3 ms·

Teacher pay discussions are woefully incomplete if they don’t include pension contribution. In tech we talk about “total compensation” as opposed to “salary”.

Teacher pay discussions are woefully incomplete if they don’t include pension contribution. In tech we talk about “total compensation” as opposed to “salary”. The same should be true for other jobs as well. Especially those with a defined benefits pension plan!

rconti 2y ago
If someone has a defined benefit, they still pay into it. That's not to say defined benefit programs aren't a great deal for the employee -- they are, and most of us would love to have one. It's just to point out that you can't factor in pension payouts as 'free money' because it's more akin to an outsized market return or something. Basically, you'd need to figure out the excess ROI based on what they get out vs what they put in, relative to the market (or something).
- justin66 2y ago
  > That's not to say defined benefit programs aren't a great deal for the employee -- they are, and most of us would love to have one. I would much prefer a big SEP-IRA, or a 401k with a company match beyond the standard safe harbor 4% or whatever it is. Government defined benefit pensions come with their own problems. https://news.ycombinator.com/item?id=40538070 https://news.ycombinator.com/item?id=40538070
vundercind 2y ago
These are very insecure in a lot of states. Even the ones with stable teacher retirement systems are under constant threat of having those systems destabilized by the political winds.
zie 2y ago
While I agree Total Compensation should be what is talked about, in general pension plans for government employees is self-funded by them. Some states are as high as 10-15% of your salary going into your pension and the employer picking up the same or higher rate. Pennsylvania for instance has an employer contribution rate of 34.94% plus an employee rate of around 7.56%. - https://www.psers.pa.gov/About/PFR/Documents/ECR%20fact%20sheet%20FINAL.pdf https://www.psers.pa.gov/About/PFR/Documents/ECR%20fact%20sh... Arizona is at 12.29% each for employee and employer for a combined rate of almost 25%. https://www.azasrs.gov/content/contribution-rates https://www.azasrs.gov/content/contribution-rates

rconti 2y ago

If someone has a defined benefit, they still pay into it. That's not to say defined benefit programs aren't a great deal for the employee -- they are, and most of us would love to have one. It's just to point out that you can't factor in pension payouts as 'free money' because it's more akin to an outsized market return or something. Basically, you'd need to figure out the excess ROI based on what they get out vs what they put in, relative to the market (or something).

justin66 2y ago
> That's not to say defined benefit programs aren't a great deal for the employee -- they are, and most of us would love to have one. I would much prefer a big SEP-IRA, or a 401k with a company match beyond the standard safe harbor 4% or whatever it is. Government defined benefit pensions come with their own problems. https://news.ycombinator.com/item?id=40538070 https://news.ycombinator.com/item?id=40538070

vundercind 2y ago

These are very insecure in a lot of states. Even the ones with stable teacher retirement systems are under constant threat of having those systems destabilized by the political winds.

zie 2y ago

While I agree Total Compensation should be what is talked about, in general pension plans for government employees is self-funded by them. Some states are as high as 10-15% of your salary going into your pension and the employer picking up the same or higher rate. Pennsylvania for instance has an employer contribution rate of 34.94% plus an employee rate of around 7.56%. - https://www.psers.pa.gov/About/PFR/Documents/ECR%20fact%20sheet%20FINAL.pdf https://www.psers.pa.gov/About/PFR/Documents/ECR%20fact%20sh... Arizona is at 12.29% each for employee and employer for a combined rate of almost 25%. https://www.azasrs.gov/content/contribution-rates https://www.azasrs.gov/content/contribution-rates