re: Alabama state retirement system?

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With 10 years service Steele final salary would be $1.3mil (up from ~$300k) and Lance Thompson is at $~600k

Thompson would get ~$10k/month
Steele would get ~$22k/month

You don't pay FICA taxes (7.65%) or state Income tax (5%) on qualified pensions though which is huge


Based on Steele's huge payraise, even if he already was invested his retirement would go from $60k/yr to ~$250k/yr for life

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They take the last 5 years and then the avg of the 3 highest paid years.

Thompson was at $450K (2015,) then $429K (2014) then at $400K (2013). Those were the 3 highest years. The average is $426,333.

Then multiply that by # of years of service (10 for Thompson if he stays.)
=$4,263,330

Then multiply that by the Alabama State Legislature Benefit factor 2.0125% (.020125)
=$85,799.52 (yearly)

Then divide that by 12 months
=$7,149.96 (monthly)

There is no cap that I've found, and if Monticello is right in this thread, Thompson would still be below that $120K cap anyways. There are no deductions for tax or social security but his health care would go through his employing agency and he would still have premiums.

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Why should a government give some people a pension, and not give one to those who work in the private industry?

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Doesn't your private company offer a retirement plan?

A major reason for the nice retirement plan is that the average state employee is paid squat. The retirement plan is a retention tool. Both of my parents retired from the state, my dad had 33 years. They both draw social security benefits along with the State retirement. They are doing much better than when they worked.

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Why should a government give some people a pension, and not give one to those who work in the private industry?

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Is this a serious question or are you just young and naive?

Mississippi's is ridiculously good, but it takes 25 years to get full retirement.

(Average of highest four years salary * 0.8)/12 = Monthly benefit +

3% compounding "13th check."

Here's a couple things that folks don't know.

1. Steele is a tier 1 employee (if he didn't cash out or roll over his fund to another private fund last time he left) because he has service credit before the most recent change by the legislature. It changes the rules and the contribution limits.

2. Vesting is 10 years...I guarantee there aren't any private companies that take that long to vest.
I pay in 5% of my salary, my employer pays in that same 5% plus another 1-2% based on some actuarial calculation. So, if an employee at my office makes 50K per year (they don't), they will pay in $2,500 per year, and the employer 'matching' portion will essentially be $3,000. If this stays the same for 10 years, there will have been $55,000 paid into the retirement system on their behalf. If you leave and want to roll over your money, you only take YOUR contributions plus a percentage of the interest, NOT INVESTMENT GAINS OR EMPLOYER CONTRIBUTIONS with you (25,000), the rest stays with the retirement system. If you work for a private company, you typically get to keep ALL contributions, earnings, and interest.

I'm not looking it up, but I would almost promise you they aren't getting 2.5 times their annual salary in retirement.

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LSUTigersVCURams

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apologies for the misunderstanding

It seems crazy, but the rules for these systems are set up by the legislatures, and the law's the law. It would take an act of the state legislature to carve out an exception for football coaches, and you can imagine how well that would go over politically.