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re: Alabama state retirement system?
Posted on 12/31/15 at 9:35 am to Colonel Flagg
Posted on 12/31/15 at 9:35 am to Colonel Flagg
quote:
I have a hard time believeing these systems let someone count these ridiculously high salaries in the system. That would be the dumbest thing ever.
Are the contributions of the employee capped? If not then the high amounts would be justified.
Also for coaches, how much of their pay is derived from the state funds and how much from private sources, e.g. boosters, including under the table amounts, appearance fees, etc.?
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Posted on 12/31/15 at 9:36 am to Gray Tiger
when does it go BK? how can they afford to pay people for nothing ?
Posted on 12/31/15 at 9:38 am to Colonel Flagg
Someone said it before, but it is only the portion of the salary paid by actual state funds, not athletic department funds.
Think about it this way too-
Say Steele makes 400K in state funds for 10 years. He himself will have paid in at minimum 200K, with his employer putting in another 240K. At age 60, he could begin to draw his retirement benefit, the max he'll get would be $6,700 per month for the rest of his life. Without considering any investment gains that the retirement system was able to yield, it would take almost 7 years worth of benefits to exhaust just the principle of what was actually paid in on his behalf.
Think about it this way too-
Say Steele makes 400K in state funds for 10 years. He himself will have paid in at minimum 200K, with his employer putting in another 240K. At age 60, he could begin to draw his retirement benefit, the max he'll get would be $6,700 per month for the rest of his life. Without considering any investment gains that the retirement system was able to yield, it would take almost 7 years worth of benefits to exhaust just the principle of what was actually paid in on his behalf.
Posted on 12/31/15 at 9:39 am to jb4
The state systems will never go bk. You see municipal systems that will, but a US state has too many resources at its disposal to burn its pensioners.
Remember, they're not paying everybody at once.
Remember, they're not paying everybody at once.
This post was edited on 12/31/15 at 9:41 am
Posted on 12/31/15 at 9:41 am to AUjim
quote:If not fully vested in our system and you leave, you have no choice but to withdraw from the retirement system (the portion you contributed). If you rejoin the system, you can buy back those years by paying back all that was withdrawn plus interest for those years you were out.
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 think the big question regarding Steele is how much of his $1+ million salary is paid by the state and how much is paid through private foundation money. I would think only the part paid by the state would be applied to the retirement system calculations because the Auburn contribution toward retirement would be quite large on the full $1mm+.
Posted on 12/31/15 at 9:41 am to LSUTigersVCURams
Posted on 12/31/15 at 9:42 am to Monticello
quote:
It caps out at like 120k a year or something like that. In other words, Saban won't be getting 3.5 million a year the rest of his life in retirement from the State of Alabama.
The retirement plans for Head Coaches in Alabama are paid based on their base salary. Most of AUs and UA HC salaries are paid by outside the state funding sources. RSA is the richest richest state retirement system in the country (over $30B), so they can afford to be so generous.
Posted on 12/31/15 at 9:45 am to Irons Puppet
are they going to build anymore golf courses? surprised they never put one around U of Bama or the Mercedes plant
Posted on 12/31/15 at 9:48 am to Diamondawg
quote:
If not fully vested in our system and you leave, you have no choice but to withdraw from the retirement system
Yikes. We can leave ours for up to 5 years after initial departure, picking up right were we leave off if we come back.
Posted on 12/31/15 at 9:49 am to jb4
quote:
are they going to build anymore golf courses? surprised they never put one around U of Bama or the Mercedes plant
Politics played a big part in where those courses are built. Most of the land is donated to the State, with the rights to sell home lots going to the surrounding property owner.
Posted on 12/31/15 at 9:56 am to jb4
quote:
when does it go BK? how can they afford to pay people for nothing ?
Thus far (surprisingly), the Alabama legislature has left the pension system alone and not raided their funds like other states. The result is that despite the terrible investment economy of recent years, the system is still very well funded.
Further, two years ago the plan was significantly altered to reduce the future load. In the past, at 25 years of service you could retire and get a 50% pension for the rest of your life regardless of your age. If you started with the state right out of high school at 18, you could retire at age 43 and easily draw for more years than you worked. Employees hired after 2013 can't start drawing a pension until they're 60 no matter how many years they've worked.
It will obviously take a couple of decades to weed out most of the Tier 1 people, but this change will make a bigger and bigger difference each year.
In a nutshell, nothing in life is guaranteed but unless the legislature puts their hand in the cookie jar, a Retirement System of Alabama pension is about as close as it gets to a safe investment. It is the sole reason I've put over 28 years in the system instead of chasing higher salaries in the private sector.
Posted on 12/31/15 at 10:04 am to JustGetItRight
Yep.
However, I did hear Mike Hubbard on the radio 2 days ago telling the interviewer that the legislature was going to have to deal with retirement again during the next session...worries me.
However, I did hear Mike Hubbard on the radio 2 days ago telling the interviewer that the legislature was going to have to deal with retirement again during the next session...worries me.
Posted on 12/31/15 at 10:06 am to jb4
Granted, Illinois is a terrific shitshow, but if the Illinois state pension system burns its pensioners I will personally meet you at the nearest Sonic to your house and let you punch me in the face.
Posted on 12/31/15 at 10:11 am to dcw7g
*Steele was in the first year of a two-year, $2 million contract at LSU, and this report by nola.com suggest that Auburn offered him a three-year, $4 million contract.
*Also, Steele’s brother, Jeff, is an associate athletic director at Auburn.
*Also, Steele’s brother, Jeff, is an associate athletic director at Auburn.
Posted on 12/31/15 at 10:11 am to AUjim
quote:
However, I did hear Mike Hubbard on the radio 2 days ago telling the interviewer that the legislature was going to have to deal with retirement again during the next session...worries me.
I'm not worried about them messing with any Tier 1 employees. What they really, really, really want to do (for understandable reasons) is to get away from a defined benefits system and go to either a completely defined contributions or hybrid system.
As a taxpayer, that makes complete sense. As a state employee and manager who hires people, it is something of a problem. The state hasn't had a cost of living adjustment in 8 years. Salaries have fallen behind the private sector in a lot of fields, so retirement is one of the few carrots left. It is getting really hard to attract and retain quality employees.
Posted on 12/31/15 at 10:22 am to JustGetItRight
Another thing you have to worry about is this: These state pensions systems have a HUGE amount of cash (many billions), and a lot of them including Louisiana (don't know about Bama) manage the money in-house. Do you think Wall Street wants to be collecting fees from that money? frick yeah, they do. And you, the pensioner, will be the one on the hook for those fees if the state ever gives up control of the money to the banks. Not a huge thing, but something that could end up costing you some money over the long term.
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