Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
private pension promises
Old 06-11-2005, 10:36 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 2,083
private pension promises

I though I would start a related thread.
I am scheduled to receive my non-cola pension in 8 years from my former employer which is privately held. The pension is a "defined benefit" plan and meets all ERISA requirements. Although I hope the company will survive, from year 8 to 25 when I could use the extra money, that is a long long period of time. I was wondering if there is a formula that can determine what % of the pension I could look forward to collecting if the company doesn't make it? Even 50%, would be nice pocket money to have.

I currently have my pension flag on my spreadsheet temporarily turned off so my monthly pension is not reflected in my future income. I do turn the flag on occasionally just to make me feel better.
__________________

__________________
I look to the present moment because that's where I live my life.
MJ is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: private pension promises
Old 06-11-2005, 02:12 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Re: private pension promises

Quote:
Originally Posted by MJ
I was wondering if there is a formula that can determine what % of the pension I could look forward to collecting if the company doesn't make it? Even 50%, would be nice pocket money to have.
I can't really answer your question- but I believe that it is not a linear reduction. Way more gets shaved off the large pensions. In the airline bankruptcies, the pilots really get whacked, not the baggage handlers.

Which is as it should be, since few taxpayers funding this bailout will have anything like the wealth or pensions of a pilot.

You can probably go to Pension Benefit Guaranty and get a pretty fair idea of how you would come out.

H
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: private pension promises
Old 06-11-2005, 04:30 PM   #3
Confused about dryer sheets
 
Join Date: May 2005
Posts: 8
Re: private pension promises

Really It Should be in the fine print on your pension enrollment forms or the updates I am sure they send you annually. A pension plan can not get approved without having something in the bylaws planning for an occasion where the company may default. Check out the discolsures and your questions should be answered.
__________________
JR Andrews is offline   Reply With Quote
Re: private pension promises
Old 06-11-2005, 05:07 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: private pension promises

Quote:
Originally Posted by JR Andrews
Really It Should be in the fine print on your pension enrollment forms or the updates I am sure they send you annually.* A pension plan can not get approved without having something in the bylaws planning for an occasion where the company may default.* Check out the discolsures and your questions should be answered.
I am sure this post is correct. Personally, I avoided the "fine print"
my whole life and never got into any trouble I couldn't work out of
due to this. Maybe I couldn't have been an attorney after all. I am surely combative enough, but,
I was a lousy student and parsing each phrase and term in a hundred page
document doesn't do it for me.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: private pension promises
Old 06-11-2005, 05:30 PM   #5
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: private pension promises

Half is probably a reasonable ball park figure, but it could be more if your pension is very small, and doesn't include any extras.* Some people get 100% of their pension from the PBGC, and some lose 2/3 of it.* I know people who have received estimated payments from the PBGC for years because the formula they use to calculate payments is so complex.

There is no COLA on PBGC payments, so 8 years of 4% inflation will erode 1/4 of what ever remains of your pension, after the PBGC cuts it down to size.* It will get worse from there.

I attended a meeting after our place shut down.* An old man hobbled up to the microphone, and said that he was receiving $200/month pension.* Inflation had completely destroyed his pension.* If you live a long time, defined benefit pensions become useless.
__________________
Michael is offline   Reply With Quote
Re: private pension promises
Old 06-11-2005, 06:34 PM   #6
Full time employment: Posting here.
 
Join Date: Oct 2003
Posts: 961
Re: private pension promises

See the Frequently asked questions at the PBGC website.

#11 and on should be on point, especially the
Maximum Monthly Guarantee


- Alec
__________________
ats5g is offline   Reply With Quote
Re: private pension promises
Old 06-11-2005, 08:13 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 2,083
Re: private pension promises

Thanks for the replies.

My pension is only $12k. I figure in 8 years it will be worth approx $8.5k in today's dollars and yes I know it's still downhill from there. But as I said, it's still would be decent pocket money for 10 to 15 years even if at 50% of that.

__________________
I look to the present moment because that's where I live my life.
MJ is offline   Reply With Quote
Re: private pension promises
Old 06-11-2005, 10:48 PM   #8
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: private pension promises

I would think there is a good chance you will get the whole thing, as long as there are no special payments for retiring early or such. You won't really know until the time comes, because their formulas are so complicated that it takes them years to figure out how much to give people after they take over a plan. They give estimated payments until they figure it out.
__________________

__________________
Michael is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Military pension and pay - how much is it past 20 Average Joe FIRE and Money 13 03-18-2007 11:22 AM
Pension Time Bomb Article Mountain_Mike FIRE and Money 11 01-17-2006 07:49 AM
Public, private, homeschool, or no school? Nords Other topics 33 12-15-2005 10:23 AM
The Fat Pension newellcr Young Dreamers 34 07-26-2005 09:23 AM
public pension promises Martha FIRE and Money 44 06-16-2005 01:36 PM

 

 
All times are GMT -6. The time now is 11:54 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.