote
Applying for a state job and landing a state job are two entirely different things. If you are “considering applying” you’re a long way off from worrying about a pension.
pninardor OP t1_isfk6vv wrote
You're right so I may just apply and see what happens
Hen-stepper t1_isf40m7 wrote
I thought a lot about this too. Yes, the pension is great, if it is still around by the time we retire.
Even if it's a 5% chance that it goes bankrupt or something breaks, that is basically a 5% risk of death. That is what losing one's source of income at an old age means.
So I consider it neutral. 401k matching is a much safer option in my book. Especially if you aim to max it out.
iambatmanjoe t1_isk7qz8 wrote
There's 4 groups of pension based on what job you're looking at. There's an algorithm that shows you what you'd get based on age, time of service, and average pay. Go on the state website for more specifics.
[deleted] t1_ise9q6m wrote
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DumbshitOnTheRight t1_isd5b6s wrote
After ten years the pension is 25% of your highest five consecutive earning years. This can go up to 90% with 30+ years in service.
hemingwai t1_isd5mf6 wrote
That is completely wrong.
DumbshitOnTheRight t1_isd64g5 wrote
I can check the documents I got from the union in the last two weeks; I'll grant it depends on the union and job scope.
hemingwai t1_isd6f11 wrote
No, it doesnt. Massachusetts State Retirement is not a union benefit, its overseen by the pension management board and the city/town retirement board. Exempt and union employees use the same formulas.
DumbshitOnTheRight t1_isd71bq wrote
I didn't say it was a union benefit. Which job (office worker, health care, state police, etc.) absolutely plays into the benefit determination.
hemingwai t1_isd79ll wrote
Nobody gets 90%, and nothibg is based on 5 years. Dont give people bad financial information if you dont know what youre talking about.
modernhomeowner t1_isez9p9 wrote
Benefits for those entering service after April 2012 is based on your highest 60-month pay (5 years).
hemingwai t1_isf4mrb wrote
Sucks for them.
Maronita2020 t1_iscw3wz wrote
You should know that most members have to have a minimum of 10 years of full creditable service to be eligible for a state pension.
You should also know about SSA WEP. This is a program where your SSA retirement benefit can be reduced due to receiving a state pension. MA does NOT pay into SSA retirement but DOES pay into Medicare.
www.ssa.gov/benefits/retirement/planner/wep.html