Ratherbfishn'
Confused about dryer sheets
- Joined
- Jul 2, 2008
- Messages
- 4
Looks like you all may be a group to offer some advice. I'm 40yrs old and vested in my company's pension plan. The company just announced it's providing employees 40 and over with the option of remaining in the pension, with the company continuing contributions, or we can roll the vested amount over to our 401(k) savings plan, to which the company will match up to 6%. I already use the 401 at over 6% on my own. Question is, is it best to keep the pension, or roll it over to the 401? It's a one time, non-revocable decision.
Based on calculation provided to me, the pension would outperform the new 401 approach by about $300k, assuming a 6% return rate, if I retire at 65. At a 9% rate, the new 401 approach outperforms by a marginal $100k. Thus, they look pretty even to me.
I understand the pension is insured by PBGC, but what if, for some reason, the company decided to stop funding the pension? What if we are bought-out and the new suitor decides not to fund it? Can a purchaser totally eliminate the existing pension plan? The company I work for is a Fortune 500 and, like many stock companies right now, is taking a beating in the market. We are financially sound, but who knows what the future holds. I've done well in the company over the past 12 years and anticipate further success here. So, what's riskier? Roll my pension into the 401 and take my chances there with the market, or leave it with the pension?
Thanks much!!
Based on calculation provided to me, the pension would outperform the new 401 approach by about $300k, assuming a 6% return rate, if I retire at 65. At a 9% rate, the new 401 approach outperforms by a marginal $100k. Thus, they look pretty even to me.
I understand the pension is insured by PBGC, but what if, for some reason, the company decided to stop funding the pension? What if we are bought-out and the new suitor decides not to fund it? Can a purchaser totally eliminate the existing pension plan? The company I work for is a Fortune 500 and, like many stock companies right now, is taking a beating in the market. We are financially sound, but who knows what the future holds. I've done well in the company over the past 12 years and anticipate further success here. So, what's riskier? Roll my pension into the 401 and take my chances there with the market, or leave it with the pension?
Thanks much!!