General Retirement System

A General Retirement System encompasses various pension, annuity, retirement, or similar funds or systems established by a state or political subdivision for employees. These systems are designed to provide financial support during retirement for employees who have served the state or local governments. It is important to note that systems covering positions tied specifically to public transportation operations are excluded from this definition.

Examples

1. State Employee Pension Systems:
These are established by individual states to provide pensions for their employees. Examples include the California Public Employees’ Retirement System (CalPERS) and the New York State and Local Retirement System (NYSLRS).

2. Municipal Pension Funds:
These funds are set up by cities or other political subdivisions to cater to their employees, such as the Chicago Municipal Employees’ Annuity and Benefit Fund and the Los Angeles City Employees’ Retirement System (LACERS).

3. Hybrid Retirement Systems:
In certain cases, retirement systems may include both defined benefit and defined contribution programs. An example is the Florida Retirement System (FRS) which offers a mix of traditional pension plans and investment plans.

FAQs

1. What is covered under a General Retirement System?
A General Retirement System covers pension, annuity, and retirement funds established by states or political subdivisions for their employees but excludes those tied specifically to public transportation system operations.

2. Are private-sector employees included in General Retirement Systems?
No, General Retirement Systems are specifically for state or political subdivision employees.

3. Can employees contribute to their General Retirement System funds?
Yes, in many systems, employees contribute a portion of their salary to the retirement fund, often matched by contributions from the employer.

4. How does a General Retirement System differ from Social Security?
General Retirement Systems are specific to states or local governments and operate independently of federal programs like Social Security.

5. Are these retirement systems guaranteed by the state?
The guarantees depend on the specific regulations and financial health of the fund. Some states may ensure certain benefits, while others might not.

Pension:
A financial arrangement to provide individuals with an income when they are no longer earning a regular income from employment.

Annuity:
A long-term investment issued by an insurance company designed to help protect individuals from the risk of outliving their income, through periodic payments.

Public Pension:
Retirement plans mainly for government employees, which can include federal, state, and local government plans.

Defined Benefit Plan:
A retirement plan where employee benefits are computed using a formula that considers several factors, such as length of employment and salary history.

Defined Contribution Plan:
A retirement plan in which the employer, employee, or both make contributions on a regular basis, often matched by employers to a certain rate.

Online References

CalPERS: The California Public Employees’ Retirement System official site for resources on state employee pensions.
NYSLRS: The New York State and Local Retirement System, providing information on retirement benefits.
Pension Benefit Guaranty Corporation (PBGC): The federal agency that protects the retirement incomes of over 35 million American workers.

Suggested Books for Further Studies

The Pension Answer Book by Stephen J. Krass - A comprehensive guide detailing various aspects of pension plans in the United States.
Fundamentals of Private Pensions by Dan M. McGill and Kyle N. Brown - Explores the concepts and intricacies of private and public pension systems.
Retirement Systems and Taxation by Peter T. Scott - Understanding the intersection of retirement systems and taxation.

Fundamentals of General Retirement System: Public Administration Basics Quiz

### Does the General Retirement System include funds for public transportation employees? - [ ] Yes, it includes funds for all state and local government employees. - [x] No, it excludes funds for public transportation employees. - [ ] Only if the public transportation operates within city limits. - [ ] Only for those who service municipal transport departments. > **Explanation:** The General Retirement System specifically excludes any fund or system that covers only service performed in positions connected with the operation of its public transportation system. ### What kind of benefits can employees expect from a General Retirement System? - [x] Pensions and annuities - [ ] Free transportation services - [ ] Only health insurance - [ ] Job training programs > **Explanation:** Employees covered under a General Retirement System can expect financial benefits such as pensions and annuities. ### Are private-sector employees covered by General Retirement Systems? - [ ] Yes, if they work closely with the government. - [ ] No, it varies by state. - [x] No, these systems are specifically for state or political subdivision employees. - [ ] Yes, if they contribute to the system. > **Explanation:** These systems are specifically established for employees of the state or political subdivisions and do not cover private-sector employees. ### What distinguishes a General Retirement System from Social Security? - [x] It is specific to states or local governments. - [ ] It is a federal program. - [ ] It doesn't require contributions from employees. - [ ] It provides health insurance rather than retirement benefits. > **Explanation:** Unlike the federal Social Security program, General Retirement Systems are specific to states or local governments. ### Who administers General Retirement Systems? - [x] States or political subdivisions - [ ] The federal government - [ ] Private insurance companies - [ ] Individual employers > **Explanation:** General Retirement Systems are administered by states or political subdivisions. ### Can contributions to General Retirement Systems come from both employees and employers? - [x] Yes - [ ] No, only the employer contributes. - [ ] No, only the employee contributes. - [ ] No, it is funded through state taxes only. > **Explanation:** Contributions often come from both employees and employers. ### Are retirement benefits from these systems guaranteed? - [ ] Yes, they are always guaranteed. - [ ] Not usually. - [x] It depends on the state regulations and financial health of the fund. - [ ] Federal law guarantees them. > **Explanation:** Guarantees depend on the specific regulations and financial stability of the retirement fund. ### Do General Retirement Systems include both defined benefit and defined contribution plans? - [ ] No, they only include defined benefit plans. - [ ] No, they only include defined contribution plans. - [x] Yes, they can include both types of plans. - [ ] Yes, but only for federal employees. > **Explanation:** Some General Retirement Systems may include both defined benefit and defined contribution plans. ### What type of retirement fund benefits specifically fall under the category of General Retirement System? - [ ] Health insurance - [ ] Job placement services - [x] Pensions, annuities, and similar funds - [ ] Housing subsidies > **Explanation:** The primary benefits are financial ones such as pensions, annuities, and similar funds. ### What is one primary characteristic that excludes a retirement system from being categorized as a General Retirement System? - [ ] Its ties to private sector employers - [x] Its connection to the operation of a public transportation system - [ ] Its offering of health benefits - [ ] Its funding through federal taxes > **Explanation:** The system is excluded if it covers only service performed in positions connected with the operation of its public transportation system.

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General Retirement System