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Old 07-20-2015, 07:20 PM   #21
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Get the pension plan document , read it stem to stern. I would be surprised to see a private pension plan paying a "Full" pension at 55. Of my 2 pensions, the private DB one had a reduction factor of 56% at 55, rampping up to 100% at 65.
Not many current pensions do. When I first started at my first Megacorp, they had an "85 point retirement" where once your age plus years of service reached 85, your pension benefit would not be reduced. I entered into service at age 21, so I could have hit 85 points at age 53, though they did have a floor of 55 to qualify for that. So at the time I was hired, I could retire without reduction at age 55, with 33+ years of service.

Of course, the 85 point promise evaporated a few years into my service, gone before I was 30. Poof.

That said, the best "hope" (in some ways) might be an early retirement incentive. My dad got one (though this was back in 1992) which added 5 years of service for pension purposes, and continued medical benefits until age 65 as well as giving a year's salary. Few are that generous today, but it's possible that if they had an incentive, OP may qualify, and with less of a reduction than normally required under the plan.
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Old 07-20-2015, 08:10 PM   #22
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Is magacorp getting rid of people? that is about the only time I can think that negotiating would do any good... when you can get included on a buy out. If they want your there, why would they sweeten the pot.

I has a DB plan before the the tech bust. Now I just have my own savings.
If you want to negotiate... what are you bringing to the table the justifies them giving your extra money?
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Old 07-20-2015, 08:42 PM   #23
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[QUOTE=TXRNR;1616099]52 and Ready ---
I am 52 and employed by one of those Mega Corps discussed in other threads. On one hand, I am fortunate to have a defined pension benefit plan which allows "early retirement" at age 55. On the other hand, the job has become quite difficult to show up with a smiling face every morning and I would like to explore leaving earlier than 55. Based on the retirement plan documents however, leaving earlier than 55 would reduce my benefit to slightly less than 50%.
My question to the forum is - Does anyone have any experience negotiating through this type of situation? I am concerned that if I go to HR first, I will put myself in a poor negotiating position.[/

First off - Thanks to everyone for your responses on my first post

Some clarity - Similar to what was shared by Noisy Boy and others -
* My true full pension is available at age 62.
* This is available as "Early Retirement " as defined by the DB plan with a reduction of 4% per year down to 55, or 72% @55 (ERISA regulated).
* This includes some medical benefit support as well.
* I also have the ability to receive a benefit earlier at say 53. The formula however then reduces my benefit by more than 50% of what would be available at 55 (MegaCorp formula).
As mentioned by a few, I may have to wait until they "ask me" to go - As I am not in a position to take such a haircut.

My objective/hope was/is to see if someone had in experience negotiating through this type of situation. The goal being to "take my bags" and move on to other possible opportunities.

Without question, I am grateful for the benefit. There is a reason however that they call them "golden Handcuffs" (or at least Bronze


Thanks
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Old 07-20-2015, 10:57 PM   #24
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What happens with your pension if you leave now at 52 but don't start drawing benefits until you are 55? or 62?
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Old 07-21-2015, 08:26 PM   #25
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Good question - according to the DB plan, I must work until 55 if I wish to receive the full "Early" benefit at 55. Anything prior is significantly penalized. As mentioned in other threads, during layoffs, individuals in the organization have been "bridged".Historically this has only been offered during layoffs - at least to my knowledge.
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Old 07-23-2015, 08:03 AM   #26
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I was in a similar situation. I highly recommend reading and re-reading you pension documents. Get a complete handle on the early out ledger.

I decided to 'wait them out'. It took two years but the financial benefit was huge and we are enjoying it now. The package provided us with several year of net income based on our burn rate and delaying the pension increased the entitlement substantially.

The last two years were not fun but my attitude changed because we were financially independent. Downsizing worked for me. So many firms are shedding senior employees because of cost....salary level, pension liability, high benefit costs. If you are with a megacorp you probably have and even choice of a downside or retirement incentive over the next two years.
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Old 07-23-2015, 04:00 PM   #27
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I would stay the last 3 years. It is leaving too much $ behind. I stayed longer at my job then I wanted due to a pension. But now it is only a not so fond memory & I am glad I did
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Old 07-23-2015, 07:01 PM   #28
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I would stay the last 3 years. It is leaving too much $ behind. I stayed longer at my job then I wanted due to a pension. But now it is only a not so fond memory & I am glad I did
I reckon this depends on other savings and how much you hate your job (or just plain going to work everyday), too.

I did the math for my scenario.

1. retire at 53, claim pension at 53, 30 years service: 56%
2. retire at 53, claim pension at 55, 30 years service: 65%
3. retire at 55, claim pension at 55, 32 years service: 69%

Scenario #3 would be ideal as then, pension will more than cover my living expenses (including some minor luxuries and travel) leaving any retirement savings as gravy.

However, depending on how much I'm able to put away I might consider scenarios #1 & 2 also. Between #1 & 2, it'll probably boil down to health insurance as #1 includes continuous, full health benefits (which some may consider a Cadillac plan) while I'm on my own for #2 between the ages of 53-55.
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Old 07-23-2015, 10:05 PM   #29
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Is there some type of online Pension modeler that HR or your benefits provider provides? I would definitely want to make sure that the answer from the computer matches what you are getting with your hand analysis.

Also please keep in mind that most pensions track two different points in time

- when you separate from the company
- when you start drawing the pension

For most people these are the same date, but for ER's you may wish to analyze the two separately especially if your plan allows this and your itching to leave the Megacorp.

Where DW works, their plan provides for a significant ER subsidy that kicks in after 30 years of service. Phrased differently there is a large pension value spike in going from year 29 to year 30. In her case this drives her to continue to working until this point.

At my employer, I did not qualify for this type of ER subsidy - in fact my DB pensions were frozen. As such my pension would be the same if I left Megacorp after 22 years or after 30 years. The decision then was easy for me.

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Old 07-24-2015, 01:51 AM   #30
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Like most posted, read the plan. I doubt you can negotiate. (I see the OP has done so and is probably wise to wait it out.) I had to meet the rule of 80 to draw early from a 403b, but waited almost two years.
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Old 07-24-2015, 07:06 AM   #31
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My question to the forum is - Does anyone have any experience negotiating through this type of situation? I am concerned that if I go to HR first, I will put myself in a poor negotiating position.
I think this has turned into "check the terms of your plan" which really means you likely have no room to negotiate. Negotiation usually requires some give an take on both sides. And as I think you noted, sweeteners usually happen during downsizing.

My pension plans died in late 2001... so be happy you have one. Review the numbers... and make your decision. But I think you have come to that conclusion already.

good luck
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Old 07-24-2015, 08:24 AM   #32
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Is there some type of online Pension modeler that HR or your benefits provider provides?
We have a tool in our HR system that calculates all sorts of scenarios, including what the lump sum would be vs. annual income (which ranges from roughly 6%-7% of the lump sum, non-COLA). It's definitely fun (and interesting) to play with. Based on the annual income numbers:

Retire @ 62, take @ 62: 100%
Retire @ 57, take @ 62: 84%
Retire @ 57, take @ 57: 63%
Retire @ 55, take @ 55: 49%
Retire @ 54, take @ 54: 32%
Retire @ 54, take @ 62: 62%

Every year worked past 62 increases by about 3%, but just delaying taking past 62 gets no increase.
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Old 07-24-2015, 08:32 AM   #33
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My plan was to take the reduced pension at 55. Then a golden handshake was offered at 49. I could take an immediate pension for 42%. 5 years of consulting with higher pay and extra write offs. Three years later, a divorce changed my plans to now retire at 60. Then I met a beautiful lady who had her own contribution.

Retired at 60 and all is well. So far mega has paid out 23 years of pension and counting!
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Old 07-25-2015, 05:52 PM   #34
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As others have shared, I thought I would as well. I have listed the the results from my online pension calculator. As with other plans, there is a significant penalty to take anything prior to 55. The "early out" at 55 is pretty good, just have to get there.


Retire @ 53, take @ 53: 33%
Retire @ 54, take @ 54: 38%
Retire @ 55, take @ 55: 72%
Retire @ 62, take @ 62: 100%

No ability to leave at 53 but take payment at 55. No additional pension benefit to work past 62. THe LOA someone mentioned sounds like it may be worth investigating. I did not see one in the DB Plan, but will re-read as many have suggested. If nothing else, the investigation will keep me busy as I get closer
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Old 07-25-2015, 09:33 PM   #35
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I guess I was lucky as our system has no age restrictions, just years of service. They also allowed you to buy SS eligible working years since we are not able to draw SS with those years (or at least WEP whacks it hard). The best option for me when I retired at 45 was not a very difficult decision. The choice was either a 75k pension with 2% annual COLA, or a 300k lump sum.


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Old 08-01-2015, 06:27 AM   #36
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Get the pension plan document , read it stem to stern. I would be surprised to see a private pension plan paying a "Full" pension at 55. Of my 2 pensions, the private DB one had a reduction factor of 56% at 55, rampping up to 100% at 65.

Are retiree medical benefits in play ?.....The kicker of my private "Megacorp" pension, was no retiree medical if not at least 55 when separating from employment.......My Public sector pension subsidizes retiree medical at 4% subsidy per year of service, 25 years service to get 100% subsidy.

Never seen a severance package to a non executive , except during a lay-off or when an employee was subject to an egregious actionable act by another employee.

So what percentage of retiree medical assistance do you currently receive? Do you receive, a partial subsidy or is it somewhere around 100%? If it's 100%, what portion is from your private employer versus public employer?


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Old 08-01-2015, 07:26 AM   #37
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I'm 52 and ready to go but will probably hang on until after Christmas, my 53rd birthday. My pension pot is available from 50, taking it in January I will lose a third of it. Fortunately I have decent savings, so ready to pull the plug and live life on my terms.
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Old 08-01-2015, 07:46 AM   #38
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Retire @ 53, take @ 53: 33%
Retire @ 54, take @ 54: 38%
Retire @ 55, take @ 55: 72%
Retire @ 62, take @ 62: 100%
What is the payout if you retire at 53 but don't take the pension until 55?
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Old 08-03-2015, 08:52 AM   #39
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I just turned 53. There is no rule of 80...you must have 30 years and be 55 to avoid penalty. The pension (MegaGovt) pays 2% a year to a max of 70%. I am 53 with 33 years of service. There is a 5% penalty for each year you leave before 55. My options are:

Retire now with 33 years of service: 59.4%
Retire @ 54 with 34 years: 64.6%
Retire @ 55 with 35 years: 70% (max)
Take 1 year leave without pay at 54, but continue to pay both portions of the superannuation premium, and then "officially retire" at 55: 70%.

I'm going with the 4th option.
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Old 08-03-2015, 12:29 PM   #40
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No ability to leave at 53 but take payment at 55.
I would carefully double-check this point. It seems unreasonable. Can it be that you are misunderstanding?
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