What's the most reliable way to accumulate retirementresources that will provide about the same income as when you were working and will be indexed to inflation? Go to work for the government, whether federal, state or local. Oregon has one of the most generous pension plans: After 30 years of employment, pensions equal or exceed working compensation per 1999 rules.

If you consider retirement security a measure of wealth, the richest among us may be government workers. Baby boomers with government pensions will exceed the number of baby boomers getting pensions in private industry, if current trends continue. Consumer Reports Money Adviser cites Boston College research showing that while 36% of private sector employees had defined benefit plans in 1992, only 19% have such plans today. That translates to about 22 million private sector employees (19% of 116 million) who get pensions. Virtually all of the 23 million government employees working today qualify for pensions. This does not count members of the military, nor employees of government-sponsored corporations like the post office.

Most federal and many state pensions have inflation- protected cost-of-living adjustments (COLAs). At 65, a pension with a COLA has a funding obligation about 50% higher than a fixed pension-assuming that future inflation is only 3%. So if you wanted to buy an inflation-adjusted immediate annuity with regular monthly payments—like a pension—adding COLA would cost about 50% extra. Practically no private sector pensions have COLAs.

The Best of Everything

As taxpayers, we fund a pension plan that's better than anything we may ever see. As the government increases in size, we'll pay more—and after COLA adjustments, even more. Although politicians run for office with promises to reduce government spending, that almost never means reducing the government payroll. Yet every addition for oversight or a function adds people. I can remember when congressmen had only four people on staff while 10 times that many is not uncommon today.

That's not all. Federal employees enjoy subsidized health insurance in retirement, as do many state and local government retirees. Very few private sector employees have this benefit. It is huge. A retired couple from the private sector pays about $700 a month for Medicare and Medigap policies, and that doesn't cover drugs, copays or most vision, hearing or dental care.

Advantages of Public Service

At one point, many workers were drawn to public service because the generous benefits made up for the low pay. That is hardly the case today: The average government employee now makes about 50% more than the average person in the private sector. In fact, USA Today reported in February that "State and local government workers now earn an average of $39.50 per hour in total compensation....Private workers earn an average of $26.09 an hour....From 2000 to 2007, public employees enjoyed a 16% increase in compensation after adjusting for inflation compared with 11% for private workers."

So there you have it. We've grown a government that not only pays its employees better than the private sector, but also gives them better benefits. We'll pay for those employees not only while they are working, but also at an ever-increasing rate while most of the rest of us in private sector retirement see our incomes cut by inflation.

General Motors, move aside. There's another entity that is going to pay more dearly than you for all the retirement promises it has made. Ah, but it's a sovereign power that has the ability to tax—and that means you and I will be stuck with the bill.

Henry K. Hebeler is the author of J.K. Lasser's Your Winning Retirement Plan and Getting Started in a Financially Secure Retirement. Visit www.analyzenow.com for more.