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Old 01-11-2009, 02:56 PM   #41
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OK, thank, got it now.

Even though I bought 5 years of service credit, I could have bailed without buying any. However, I wouldn't have gotten the full pension amount. It would have been reduced by 1% for each of the 5 years......for a total of 5% reduction. I had 30 years 10 months of actual service time, so I could have just bought 4 years 2 months. But I opted to pay the slight amount for the extra 10 months in order to boost my pension just a tad more.....only about $300/year, but that pays for all of my coffee joint runs. That $300/year (cola'd for life) cost me about $170 up front, so I broke even after the first 7 months.
How did they compute the additional service credit, based on your ending salary or a composite of 3 or 5 years service? Reason being, my DB pension computes as of payment at current salary level... so it behooves me to purchase years when I am vested (in about 3 years) versus waiting later into my career when those service years/credit are much more costly.

Either way, ARC or ASC (whichever you want to call it) is one of the better deals out there. Goonie, don't underestimate those coffee runs! My lovely mother who is semi-retired is a mainstay at Panera and Peet's coffee, so I frequently find myself purchasing giftcards for her, she really does enjoy it as part of her routine.
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Old 01-11-2009, 03:40 PM   #42
Recycles dryer sheets
 
Join Date: Nov 2006
Posts: 69
Quote:
Originally Posted by pasadenaDC View Post
How did they compute the additional service credit, based on your ending salary or a composite of 3 or 5 years service? Reason being, my DB pension computes as of payment at current salary level... so it behooves me to purchase years when I am vested (in about 3 years) versus waiting later into my career when those service years/credit are much more costly.

Either way, ARC or ASC (whichever you want to call it) is one of the better deals out there. Goonie, don't underestimate those coffee runs! My lovely mother who is semi-retired is a mainstay at Panera and Peet's coffee, so I frequently find myself purchasing giftcards for her, she really does enjoy it as part of her routine.
In my plan, the calculation is made at the time you ask for the quote from the Pension agency. In our case, you should buy the service credits as soon as you are able. They do an estimate, projecting 2% raises, so if you are expecting bigger raises, or a job change for more money, you come out way ahead. I bought my 5 years just before my longevity step increase, benefitted from the salary increase.

It was the best purchase I could have made, as I was able to use my 457 Plan (tax deferred) money to buy the time. By buying the retirement time, I never had to pay taxes on this deferred savings, other than when it is paid to me as pension.
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Old 01-11-2009, 04:26 PM   #43
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Seem that I worked for a real good private company for 31 plus years,
we were sold last year so that is why I am er ed. Anyhow up until 1988 we had ESOP which they stopped,but the cashout was great.
Now have a non COLA pension to which I did not contribute.
After ESOP was over they switched to 401K to which they made conntributions,sometimes stock/cash.
Oh yea I was in middle management also had MIP depending on profits for the year.
Our president was Ered/forced out by the new owners before me, after
I was early retired I wrote him a nice letter thanking him for 31 plus years of stable employmment, plus all the nice ESOP/401K/pension/MIP over
the years. I wish that the pension was COLA/ in 20 years the the buying
power of the fixed amount will be greatly reduced. The new owners froze
the pensions for anyone under 5 years service.
Welcome to the global matrix.
Old Mike
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Old 01-11-2009, 04:47 PM   #44
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About 3 years active duty and the rest of 20+ in the Guard will give a Cola'd pension (with health benefits) at age 60 that I made no salary contribution to.

22+ years under FERS contributing @ ? -- 1% ish I think :confused:

Hoping the Gov does not bury itself in debt or devalue the dollar over the next 16-20 years so I have two worthless pensions.
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Old 01-11-2009, 05:46 PM   #45
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Quote:
Originally Posted by pasadenaDC View Post
How did they compute the additional service credit, based on your ending salary or a composite of 3 or 5 years service? Reason being, my DB pension computes as of payment at current salary level... so it behooves me to purchase years when I am vested (in about 3 years) versus waiting later into my career when those service years/credit are much more costly.
Quote:
Originally Posted by wheel9 View Post
In my plan, the calculation is made at the time you ask for the quote from the Pension agency. In our case, you should buy the service credits as soon as you are able. They do an estimate, projecting 2% raises, so if you are expecting bigger raises, or a job change for more money, you come out way ahead. I bought my 5 years just before my longevity step increase, benefitted from the salary increase.
The cost to purchase the service credit is based on the average of the 4 highest year's salary, out of the last 10 years. For me, it was years 6, 7, 8, and 9. Year 10...the year I retired...I only worked a very short period of time, and only earned about $20K, so that year was not considered.

They give you an estimated ballpark figure of what your cost will be, but they don't give an exact cost until after your last day on the job.

With our pension plan, you can't purchase service credit until you officially give notice and retire.

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Originally Posted by pasadenaDC View Post
Goonie, don't underestimate those coffee runs! My lovely mother who is semi-retired is a mainstay at Panera and Peet's coffee, so I frequently find myself purchasing giftcards for her, she really does enjoy it as part of her routine.
The normal coffee shop run costs me 42 pennies! That's 39 cents plus tax!
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