What if I work for the government?
- What's a defined benefit plan?
- Can I decide how my money is invested?
- What's the difference between a defined benefit plan and a defined contribution plan?
- What happens when I retire?
- Exactly how much will I get when I retire?
- Am I eligible for a defined benefit plan?
- Just how common are defined benefit plans?
- What if I work for the government?
- What are the advantages of a defined benefit plan?
- What are the disadvantages of a defined benefit plan?
- Can I tap my money early?
- Can I count on the money to be there when I need it?
- Will PBGC payouts be as big as I was counting on?
- Is there insurance on government plans?
- How can I make sure my pension is covered by the PBGC?
That's a different story. Traditional pensions are still offered by about 90% of state and local governments. How come? Simple: It's hard for a politician to get elected, or re-elected, on a platform that vows to take away the traditional pension gravy train.
That said, given the budget challenges in many states, many public-sector pension plans do not have enough money set aside to cover all the future payouts promised to current workers. That doesn't bode well for taxpayers in those states; short of a miraculous stock market rally that pushes all the plans into overfunded status, at some point the government is going to have to find the money to pay the retirees. And that probably will require higher taxes.
