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Originally Posted by ChicagoChicago
^^^... It used to be that when you worked for the state or federal government, you were paid less on the front end with the understanding that your retirement was secure. Now people are paid very comparably with other professions and still have that silver parachute waiting for them when they retire at 28 years. ...
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For deferred compensation (which pensions are a type of) to really make financial sense, the source of the future payments has to be a high-growth source, or at least grow faster than the the future value of money. In business, it can be perfectly reasonable to plan for growth that's faster than the future value of money. But for government to plan on their revenue stream growing faster than the future value of money basically means they're planning on raising taxes, or they're planning on just the pension portion growing faster, which means they'd have to reduce other services. Those are really your only two options with deferred compensation in the form of pension - raise taxes or reduce other services.