The calculation includes inflation. $20k in 1979 is $70k today.
It’s also the classic tradeoff of government work: lower salary than you could get in the private market, but retirement equivalent to a higher salary than you could get. Compelling only if you are sufficiently long term oriented.
I ran a few scenarios--your numbers are not correct.
Start at age 20, making $15,000/y, increasing 5% per year. (Salary at retirement over $100k/y)
Assume annual savings rate of 15%
8% return
Retire at 60.
I get around a million dollars saved at age 60 (i.e. today). Not enough to buy an annuity that pays out over $100,000/y. Off by a factor of 2 or so, I think.
And starting salary 40 years ago was probably under 15k, 8% consistent compounded returns are really good, the other retirement benefits besides the pension etc.
Your calculations are a bit off, since even $75k * 0.15 * 40 = $450k (ie, not taking into account salary increases or returns).
Also, $75k is a lot more that most people make. From what I can find, that would be ~85th percentile of personal income, or around the 60th percentile of household income.
Edit: Some representative (although a bit outdated) sources:
101k a year in income, more than $2m in total balance.
Chicago police officers make $65k within 18 months [0]. If $75k is a high estimate, it’s not by a ton. Government competes for professional/managerial/educated employees as well.
That doesn’t seem unreasonable.