Quote:
Originally Posted by opendoor
The points only determine pension reduction, not the actual amount you're entitled to. If a person only contributes for 10 years, it doesn't matter how many points they have, they'll still only get a pension that's equivalent to ~20% of their salary (~2% for each year of pensionable service). Whereas someone who contributed for 35 years would get 70% of their salary.
The reason they have that points system which incentivizes later retirement (particularly for people with less service) is because someone retiring at 65 is going to collect their pension for 10 years less on average than someone retiring at 55. And because that 10 years represents about 30-35% of the remaining life expectancy of a 55 year old, they reduce the pension by about 30% if you retire at 55 instead of 65 (unless you have enough service to mitigate that).
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Yes, I understand the reduction part for the calculation vs the entitled pension. But the reduction part isn't even that high if you are sitting at 75/85. So as mentioned, the design is poor for younger individuals than older individuals, especially if younger individuals are burning out under IDGAF older individuals who control things.