Boeing Pension Safety - lump sum the right choice?

FYI, Boeing has floated the word bankruptcy in the past 24 hours as an alternative they may seek.

When I left my last employer/megacorp, I took the lump sum. Megacorp was having its share of problems at the time and I wanted control. I manage my money better and am more interested in my well being than megacorp or their pension/fund managers. When I cut ties with a company, the same way I always rollover my 401k money to IRA, I want the pension money. I do not want any loose ends with megacorp.

I have a small pension from my very first employer where I worked 40 years ago. Unfortunately lump sum was not an option offered. So, I take my monthly taxable $200.
 
FYI, Boeing has floated the word bankruptcy in the past 24 hours as an alternative they may seek.

When I left my last employer/megacorp, I took the lump sum. Megacorp was having its share of problems at the time and I wanted control. I manage my money better and am more interested in my well being than megacorp or their pension/fund managers. When I cut ties with a company, the same way I always rollover my 401k money to IRA, I want the pension money. I do not want any loose ends with megacorp.

I have a small pension from my very first employer where I worked 40 years ago. Unfortunately lump sum was not an option offered. So, I take my monthly taxable $200.
I have absolutely no issues with my old Megacorp managing my pension. I get the "funding" statement each year and if they're not at 100% funded, they are very close. I don't think they've ever dropped below 90% and that was likely due to significant market movements (which they made up the next year.) I have a large (monetary) stake in Megacorp still. I keep selling the stock, but it keeps going higher. Whatchagonnado?

I just don't see Pension at Boeing (or any major Megacorp) being a big issue but YMMV.
 
Often a company pension is a better deal than taking the lump sum and buying your own annuity. However in your case it seems to be break even which to me means you aren’t getting any special deal and thus can go with the option you prefer and even invest the money yourself rather than buying an annuity.

Above all be tax smart about it, rolling your lump sum into an IRA and making sure everything is done by the book.
 
Yeah, you hate to say "too big to fail" but if that doesn't apply to Boeing, not too many companies ever would IMHO.

It's difficult to sit here and watch a great company do so many dumb things. Don't have enough insight to say "it's management" or just bad luck, but in any case, I really don't think the pension is in jeopardy but YMMV.
There is a difference between failing and going out of business...

GM failed... but now going strong... shareholders and bondholders were wiped out...

I do not ever see Boeing not making planes... the question would be who owns them at that time...
 
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I do not ever see Boeing not making planes... the question would be who owns them at that time...
Kind of like McDonnel Douglas, now owned by Boeing. IMO, it was not a good moev for Boeing to take over that company.
 
Kind of like McDonnel Douglas, now owned by Boeing. IMO, it was not a good moev for Boeing to take over that company.
I worked there at the time and totally agree. We joked that McD bought Boeing with Boeing's money. McD took over the executive suite and the rest is history.
 
I worked there at the time and totally agree. We joked that McD bought Boeing with Boeing's money. McD took over the executive suite and the rest is history.
I started in 85 and was given the opportunity to seek employment elsewhere in 93. DW left in '99 with 21 yrs.
 
Boeing is strategically important - even essential - to the United States.

I'm stuck on not rolling the lump into a tax deferred account? Why not? Did I miss something?
 
I was in a similar situation with a 25 year pension option vs lump sum. Ran the numbers, took the money via rollover. First to 401 then to IRA. Pension would have died with me. Fast forward 10 years into retirement and total has increased by $.9M even after several 6 figure WD’s in several of those years. No regrets.
 
Boeing is strategically important - even essential - to the United States.

I'm stuck on not rolling the lump into a tax deferred account? Why not? Did I miss something?
They offered me ~$28k lump sum. I've already collected 30% more than that. And the DW will continue to receive it if I croak 1st.
 
Well, The Machinists rejected the latest offer today. There is no way the pension will come back, and the offer was VERY nice from my perspective. Chapter 11 might be a reality for one of the greatest iconic companies in American history. "Boeing offer would increase pay by 35% over four years, up from 30% that the company offered last month. It also boosts the ratification bonus to $7,000 per worker instead of $6,000.
The new offer would not restore a traditional pension plan — a key demand of the 33,000 striking workers — but it would increase the amount of contributions to 401(k) retirement plans that Boeing would match. It would also retain performance bonuses that Boeing wanted to eliminate and make them at least 4% of pay, the union said
."

The 401K match is what gets me ...can you imagine how quickly one could build up a FIRE life with this kind of 401K matching? ... "Boeing's latest offer includes an increase in the company's 401(k) match to 100% (up from the prior offer of 75%) of the first 8% contributed, in addition to an automatic 4% company matching contribution". ...Stated another way, you put in 8% of your paycheck into your 401K, and Boeing adds another 8%. 16% into your 401k every paycheck that grows tax free. Load up on Index finds, compounding at an average of say 10%...OMG.
 
Well, The Machinists rejected the latest offer today. There is no way the pension will come back, and the offer was VERY nice from my perspective. Chapter 11 might be a reality for one of the greatest iconic companies in American history. "Boeing offer would increase pay by 35% over four years, up from 30% that the company offered last month. It also boosts the ratification bonus to $7,000 per worker instead of $6,000.
The new offer would not restore a traditional pension plan — a key demand of the 33,000 striking workers — but it would increase the amount of contributions to 401(k) retirement plans that Boeing would match. It would also retain performance bonuses that Boeing wanted to eliminate and make them at least 4% of pay, the union said
."

The 401K match is what gets me ...can you imagine how quickly one could build up a FIRE life with this kind of 401K matching? ... "Boeing's latest offer includes an increase in the company's 401(k) match to 100% (up from the prior offer of 75%) of the first 8% contributed, in addition to an automatic 4% company matching contribution". ...Stated another way, you put in 8% of your paycheck into your 401K, and Boeing adds another 8%. 16% into your 401k every paycheck that grows tax free. Load up on Index finds, compounding at an average of say 10%...OMG.
I didn't work for Boeing, but I had a similar/better situation with my 403(b). I was REQUIRED to contribute 5% of salary to my 403(b) from day one of employment. The company "matched" that with 10% of salary contribution.

Beyond that, I could contribute the full discretionary amount which is now around $30,000 per year for over age 50.
Yes, that tax-deferred money piles up over a few decades...
 
It is interesting that the union rejected the proposal to get back to work... seems that the workers want to get back a pension plan that went away awhile back... a defined benefits plan...

Boeing is saying no and most of the people I see on TV are saying it will never happen... but BK is in the cards... so maybe something will happen to the existing pension plans...
 
I believe that you need to review three things.

First off, the current, and the recent past,funding level for your specific pension plan. Boeing no doubt has several. I get one from my former employer each year that lists all the pension plan stats including funding levels.

Second...simply compare the quoted cash value of your pension to the current market annuity rates for an annuity with the same income stream/attributes.

Check to ensure that by taking the commuted pension value you are not giving up any other pension benefits.
 
I know folks who worked at United Airlines and retired from there after a long career. When United went bankrupt, the court allowed them to cut existing, already retired peoples pension payments by up to 50%, with no recourse. Thats the definition of taking it up the hoo haa. I'd take the lump sum
 
I know folks who worked at United Airlines and retired from there after a long career. When United went bankrupt, the court allowed them to cut existing, already retired peoples pension payments by up to 50%, with no recourse. Thats the definition of taking it up the hoo haa. I'd take the lump sum
Yes.. but.... their pensions were way above the max covered by insurance... if the OP's pension is above the max I would agree... but less than the max it might not be the best option (even though I probably would myself... well, except that I have not done so at my company as the interest rate on cash balance is better than I can get)...
 
Boeing is strategically important - even essential - to the United States.
Boeing's military aircraft business is essential to the United States, and it can keep rolling out militarized versions of its commercial models for decades longer than I'll be around.

As far as I can see, it isn't capable of designing and mass-producing a competitive clean-sheet replacement for the 737. For that reason alone, the days of Boeing as a builder of commercial aircraft are numbered.

I don't envy anyone who has to make a pension decision in this situation.
 
Boeing outsourced some of its pensions to Met Life several years ago.
 
There is certainly good reason for pause if your pension is above insurable limits or if you CV payout is more than the market cost of a similar annuity.

Boeing is a mess. Financial, product quality, leadership, and morale are all at ground zero.
 
...Don't have enough insight to say "it's management" or just bad luck...
From what I've read, I'm leaning toward management. It's just such a familiar theme. A well-run company with a strong focus on the customer and the workforce gets a board full of MBAs who were taught that the only ones who matter are the stockholders, and the only metric to watch is the quarterly financials. The results are predictable. And exactly what we're seeing in Boeing today.
 
From what I've read, I'm leaning toward management. It's just such a familiar theme. A well-run company with a strong focus on the customer and the workforce gets a board full of MBAs who were taught that the only ones who matter are the stockholders, and the only metric to watch is the quarterly financials. The results are predictable. And exactly what we're seeing in Boeing today.
Do not blame the MBAs... and with no knowledge I bet there are few MBAs on the board...
 
At the risk of starting an argument, a lot of the issues at Boeing started when the CEO's comp package got tied to stock price performance in a big way. When I started there, Frank Schronz, a lawyer, was the CEO and the mission statement was "To be the number one Aerospace company in the world". When he retired and Phil Condit, an engineer, was appointed CEO, the mission statement changed to "Be the number one Company in shareholder value".
It took 30 years but they managed to tank a good, viable company.
In the meantime, I am going to take the rollover to my IRA and go from there.
 
Do not blame the MBAs... and with no knowledge I bet there are few MBAs on the board...
Well, had to look... this just looking at the careers of the board...

Most are engineers and it looks like 2nd is tech people... I see only one that might be an MBA.. but should be an accountant...
 
OK, I was using the term MBAs loosely. They are certainly not the only ones who believe that the only reason a company exists is to enrich the stockholders, to the detriment of customers and employees. I guess I need to find a better catch-all term for that mentality.
 
OK, I was using the term MBAs loosely. They are certainly not the only ones who believe that the only reason a company exists is to enrich the stockholders, to the detriment of customers and employees. I guess I need to find a better catch-all term for that mentality.
Bean counters?
 
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