Company Pension Question

[MJ]

Although I keep track of my projected small pension about $1000 which would start at 65, I have not yet included it in my retirement assets because I am not sure if the it will be there in 9 years.

But I have a couple questions,

Can the monthly payments go directly into a tax deferred retirement type account?

Since most of us are ER'd prior to the start of the benefits, are the payments for most pension plans inflation protected up the age of 65 similar to SS?

I already know that at 65, my pension amount will be fixed.

I hope that I will have the option to take a lump sum amount as well.

Only the principal owner and trustee can answer these but I would rather not ask any retirement related questions for another 8 months.

Thanks

MJ

 

[mickeyd]

Hey MJ,

Generally your pension payments can not go into a tax deferred account because tax deferred accounts (401k, IRA, 403b etc) are related to earned income and your pension is not earned income.

Unless  so stated (like ss and military pensions), most pensions are not indexed (inflation protected).  They stay the same amount until you die.

Some pensions offer a lump sum distribution but many do not.  I suggeest you read any literature that you were given as well as contacting the company to get an accurate reply.

You have a right to have any retirement questions answered in an accurate and timely manner.  Do not be intimidated by the powers-to-be.  Just tell them that you are doing a little retirement planning and you need the information.  I'm sure that the trustee and principal owner are very aware what their retirement situation is (in other words they have done a little retirement planning), why should you not be so informed?

Hope this helps,

 

[Bob_Smith]

Since most of us are ER'd prior to the start of the benefits, are the payments for most pension plans inflation protected up the age of 65 similar to SS? I already know that at 65, my pension amount will be fixed.

MJ, if the amount at age 65 is fixed, I would highly doubt that there is a COLA between the ER date and 65. I know my non-COLA'd pension has no such feature, and I've never heard of one that did.

My pension plan distributes a booklet to those who ask (and it is available on the employer's web site) that describes all the details of the pension plan. You might ask if they have anything like that. I wouldn't trust anything an HR rep told me. In my experience they are often clueless, and to make matters worse, they never hesitate to give you an answer.

 

[MJ]

Thanks for the information.

Although I work for a large private family company they don't have a corporate HR department. They do distribute plan pamphlet but it doesn't answer my questions.

I guess there is no harm in asking a few simple questions.

MJ :-/