| Most people know that a significant gap exists | | | | fluctuate along with the economy. Private sector |
| between government pension plans and private | | | | plans do not offer the guarantees that the |
| sector plans. This gap extends not only to the | | | | government plans offer. |
| existence of a plan, but also to the age at which | | | | Government Benefits Versus Private Sector |
| the individual will be able to retire as well as other | | | | Benefits |
| specific benefits such as ones related to medical | | | | In general, many private sector companies are |
| needs. | | | | reluctant to pump lots of money into retirement |
| In fact, the majority of government workers will | | | | or pension plans for their employees simply |
| be able to enjoy retirement effortlessly thanks to | | | | because they do not have the funds to do so. |
| their generous plan. Workers in the private sector | | | | They cannot draw upon a large tax base nor do |
| typically fall far behind in this particular facet of | | | | they have limitless funds. In the past year or so, |
| their careers. It isn't considered fair by many, | | | | private pension funds have decreased |
| especially those individuals who are not employed | | | | tremendously due to the poor state of the |
| by either a state or federal government. | | | | economy. |
| Government Service and the Retirement Age | | | | Pension plans are earning less and therefore, they |
| In fact, most government workers will be able to | | | | are decreasing in value. Since the benefits are |
| retire prior to reaching the retirement ages of 62, | | | | typically contribution based and not guaranteed, |
| 67, or 72. Typically, a government worker earns | | | | the employees do not have the same sense of |
| his full benefits within 30 to 35 years at the most | | | | security that government employees have. |
| and is then able to stop working while collecting his | | | | Additionally, many private sector companies are |
| benefits. In some cases, this figure could be lower, | | | | scaling back on their contribution to their |
| depending on the particular government office | | | | employees' pension plans due to the enormous |
| that is involved. | | | | liability that it has come to pose for them. Hence, |
| Government Benefits for Retirement | | | | the benefits of these plans are decreasing in size |
| Additionally, since many government pension plans | | | | as the years go by. Many individuals working in |
| are defined benefit as opposed to define | | | | the private sector do not even have access to |
| contribution plans, the benefits are typically | | | | employer-offered pension plans, but must instead |
| guaranteed to equal a certain financial number | | | | set one up on their own. |
| upon reaching retirement status. Moreover, most | | | | Government Benefits and the Recession |
| state and federal sectors put larger sums of | | | | In many states, as the recession takes its hit on |
| money into their pension plans than most private | | | | the earnings for government retirement funds, |
| sector businesses. Therefore, their plans will lead | | | | lawmakers are considering tax increases within |
| to larger pay outs simply because they have | | | | the private sector in order to make up for this |
| been designed to do so. | | | | short fall. Hence, the private sector takes a |
| Retired civil servants often receive a larger | | | | double hit since their own retirement plans have |
| financial payout than private sector employees do. | | | | fallen in value. Nonetheless, the system is designed |
| This is partly because of the way in which | | | | to protect the benefits of government workers |
| government pension plans are structured. They | | | | and as long as the government is capable of doing |
| are designed to provide a certain benefit by the | | | | so, their employees will continue to reap the |
| time that the civil servant retires. Typically, | | | | benefits. It is important to note, however, that |
| retirement benefits in the private sector are linked | | | | not all states have fallen into this scenario. |
| to the employee's contributions, which often | | | | |