Your pay has been the subject of debate for the past couple of months, resulting in the President proposing and Congress passing a two year pay freeze.
But now the pay debate is turning to state and local government employees – some who receive outrageously generous retirement packages – in one case, to the tune of half a million dollars.
States are now turning to the federal government for a model of retirement benefits reform. A quarter century ago, the federal government adopted a hybrid pension system – a combination of a fixed pension, social security and a 401(k)-type plan.
The norm for state and local employees now is a defined benefit plan that guarantees a certain pension payment, immune from Wall Street’s performance.