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Old 09-26-2014, 02:12 PM   #21
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I am missing what the incentive is for the $985 decide by Oct 30 option is for the company? Does the std pension include some medical benefit(s) and the accelerated one does not? Or something like that?

I could understand the accelerated option as incentive to get people to take voluntary layoff and separation form the company. But you are already retired and separated.

I think there is something missing, otherwise it makes no sense for the company to pay more to you earlier.
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Old 09-26-2014, 03:09 PM   #22
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Yep, I have the same concern. Other than the differing amounts, there is nothing obviously different between the "normal" early start date pension, or this one-time deal sweetened pension. Neither has COLAs, neither has any other medical coverage or other benefit, and so on. So, I am either missing something, or there is some benefit to the company I'm not aware of.
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Old 09-26-2014, 08:49 PM   #23
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I guess I would be focused on the impact on me and less wound-up-in-my-underwear about the impact on the employer. Maybe its a win-win.
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Old 09-26-2014, 11:07 PM   #24
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pb4uski, no need to flame. I'm merely curious why they'd offer the better deal. :-)
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Old 09-26-2014, 11:51 PM   #25
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pb4uski, no need to flame. I'm merely curious why they'd offer the better deal. :-)

Why not simply ask your company's HR department? I'm sure they would tell you the mechanics of what's happening in each situation.


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Old 09-27-2014, 07:39 AM   #26
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pb4uski, no need to flame. I'm merely curious why they'd offer the better deal. :-)
No intent to flame - I thought I was being mild. It is just between this and the other pension thread going right now there seems to be more pre-occupiation with the benefit to the employer and if it benefits them then it must be bad for me rather than looking at the merits of the decision to you.
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Old 09-27-2014, 09:41 AM   #27
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No intent to flame - I thought I was being mild. It is just between this and the other pension thread going right now there seems to be more pre-occupiation with the benefit to the employer and if it benefits them then it must be bad for me rather than looking at the merits of the decision to you.
I know I was certainly a little curious - but just from the aspect of it being "there might be some very fine print or an asterisk you aren't seeing, or some other detail glossed over, because it seems like a no-brainer...and usually, corporations aren't dumb enough to just hand out gift horses like that without any catches".
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Old 09-27-2014, 11:33 AM   #28
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Perfectly said, MooreBonds. :-)
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Old 09-27-2014, 11:58 AM   #29
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The only reason I could think of is that Boeing expects to have a bangout year this year, and a pension starting Jan 2015 would need to be purchased/expensed in 2014. Which would allow them to take the charge against earnings now, vs having to wait 1 or 2 years and taking the expense then. And giving them an easier time showing growth in EPS between 2014 vs 2015 vs 2016.
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Old 09-27-2014, 01:13 PM   #30
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As someone planning to retire from Big B next year I'm keenly interested in this thread. Neither I nor AFAIK any of my colleagues have received this buyout offer. However, if I could magically increase my pension by 10+% by retiring 6 months early I would be sorely tempted.

So what was the phone number of that Lump Sum Service Center....?
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Old 09-27-2014, 02:24 PM   #31
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855-528-8286, M thru F, 8a to 7p Central. I also called the usual Total Access number; after I entered my BEMSID, it went directly to a menu where #2 was for people calling about the Lump Sum offer. Maybe the system is smart enough to connect my BEMSID to the fact I was one who received the offer and offered me a tailored menu. Take a look at Boeing dangles pension buyout opportunity - Local - MyNorthwest.com for a bit more info. A lot of comments there, mostly off-topic, but rather entertaining.
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Old 10-22-2014, 12:44 PM   #32
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I got one of these things in the mail the other day, that said to be on the lookout for a packet in the mail. I was a McDonnell-Douglas/Boeing employee from 1992-1999.

FWIW, here are the options they're giving me. I never received the packet, so I went to the website....
1) Lump sum payment of $14,726.74
2) Single Life Annuity: $68.88 for life (no survivorship, as I'm single)
3) Keep the retirement plan, which is $349.20 per month, non-COLA'ed, and will start in 2035, when I turn 65.

I'm thinking about taking the lump sum, and putting it into an IRA. I figure that $349.20/mo isn't going to be much by 2035, and it will be even less as time goes by. But, $14,726K right now, to invest as I please, is not exactly chump change. If I invested it and averaged about 7.1% per year, by the time 2035 rolled around it would throw off about $349.20 per month, anyway.

Of course, I could screw up and lose it all. But I guess the company could also screw up my pension over the next 21 years, anyway.
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Old 10-22-2014, 01:02 PM   #33
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Andre,
Looks like you have sufficient funds to max a Roth IRA for the next 3 years. The is what I'd do.
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Old 10-22-2014, 01:09 PM   #34
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Andre,
Looks like you have sufficient funds to max a Roth IRA for the next 3 years. The is what I'd do.
That's a good idea, although I max out my Roth IRA, anyway. If I used this money for that purpose though, wouldn't I have to pay income tax on it now, plus a 10% penalty?

I have a rollover IRA with Fidelity, from the company I worked for after Boeing. I was thinking about just transferring it to that.
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Old 10-22-2014, 01:33 PM   #35
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Using the immediateannuity.com calculator, I'd need a ~$200K lump sum to equal the $985 annuity option. The $140K actual lump sum offer is about the same 30% haircut as described above.
That's one heck of a haircut!
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Old 10-22-2014, 01:34 PM   #36
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That's a good idea, although I max out my Roth IRA, anyway. If I used this money for that purpose though, wouldn't I have to pay income tax on it now, plus a 10% penalty?

I have a rollover IRA with Fidelity, from the company I worked for after Boeing. I was thinking about just transferring it to that.
It is taxable. My mistake. Not sure if you'd rollover to an existing IRA.
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Old 10-04-2015, 04:04 PM   #37
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I FIREd from Boeing last fall taking the VLO package. I recently received the pension buyout offer too. Crunching the numbers it looks like taking the lump sum would result in a 30%+ haircut.

Comparing the early pension payout to the standard pension at 65, it seems I'd come out ahead taking the earlier payout.

However, taking the lump sum and rolling it in at IRA has the highest dollar value.

Ultimately it becomes a question of which risk(s) are you trying to mitigate: pension fund solvency risk, longevity risk (i.e. out living your money), runaway inflation risk and/or investment risk. There is no free lunch. YMMV

I found this exercise helpful:

So how many years of company service was this offer to be exact just curious?
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Old 10-04-2015, 04:24 PM   #38
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I called the "Lump Sum Service Center" (to me, the literature title and this call center name just emphasize their hope folks take the lump sum even though there are also annuity options) to get more info. I kept getting reps that were unintelligible, so I kept calling back until I found one I could clearly understand and who was friendly. According to her, any former Boeing employee who is vested in the defined benefit pension plan, AND is under retirement age (I didn't think to ask what age this was) AND had not yet requested the start of their pension payments, is eligible. She asked if I had any other heritage plans, but I don't.

Using the immediateannuity.com calculator, I'd need a ~$200K lump sum to equal the $985 annuity option. The $140K actual lump sum offer is about the same 30% haircut as described above.
Just curious maxq, are you married and if so how old is your spouse and what is their sex?

Assuming a single life calculation for a 60 year old male you would need to have an annual return of 6.5% to support annual withdrawals of $11820 from a $140k lump sum. So if you are in good health and don't need the cash lump sum for any emergency I'd go with the pension.
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Old 10-04-2015, 04:30 PM   #39
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IIRC 8 years. 7 years time served plus 1 year added when they sweetened the VLO. Plus another 10 years as a vendor to the same megacorp not counted toward the pension.

17 years of my life I'll never get back. How I love FIRE.
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Old 10-04-2015, 05:00 PM   #40
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IIRC 8 years. 7 years time served plus 1 year added when they sweetened the VLO. Plus another 10 years as a vendor to the same megacorp not counted toward the pension.

17 years of my life I'll never get back. How I love FIRE.
So thats 7 years or 8 calculated from Boeing for the 110,000 lump ?

Edit nevermind I was half asleep when I read that last post. Seems low, as im pretty sure they just handed out some more in Sept 2015 to past IAM members at 20-25k per year of service, ill have to ask them again what they were offered.
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