I want a New York City Municipal Job paying 40K. This may seem like a crazy statement because most of my friends won’t even work for less than six-figures. And New York City municipal employees have a stigma for being lazy, minimalist, unionized and very job secure. I once heard a story about an employee who worked for the city and drove the truck to New Jersey to pave his neighbor’s driveways. He was not fired but as his punitive reprimand he was transferred to another borough.So I asked my friends what would it take to be fired for a city job. And they said you would have to be convicted of a felony. But then look at the cop that raped Abner Louima with a plunger he’s a firefighter now. Someone said you would have to kill someone. But even that is incorrect because look at the cop who shot Sean Bell over 50 times, he’s still on the police force.
I figured that if I got a city job for 50K , the fringe benefits would actually exceed that so I was actually making six figures a year. You see the city has what my professor says is the whole bain of pension accounting, the defined benefit plan, where you are guaranteeded a specific payment upon retirement. Many employers are doing away with these because they are not sustainable, put the burden on the employer to pay benefits long after the employee has retired, have high administrative costs and with the recent tumultuous market very unpredictable. So there is no surprise that there has been a lot of talk of pension reform.
I believe this another sense of entitlement of a pension fund that is unsustainable. Of course ask any city employee and they will say they are underpaid. But the truth is for the contributions
Here are the facts, most city employees contribute 4.85% of their salary for the first ten years. After ten years employees only contribute 1.85% and the city matches it.
If you contributed a fixed amount every year for 30 Years, the future value of this annuity is a factor of 66.43885.(n periods = 30, 5% interest) For an annuity of $3685 that would grow to $244,827, an annuity of $4795 would grow to $318,574. Since you contributed between $3685 and $4795, the ending balance of $267,922 makes sense.
Assuming you get 30% of your final pay you will receive $36K per year, which would last you 7 years before the city has to get money from somewhere else. However 30 years of service gets you about 50% of your pay which means the pension would only last you 4 years before the city has to get money from somewhere else.
Most people take a city job because they want job security and set work hours. It is mostly a job for those who want to achieve mediocrity. But in this violatile market. Get me a job please with the city, my calculations show this is the best deal assuming two things:
1. Your pension is guaranteeded by state constiution. 2. they don’t change Tier 4.
I’m pretty sure my calculations are correct. And this guy’s blog echoes that sentiment. He claims he was the executive director of the NYCERS (New York City Employee Retirement Service) from 1990-2005. Of course my readers will say how can Dick possibly be right? He is after all unemployed…..