how is the health of your pension?

[97guns]

my brother retired around 4 years ago from the grocers union, he has a nice pension of $2800/ month with full medical. they are taking 100% of his medical away and i am afraid they will be making more cuts in the near future. we already see munincipal and gov't pensions under attack, just wondering how your pension is doing.

 

[Midpack]

Retired 2011. Like most in the private sector, my pension was frozen in 1994 (far below what anyone could live on) after I had 17 years under my belt, and retiree healthcare was taken away for all future retirees in 1995. Only good thing I can say is I lost it long before I retired so there was no surprise.

Awful situation for anyone very close to or especially already in retirement like your brother...sorry to hear what happened to him. The public sector seems to be going through what began in the private sector years ago, and everyone needs to be prepared for some reduction in case it does happen. Retirement is decades long for most people, a lot can change over 30 years or so.

 

[rescueme]

I never had a pension (private sector), so I never learned to plan on any retirement income, and saved/invested accordingly on my own (along with DW).

FIL/BIL however (different companies) had union pensions. Both were greatly reduced when both companies shut down. For my FIL, it was after he retired; for my BIL, it was right before his planned retirement.

Pension assets were turned over to the PBGC and I know that both received a much less benefit than expected. Didn't affect my FIL as much, since he had been retired many years when his former company shut down; however for my BIL, it resulted in his still wor*ing three days a week at a part time job to make ends meet and he's in his late 60's.

 

[grumpy]

There were a lot of frustrations and drawbacks to a career as a federal employee. But ... my Civil Service Retirement System (CSRS) pension is very generous, COLA'd, includes the gov't paying 72% of my health insurance premiums and DW would receive 55% of what I get if I predecease her.

 

[Nodak]

There were a lot of frustrations and drawbacks to a career as a federal employee. But ... my Civil Service Retirement System (CSRS) pension is very generous, COLA'd, includes the gov't paying 72% of my health insurance premiums and DW would receive 55% of what I get if I predecease her.

+1

 

[Gearhead Jim]

my brother retired around 4 years ago from the grocers union, he has a nice pension of $2800/ month with full medical. they are taking 100% of his medical away and i am afraid they will be making more cuts in the near future. we already see munincipal and gov't pensions under attack, just wondering how your pension is doing.

His retiree medical was probably a negotiated benefit, and in tough times it got negoiated away.

The good news/bad news about his pension is that, generally, pension benefits already earned can not be reduced unless the plan is terminated and turned over to the PBGC.

I worked for United for 36 years, including the bankruptcy. My current PBGC pension was recently bumped up to a "final" number that is 28% of what it was supposed to be. Fortunately, we also had a good "defined contribution" program and some large additional payments were made to people in certain age groups like myself.

The older you are, and the smaller your pension was supposed to be; the less hit you take.

 

[Alan]

97guns, sorry to hear about your brother, that is really tough.

I have now had the 2011 funding statements from all 3 of my US and UK private pensions. The US one is funded to a level of 91% and the UK ones are funded to 87% and 101%. So, all very healthy to date

I'm currently drawing my US and one of my UK pensions, both non-COLA. The 2nd UK pension is COLA'ed and I expect to begin drawing it in 8 years.

The US retiree health insurance is the only benefit with no promises or proof that it will continue. Each year I get it is another year where we can spend more on fun activities.

 

[justplainbll]

Our corporate and Gov't pensions appear to be in good shape. Health benefits are substantially diminished because former employers have largely passed the buck to medicare.
Since we've 'progressed' from a society where deals were made on a handshake to one where contracts are made to be broken, the future appears to be bleak.

 

[Bestwifeever]

Our retiree healthcare through DH's megacorp, which I believe we pay 100% toward the group rate and which can be cancelled at any time, will end for sure when DH hits Medicare age of 65. That has always been written in stone, and I think that is pretty standard.

 

[powerplay]

There were a lot of frustrations and drawbacks to a career as a federal employee. But ... my Civil Service Retirement System (CSRS) pension is very generous, COLA'd, includes the gov't paying 72% of my health insurance premiums and DW would receive 55% of what I get if I predecease her.

+2
I am thankful for my CSRS pension and health insurance without which I would not yet be retired. Going on 2 years retired the end of Jan. 2012 and really enjoying retired life!

 

[Amethyst]

Unless you're on a different form of CSRS than I'm familiar with, you are taking a 10% cut to your pension, so that your DW will be entitled to 55% of what you would have gotten without the 10% deduction....correct?

Amethyst

my Civil Service Retirement System (CSRS) pension .... DW would receive 55% of what I get if I predecease her.

 

[Mulligan]

My pension system is funded at close to 90 % I read. 10 years ago, it was funded over 100% with 10.5 % match from employer and employee. Now its 14.5% from both sides and cola has been set at 2% instead of CPI. The lost decade has had its impact.

 

[jazz4cash]

97guns, sorry to hear about your brother, that is really tough.

I have now had the 2011 funding statements from all 3 of my US and UK private pensions. The US one is funded to a level of 91% and the UK ones are funded to 87% and 101%. So, all very healthy to date

I'm currently drawing my US and one of my UK pensions, both non-COLA. The 2nd UK pension is COLA'ed and I expect to begin drawing it in 8 years.

The US retiree health insurance is the only benefit with no promises or proof that it will continue. Each year I get it is another year where we can spend more on fun activities.

How do you come up with the funding percentages?
I seem to recall a website with pension statistics for individual companies, but cannot find it right now.
I study the "summary annual report" that I get each year. I review the growth in assets from contributions and compare the appreciation rate to the market in general, etc......none of this tells what the funding percentage is. There is a statement that it "meets minimum funding standards" which I believe is 85%, but they could play games with assumed growth rates, etc to meet the minimum.

 

[Mulligan]

How do you come up with the funding percentages?
I seem to recall a website with pension statistics for individual companies, but cannot find it right now.
I study the "summary annual report" that I get each year. I review the growth in assets from contributions and compare the appreciation rate to the market in general, etc......none of this tells what the funding percentage is. There is a statement that it "meets minimum funding standards" which I believe is 85%, but they could play games with assumed growth rates, etc to meet the minimum.

From what I understand, the "games" are called " actuarial assumptions. Of course what is assumed and what happens can be different. Standard ones I read are 8% annual returns and 3% inflation. Some are starting to pull the assumed rate of return to the 7-7.5% range. There are many posters here who work in these matters for a living, so hopefully they catch this and correct my mistakes. There are many assumptions they must make to determine funding %, although the assumptions have to meet certain acceptable standards. From what Ive read, pension systems funded above 80% are considered in good shape. Of course, one poster recently mentioned,the funding percentages maybe assumed based on incorrect values assigned to certain illiquid assets that arent easily sold. Ive learned that there is some "art" to the "science" of accurate funding percentages.

 

[East Texas]

Not worried about my pension at all. I'm curious if / how my retiree medical will / might be impacted with (not a political statement - just an identifying statement) ObamaCare.

 

[grumpy]

Unless you're on a different form of CSRS than I'm familiar with, you are taking a 10% cut to your pension, so that your DW will be entitled to 55% of what you would have gotten without the 10% deduction....correct?

Amethyst

Yes, my pension amount was reduced due to my opting to provide for a survivor annuity for my wife. But as I understand it, she would receive 55% of what I currently receive, not 55% of what I would have received had I not elected the survivor annuity. I am not really certain about this or concerned about it. Our total assets are such that, were I to die before her, she would have no money worries in any case.

 

[Alan]

How do you come up with the funding percentages?
I seem to recall a website with pension statistics for individual companies, but cannot find it right now.
I study the "summary annual report" that I get each year. I review the growth in assets from contributions and compare the appreciation rate to the market in general, etc......none of this tells what the funding percentage is. There is a statement that it "meets minimum funding standards" which I believe is 85%, but they could play games with assumed growth rates, etc to meet the minimum.

From what I understand, the "games" are called " actuarial assumptions. Of course what is assumed and what happens can be different. Standard ones I read are 8% annual returns and 3% inflation. Some are starting to pull the assumed rate of return to the 7-7.5% range. There are many posters here who work in these matters for a living, so hopefully they catch this and correct my mistakes. There are many assumptions they must make to determine funding %, although the assumptions have to meet certain acceptable standards. From what Ive read, pension systems funded above 80% are considered in good shape. Of course, one poster recently mentioned,the funding percentages maybe assumed based on incorrect values assigned to certain illiquid assets that arent easily sold. Ive learned that there is some "art" to the "science" of accurate funding percentages.

What Mulligan said (Thanks Mr M)

Following changes in the rules (ERISSA?) companies are required to issue statements to all participants of the funds financial details. I assume, but don't know, that pension funds are audited these days after all the melt-downs of so many private pension funds 10 years or so back. I think that at the 60 - 70% funding level PBGC steps in and takes over.

The UK has similar legislation.

 

[hellbender]

Another CSRS Pensioner

Retired CSRS in 2009. No problems and don't expect any.

 

[frayne]

Had the opportunity to take mine as a lump sum, which I did. So if I screw it up, no one to blame but myself. I do have retiree medical that keeps going up and up and up.

 

[jazz4cash]

From what I understand, the "games" are called " actuarial assumptions. Of course what is assumed and what happens can be different. Standard ones I read are 8% annual returns and 3% inflation. Some are starting to pull the assumed rate of return to the 7-7.5% range. There are many posters here who work in these matters for a living, so hopefully they catch this and correct my mistakes. There are many assumptions they must make to determine funding %, although the assumptions have to meet certain acceptable standards. From what Ive read, pension systems funded above 80% are considered in good shape. Of course, one poster recently mentioned,the funding percentages maybe assumed based on incorrect values assigned to certain illiquid assets that arent easily sold. Ive learned that there is some "art" to the "science" of accurate funding percentages.

ok....I shoulda left the part out about games being played....that really was not the point and I did not intend to be negative. I shoulda just said how do you know the funding % of your pension since it is not stated explicitly in the annual statement?

Edit to add............I poked around and realized I actually DO have an "annual funding notice" for one of my pensions that explicitly states the funding percentage which was 94% as of 1 yr ago. These reports started in 2009. I do not have the annual funding notice for my current employer's pension, only the annual summary report I mentioned earlier. The 2nd pension with no annual funding notice is a new company so they may have a grace period to satisfy all the ERISA requirements.

 

[Mulligan]

ok....I shoulda left the part out about games being played....that really was not the point and I did not intend to be negative. I shoulda just said how do you know the funding % of your pension since it is not stated explicitly in the annual statement?

I didnt take it as negative at all. I just wanted to impress myself by using the word " actuarial assumption" . What Ive learned has been through reading various posts over the years of people on this forum, more in the know than I am. In fact, I think I shouldnt have, because now, I know there is "art" involved which makes you worry over things you have absolutely no control on.
For example, my system says it is about 90% funded which they described as " strongly funded". If that is all I know, there is no worry. But no, I have to dig deeper and find part of the assumptions are based on 8% returns. Then you look deeper and realize the allocations of the fund make it hard to reach that. A certain percentage has to be in short term investments for liquidity, then " safety" in government bond, etc. We know where the interest rates are on those. So what does the market portion of the fund have to do to pull this all up to 8%? It certainly appears it needs to be a lot more than 8%. I need to be more like some of my fellow retired peers who just "cash the check" and wait the for the next one. That is all they know. Some didnt even know if they got a COLA, or even when they get it, if they did.

 

[Tif7]

The expected return on assets has no impact on how well the plan is funded. That is based on the value of the liabilities and assets on a particular date. What they hope to achieve in asset returns in the future didn't matter when you look at how well the plan is currently funded.

T

 

[Spanky]

There were a lot of frustrations and drawbacks to a career as a federal employee.

.. or as an employee in the private sector.

 

[gerntz]

What pension?

 

[Spanky]

Our retiree healthcare through DH's megacorp, which I believe we pay 100% toward the group rate and which can be cancelled at any time, will end for sure when DH hits Medicare age of 65. That has always been written in stone, and I think that is pretty standard.

Our corporate medical plan is similar. Retiree pays 0 - 80% of group rate until medicare kicks in.