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tony

The Pension Gamble

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7 hours ago, krow36 said:

WA State’s TRS 3 plan which is a hybrid pension plan, part defined benefit (DB) and part defined contribution (DC). The following states have adopted hybrid teachers retirement plans for new hires: Indiana, Oregon, Florida, Ohio, Michigan, Rhode Island, South Carolina, Alaska, Washington and West Virginia. https://caldercenter.org/sites/default/files/wp-81.pdf  It seems likely that states have been added to the list in the last 8 years.

 

Krow

I think you can add Virginia to the list. I think the VRS has a hybrid system for all new employees in place.https://www.varetire.org/Media/hybrid-exploring-your-retirement-plan/index.asp

 

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47 minutes ago, tony said:

Krow

I think you can add Virginia to the list. I think the VRS has a hybrid system for all new employees in place.https://www.varetire.org/Media/hybrid-exploring-your-retirement-plan/index.asp

 

In addition to the states above, the following states have hybrid plans for non-teacher state employees as of about 2015: Georgia, Indiana, Michigan, Ohio, Oregon, Rhode Island, Tennessee, Utah and VA. So both lists are out of date. And we had that recent poorly written article on the soon to be Illinois state 457 plan that mentioned a hybrid IL TRS pension plan that is in the works.

https://www.pewtrusts.org/~/media/assets/2015/04/hybrid-public-pension-plans_brief.pdf

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The WA TRS 3 hybrid plan has a required employee contribution of 6% to the defined benefit part, and a minimum contribution of 5% to the defined contribution part. However, the employee can choose among about 6 different contribution schedules with the top rate being 15%. The schedule can be changed only once unless the employee changes districts. The defined benefit (pension) part results in a 1% of final salary benefit.

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http://ers.ehawaii.gov/members/active

Hawaii's state employee retirement system (ERS)  has different levels of contributions to pensions; i'm in hybrid because I was hired between 1984 - 2006 when the pension was non-contributory and about a year later they started "allowing" teachers to pay in... so now I contribute 6%.  Newer teacher hires contribute 8%.  What's interesting to me is that police, firefighters contribute 12.2 or 14.2%. They have access to 457, but not the 403b (I think, not sure). 

 

 HI  uses a formula to determine pension payout... mine is 2% years of service AFC.  AFC is average final compensation, which is either your "high 3" or "high 5" depending on year of hire.... average monthly pay of your highest 3 (or 5) years.  We have access to 457, 403b; we pay in to social security...we have a flex spending program.  I'm scared to try that because you either spend or lose the money deferred for it. I'm not a tight enough budgeter.    

I vested in 5 years, newer hires vest in 10 years. 

 

Unfortunately, HI pension is currently about 50% funded. Who knows what that will mean for state employees in the future.  It's one of the reasons I'm trying to save more now.

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