Comparing Potential Employers Benefits

[Jim1348]

I am 50 years old and currently getting a pension from Minnesota PERA. I want to continue working, preferably in the public sector. Because of the penalty with Minnesota PERA, I am better off selecting a state or federal employer., or at least not a Minnesota PERA contributor. Anyway, as I try to compare and contrast I have a couple of questions:

1) As jobs are compared, if all other factors were the same or very similar, except one had a defined benefit pension, but the other simply had a defined contribution plan, approximately how much more per hour would an employee have to earn at the job with the DC plan vs. the DB plan? And, of course, I realize that is like picking the door or the curtain, since we don't know how long any of us are going to live, each DB and DC plan is different, etc. For the sake of argument, assume whatever the federal plan is for DB plan vs. private sector job with only a 401k plan. (Assume no employer matching for this comparison.)

2) Again, as jobs are compared, if all other factors were the same or very similar, except one has employer medical and dental coverage, but the other is a contract job with no employer medical and dental coverage, approximately how much more per hour would an employee have to earn make them somewhat more comparable? For the sake or argument, assume whatever the federal health plan is for medical and dental coverage here, too.

And, yes I know, this really is like comparing apples to oranges, but I also just don't think it is fair either to say any job with any medical, dental coverage, and defined benefit pension is better than any without. If anybody has any idea of how to best compare these factors, please pass along whatever words of wisdom you might have.

[MikeG]

Google "Annuity Calculators". A lot of your questions depend on your current age and age at retirement and life expectancy. A "defined benefit plan" is worth a heck of a lot more to a guy that can retire at 40 vs. the guy retiring at 70 with the same monthly benefit for life. Once you find the annuity calculator and put in your age, you can find out the value of each of the two options (i.e. convert monthly defined payments to a "lump sum" and convert lump sums into monthly payment. Incidentally, I believe it's the same type of calculator that pension plans use to figure out the value for buying time into the plan.

[jvale00]

If you decide to stay in LE (as either an officer or police administrator, depending upon your previous experience), you can google the FERS annuity calculator to help assist with this. If you chose to pursue a career as VA Police Chief or Physical Security Specialist with the FED, then the retirement is basically a three prong system. Your TSP, which is employer matched, (I'm taking a beating in it Mr. Obama), the Social Security System, and FERS. Also, you will need to know or guesstimate your 3 year high salary. Hope that helps.