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Comparing Public Pensions; State of Minnesota MSRS Vs. Federal

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  • Comparing Public Pensions; State of Minnesota MSRS Vs. Federal

    I have been looking at some non-sworn jobs recently, since I retired at the end of December. Because I am drawing a PERA pension, I have avoided Minnesota cities and counties because of the penalty. Anyway, as I compare private sector to state and federal, it clearly looks as if the state and federal jobs are more lucrative because of the pension. What I am trying to determine now is how pensions from MSRS compare to those of the federal sector. Again, I am not necessarily referring to sworn law enforcement officers jobs in either case, but rather pensions in general.

    Does anybody happen to know, all other factors considered equally, which pension is pays more upon retirement. Say, for example, a person worked only 10 years from age 50 to age 60 and was earning a modest $20 per hour upon retirement. Would a person be eligible to retire and what would be the approximate monthly annuity? I am pretty new at this penion stuff, so I am sorry if the questions seem elementary.

    The other thing that I am still unclear about is the Social Security factor. Since I was a member of PERA Police and Fire, I am not vested in Social Security. I understand that you need 40 quarters, or the equivalent of 10 years of work to be eligible. However, I have also been told that there is a reduction in benefits if you receive a public pension. What isn't clear to me is if there is some sort of minimum Social Security benefit while drawing a public pension? I have been working a private sector job, but it seems to me that if I will never get a benefit from paying into Social Security, I really ought to go back to work somewhere in the government sector that isn't a PERA covered employer.

    So I guess what it boils down to is if I look for a Minnesota state job or federal job, which is better from the retirement standpoint? At first glance, it looks like the FERS Basic Annuity Formula is 1 % or 1.1 % while the MSRS formula is 1.2 %, but then moves to 1.7 %. Based on that fact alone, it would seem as if the state pension is better, but I need to read up on this more.
    Last edited by Jim1648; 05-04-2011, 12:21 PM. Reason: Details

  • #2
    FERS retirement is different if you're LE. Under FERS LE you get 1.7% of your averaged high 3 years salary for your first 20 years. Any qualified service after the 20 year mark is calculated at 1% which would include any military time you bought into the system with. Unless you progress up to a GS-15 with some step increases it's really not that great of a pension system but it beats living on Social Security.

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