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Company annuity question
Old 12-20-2015, 05:19 PM   #1
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Company annuity question

What does it mean
Single life with level income option to age 62 $5300
Single life with level income option after 62 $3500
And of course lump sum option

So does it mean if I started at age 57 to 62 5300. But stops after 62

They just change this format. We have not had this option before



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Old 12-20-2015, 05:36 PM   #2
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First... you should ask your company HR rep who should know what this plan is really.

If I were to guess. This is a single option where you could get payment at some age not identified in your text that pays $5300 (assumed per month) until 62 and then it changes $3500 for the rest of someone's life -- the retired employee. There would be no provision for it to continue for a spouse after the primary individual dies (this is single life).

They likely drop the payout at 62 assuming that you will take SS at that time.

do check with your company.
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Old 12-20-2015, 05:49 PM   #3
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Originally Posted by bingybear View Post
First... you should ask your company HR rep who should know what this plan is really.

If I were to guess. This is a single option where you could get payment at some age not identified in your text that pays $5300 (assumed per month) until 62 and then it changes $3500 for the rest of someone's life -- the retired employee. There would be no provision for it to continue for a spouse after the primary individual dies (this is single life).

They likely drop the payout at 62 assuming that you will take SS at that time.

do check with your company.
My megacorp offered the option of getting a pension that dropped at 62 to provide for a level income for life. You could then choose the option of single live, joint lives etc (note that if married your spouse must approve a single life pension)
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Old 12-20-2015, 06:20 PM   #4
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My megacorp offered the option of getting a pension that dropped at 62 to provide for a level income for life. You could then choose the option of single live, joint lives etc (note that if married your spouse must approve a single life pension)
+1, I think that was what I described. --- unless you meant it went to zero at 62.
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Old 12-20-2015, 08:05 PM   #5
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Thank you. Yes once I steady it a little closer, I see what they are offering. It is no more money just distributed differently. Lump is still my choice. The company pension has no cola inflation would get me along with loss of monies to my heirs


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Old 12-20-2015, 08:25 PM   #6
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Thank you. Yes once I steady it a little closer, I see what they are offering. It is no more money just distributed differently. Lump is still my choice. The company pension has no cola inflation would get me along with loss of monies to my heirs


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Have you done the present value calculation? They should be using the IRS segmented interest rate tables. I would do the calculations and think about how some guaranteed income would fit in with the rest of your income sources before your reject it.
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Old 12-20-2015, 08:49 PM   #7
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I had this scenario and the company's interest rate was 5.25% so I took the pension. I'm afraid if I screw up, at least I have some pensions, COLA or not. I think I read the wsj and it essentially confirmed it was the right decision.


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Old 12-20-2015, 10:15 PM   #8
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I had this scenario and the company's interest rate was 5.25% so I took the pension. I'm afraid if I screw up, at least I have some pensions, COLA or not. I think I read the wsj and it essentially confirmed it was the right decision.


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Of course that rate assumes that you live your actuarial lifespan. Still there's a 50% chance that you'll do just that.
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Old 12-20-2015, 10:31 PM   #9
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My Megacorp (in whose employ I will be for 3 more days!) has this option. The other posters are correct. This provides a higher monthly income than the standard single life annuity until age 62 and the drops down (in our case by ~$700/mo) thereafter. For those taking SS at 62 this provides a more constant income stream than the big jump due to SS that many of us will see at FRA or 70.

I looked at this in my pre-retirement modeling. I don't have the figures handy, but for reasonable values of inflation and life expectancy it was not to my advantage to pursue this option.
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Old 12-21-2015, 10:03 AM   #10
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There should be a "relative value" notice describing how the lump sum and leveling options compare in value to the qualified J&S annuity. Segment rates are also used to restructure the leveling annuity from the normal form of payment.
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