New to this site and forum, first post. Great info throughout, without too much of the usual forum people-bashing I see elsewhere!
Boeing is freezing its pension plan for non-union employees in 2016. As part of this, they have an offer out to eligible folks for a lump sum early distro or a non-COLA early monthly annuity, both starting Jan 2015. I know the lump sum is not to my advantage--I'm an early retiree who left the company in 2013, age 60 now, good health. I'm debating my annuity options--regular pension payment timing, or this "early" payment scheme. I had just a few years with Boeing and have two other larger pensions, so I don't have to rely on this pension or start it anytime soon.
The Boeing pension calculator accessible by employees/retirees/vested annuitants shows I could normally start drawing a lump sum annuity of 846/month starting Jan 2015, or 919/month if I wait until Jan 2016, or 999/month if I wait until Jan 2017. However, the early payout literature details show that I could start getting 985/month starting Jan 2015 under this one-time offer (have until the end of Oct to decide). On paper, it seems a no-brainer to go with this early election--I could start getting it the same time as regular pension payments could normally start, but in a significantly higher amount (985 vs 846). In fact, comparing the numbers shows that I'd get almost the same amount starting in 2015 as I'd get by waiting until 2017 under the regular pension options. This in essence is two extra years of pension payments.
However, I'm a cynic and have to think I am somehow missing something--Boeing surely has a benefit to itself in offering this early election, so why would they offer me a higher monthly payment to accept an earlier annuity start date? The application package Boeing provided seems to push for lump sum distro, but clearly sets out the annuity option and gives pros and cons of each. There are various annuity options available based on spouse, beneficiary, acceleration, and so on, but for the purpose of my question, I'm just using the single life annuity numbers for comparison.
Any thoughts or opinions? Any Boeing early retirees/vested annuitants facing the same choices?
Boeing is freezing its pension plan for non-union employees in 2016. As part of this, they have an offer out to eligible folks for a lump sum early distro or a non-COLA early monthly annuity, both starting Jan 2015. I know the lump sum is not to my advantage--I'm an early retiree who left the company in 2013, age 60 now, good health. I'm debating my annuity options--regular pension payment timing, or this "early" payment scheme. I had just a few years with Boeing and have two other larger pensions, so I don't have to rely on this pension or start it anytime soon.
The Boeing pension calculator accessible by employees/retirees/vested annuitants shows I could normally start drawing a lump sum annuity of 846/month starting Jan 2015, or 919/month if I wait until Jan 2016, or 999/month if I wait until Jan 2017. However, the early payout literature details show that I could start getting 985/month starting Jan 2015 under this one-time offer (have until the end of Oct to decide). On paper, it seems a no-brainer to go with this early election--I could start getting it the same time as regular pension payments could normally start, but in a significantly higher amount (985 vs 846). In fact, comparing the numbers shows that I'd get almost the same amount starting in 2015 as I'd get by waiting until 2017 under the regular pension options. This in essence is two extra years of pension payments.
However, I'm a cynic and have to think I am somehow missing something--Boeing surely has a benefit to itself in offering this early election, so why would they offer me a higher monthly payment to accept an earlier annuity start date? The application package Boeing provided seems to push for lump sum distro, but clearly sets out the annuity option and gives pros and cons of each. There are various annuity options available based on spouse, beneficiary, acceleration, and so on, but for the purpose of my question, I'm just using the single life annuity numbers for comparison.
Any thoughts or opinions? Any Boeing early retirees/vested annuitants facing the same choices?