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It says Idaho, so I looked up the Public Employee Retirement System of Idaho. They have a doc on Early Retirement. Looks like the fairly standard 'reductions depending on formula' business. One might quibble with the details, but it seems plausible. The base rate being 2% x [Years of Service] is pretty generous, but it looks like their rates are kinda steep. I don't have historical rates, but that particular awfulness has been a feature of essentially all public and private pension plans over the past century. At least it appears that when they're increasing contribution rates, they're doing it across the board, rather than something like, "You were hired thirty years ago, so you can still continue paying 1%, while everyone else has to pay 8%."
To a first approximation, it's not clear to me that they did better with the pension plan compared to just taking the cash and plowing it into the market. That seems to be pretty typical of most pension plans I've seen. A bit of a hit on return, but lower risk (the biggest risk being actually making it to retirement with them). Actually figuring out whether that tradeoff is a good deal for any particular individual/plan requires some details about the particular plan and, uh, assumptions.
I also did a few calculations concerning the $127k amount reported in the article. Given what's here about the Idaho pension, you again need some, uh, assumptions, but the ballpark numbers I get (including a discount for a woman's pay compared to a man's (not equal work) and a further discount for her having fewer years of working), the ballpark two-income high-3.5 household total seems at least plausible when you look at typical state salary public records. It doesn't appear to be likely that it's one of those situations where they scam out a half-mil of overtime right at the end to juice the pension.
I'm not particularly sad that I haven't done my entire career as an Idaho public employee. It doesn't seem like nearly as good of a scam as a whole host of other stuff. But then again, maybe he was a bad civil engineer and made terrible road designs that were no good for the people of Idaho; who knows?
The discipline of actually saving and investing automatically goes a long way.
Even property's quite similar for a lot of older people. It isn't necessarily that the returns were massive compared to just buying the proverbial index, but a mortgage enables you to get a bunch of leverage and is the right sort of recurring annoying cost that kinda forces the average person to actually keep sticking their money into the system. Plus being relatively hard to tap the equity spontaneously.
Also the half million capital gains tax exemption for a married couple selling their primary residence. Quarter million for single people.
An elderly couple selling their house and downsizing are getting an incredible cash payout with little or maybe no taxation.
In Australia the house you live in doesn't count towards your pension eligibility which is equally crazy, so a lot of people of retirement age will totally consolidate their net worth into their place of residence (and durable purchases like a caravan/new car) in order to get maximum payment from the social security equivalent which otherwise tapers off quite quickly above a couple hundred k in assets.
The pensions the OP refers to are pensions provided as compensation for working, not income support like Australia's age pension. It doesn't matter how rich you are, you earned them and still get them. The US's old age program, Social Security, also does not take assets into account, though payouts are reduced if you earn income while eligible.
There have been attempts to means-test Social Security, but they're probably political non-starters until most of the Boomers die. Maybe even after, because once Social Security is means tested it goes from a program for everyone to a traditional welfare program that only the poor can use, and cutting it would be within the Overton window -- something those who would like to means test it would not like at all.
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