Originally Posted by Meadbh
Last weekend I met up with a friend who recently lost his (pensionable) job in the healthcare system because of some politics. He has 3 years to go until he is entitled to a full pension and the calculation places a lot of weight on the latter years of earnings. He is having difficulty finding employment. Looks like he will be left with a significantly lower pension than he had planned for, and a longer time to make it last.
Sometimes I think it is better to be responsible for your own financial future.....
In the rules of the plans I'm familar with, being entitled to a "full pension" is usually an age thing given that you have a specified number (usually fairly low) years of service. At MegaCorp, I would receive a full pension at 65 years of age, 50% at 55 yo and a sliding scale inbetween. I was canned long before I was 65, so I'm waiting to start my pension so that its a "full pension."
In terms of weight of latter years of earnings, ours used the average of the last five years.
Depending on the details, your friend may not have lost the farm, depending on the details of his/her plan, his/her age and yrs of service, etc. Been there, done that. I've had to wait 7 yrs to be old enough for a full pension and, yes, it's smaller because MegaCorp snipped off my accumulation of seniority years right when things were looking good. Still, way better than not having the DBP pension, which current employees don't have.
More than folks who got snipped off a few years early like your friend and I, the folks who got screwed in the DBP pension era were folks who spent a 30 or 35 year career divided between several different companies, never building up a significant pension at any one.
As you say, it's better to be responsible for your own financial future but having a DBP pension doesn't preclude that. Folks on their game leave gov't service or MegaCorp (when they had DBP pensions) with a DBP pension, SS, a well funded 401k/403b, well funded IRA's and, of course, money in your non-deferred FIRE portfolio.
Sadly.... I didn't quite get all the buckets filled..... Still, the RE fun goes on, as I'm sure it will for your friend.