How does our pension plan compare to other State pension plans? The answer is our pension is one of the better ones, assuming you're Tier 4 and are covered by Social Security (SS). Even Tier 5 compares favorably with only a 3% contribution rate. However, for those under Tier 6, it falls close to the middle of the pack.There are some States that have it as good as us, like Utah, Delaware, and Virgina but none have it better than New York. In my opinion, New York's pension calculation is one of the most generous giving a twenty-five year employee a 50% pension and add that to the Social Security check and you have about a 75% replacement of your working salary, that's a pretty secure retirement.
While the pension multiplier for some states are higher than New York's (2.0%), many of them are not part of the Social Security system and even using the highest multiple of 2.5% used by these States for a twenty-five year employee, the yearly difference would only be $12,500, less than half of what one can expect from Social Security ($26,000). Furthermore, all but Nevada requires large employee contributions ranging from 6% (Connecticut & Texas) to a whopping 13% in Missouri. Even California who many consider having the best pension system in the country, requires an 8% employee contribution with no Social Security coverage. I'll take New York's pension system anytime over California's or any other State's for that matter.
The table above compares all the states pension calculations, except Alaska since they do not have a defined benefit pension plan.