Back in July 2004 I recall reading an ad in a local newspaper placed by someone who held regular classes to teach people how to get jobs with the State of California. The ad said “Land a State Job and Become an Instant Millionaire.” I read the ad closely, and kept a copy.
Space and copyright laws prevent publishing the entire text of this ad, but it was factual, and filled with comments like the following: “The California state government provides a “defined benefit” pension plan to each of its employees. Such “defined benefit” pension plans are far more generous than any 401K or defined contribution pension plan available from any other employer in the state! In fact, the plan is so generous that it makes the average state employee a millionaire after only 22 years of work!”
In this ad and others, written with an astonishingly complete lack of irony, the writer explained in detail how much an employee would have to save every year in order to acquire sufficient wealth to retire with an annuity this generous. In other ads, the writer explained how many days off California’s state workers receive - holidays, personal days, vacation, comp. time, and the “9/80″ program where they get yet another day off every two weeks by working nine hour days for nine working days in a row. Show me an example of a conscientious salaried worker in the private sector who doesn’t work nine hours a day! In all, most state workers get between 50 and 75 paid days off per year. There is a staggering cost for all this.
As you look at your plummeting 401(k) balance, think of your overlords, the public employee unions, to whom you must tithe 10% of your income. If their pension funds drop, they don't care. Their retirement income is guaranteed and you have to make up the difference.