Why Public Pensions are So Rich (Wall Street Journal)

Complex formulas obscure the fact that public pensions typically are much more generous than 401(k)s, making the situation ripe for misleading claims, write Andrew G. Biggs and Jason Richwine of the Wall Street Journal. A case in point is the Illinois Teachers Retirement System (TRS), which insists that, because Illinois teachers don't participate in Social Security, the average teacher's pension of almost $43,000 "cannot qualify as 'too generous.'" The 2010 annual report for the TRS actually shows that the average teacher who retires today after 30 to 34 years of service had final earnings of $84,466 and collects a pension of $60,756 a year, plus annual cost-of-living adjustments, providing an income higher than 95% of retirees in Illinois.