No wonder some states are nearing bankruptcy. In the case of California they offer a retirement program to their State workers called a 3 for 50 plan.
For each year you work you are guaranteed 3% of your annual income for each year of service when you retire. You can begin to draw retirement at age 50.
- Hypothetically, if you are 20 when you take a state job and work for 30 years, you can retire at 90% of your salary at age 50.
- Additionally you can leave your career and start a new one while receiving 90% of your salary.
- Not only does the employee collect monthly benefits, they also have the proceeds from their retirement account, including contributions made by their employer.
- In most instances Cadillac health care policies are also included.
This type of lavish retirement is not limited to California. Many states and unions offer this lucrative package to employees.
No wonder General Motors went bankrupt. Their benefit package was structured in a similar manner. How can you possibly be profitable when you are paying for the prior workforce as well as the current one?
- If you ever visit a State or Federal office you have witnessed first hand the work ethic of employees. They are also protected from being fired by very powerful unions.
- Once you get yourself hired on - you only have to show up and look busy. You are insulated from being fired and on the way to retiring in style.
Once an employee retires from the work force the payroll of the department does not go down. It actually goes up. Traditionally the replacement employee is receiving an equal compensation to fill the vacancy.
- Now you are paying 2 for 1. You are paying two employees for the same job. If the first employee who retired lives beyond age 80, and the second retires at 50 - you now are paying 3 for 1.
Something needs to be done. Not only is our federal government taking on unsustainable debt, so are our States and union shop companies.
Add the fact that most State retirement funds have been borrowed against and plundered by lawmakers. The same with Unions.
They have made loans and invested in projects that ultimately went belly up. The money simply is not on deposit to even earn interest or pay the monthly obligations.
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