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To: businessprofessor
The error in your analysis is your estimation of how many years the employees work for the government. With your typical federal employee becoming an employee at 35, he or she is going to have only 20 to 25 years in service when they retire.

Your 16 year old brother in law who got his state job already, will have 50 years in when he retires, with disability, at 66!

The difference is the type of jobs the federal government has ~ auditors, accountants, lawyers ~ and the type of jobs the state governments have ~ highway work crews, sign painters, lots and lots and lots of "board members".

A comparison of the systems, by themselves, doesn't give you the answer on aggregate payout to the retirees.

118 posted on 06/15/2010 11:33:37 AM PDT by muawiyah
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To: muawiyah

I am not sure that your assumption about the federal workforce is correct. I have not seen data about the federal workforce but it is probably similar to the white collar workforce in Colorado. I have divided my analysis into 3 groups (admin, professional, and non professional). I have samples of university and K-12 workers in Colorado.

You are correct that benefits in most plans sharply increase after 25 years with 30 years as the sweet spot. However, I have done analysis for non long term employees with an average of 18 years of service. There is still substantial surplus deferred compensation for this group. Higher levels of surplus deferred compensation are earned by the more educated groups (admin and professional) so the federal workforce may receive higher levels of surplus deferred compensation if its education level is higher. I doubt that the federal workforce has a general higher level of education than the university and K-12 workforces in Colorado however.


120 posted on 06/15/2010 11:44:13 AM PDT by businessprofessor
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