Megacorps that offer pension?
- Thread starter Safire
- Start date
Retired in 2019 from a mega heathcare system after 40 years.
Hired in 1978 with a defined benefit pension.
Pension was converted about 20 yrs later to a cash balance plan for any employee younger than 50.
We were given a small lump sum to our cash balance account.
Mega corp continued to contribute yearly to cash balance based on years of service and age.
When I left, their contribution was 13% of my salary.
At retirement, I chose a lump sum rolled into my IRA.
i had also contributed for 30 yrs to a voluntary 403b plan.
Never made a high salary but these pieces have enabled us a comfortable life now.
New employees are offered a 3% match to a 401K plan.
Hired in 1978 with a defined benefit pension.
Pension was converted about 20 yrs later to a cash balance plan for any employee younger than 50.
We were given a small lump sum to our cash balance account.
Mega corp continued to contribute yearly to cash balance based on years of service and age.
When I left, their contribution was 13% of my salary.
At retirement, I chose a lump sum rolled into my IRA.
i had also contributed for 30 yrs to a voluntary 403b plan.
Never made a high salary but these pieces have enabled us a comfortable life now.
New employees are offered a 3% match to a 401K plan.
Bamaman
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I read earlier this week that only about 22% of large companies offered Defined Pensions.
I worked 24 years for a major auto manufacturer, and we started out with a contributory (defined) pension that had company stock mixed in. But they also switched over to a 401K program many years ago. So I was fortunate to have both plans--contributing heavily into the 401K and playing the equity markets.
The younger employees didn't have the luxury of the traditional pension, however.
I worked 24 years for a major auto manufacturer, and we started out with a contributory (defined) pension that had company stock mixed in. But they also switched over to a 401K program many years ago. So I was fortunate to have both plans--contributing heavily into the 401K and playing the equity markets.
The younger employees didn't have the luxury of the traditional pension, however.
DaveLeeNC
Recycles dryer sheets
My situation was interesting. The Megacorp that I worked for had a defined benefit pension plan that they 'froze' around 2000 (no more accruals under that plan). For older workers such as me you had a choice of the old plan (at the old levels) vs. the new 'annuitizable cash plan' (cash amount calculated off your years of service and salary history). I was considering retiring in 2003 and needed to work another 4'ish years before the new plan was a better deal.
What was interesting is that the company had, in the past, made occasional COLA adjustments up (very occasional, but still). And these had been done based on your retirement date. There was every reason to believe that they would no longer do that (and they have not), but if they did it would be based on your retirement date. So I could retire in 2005 instead of 2003 but that would be on the old plan (same 'old plan' retirement dollars in both cases). However if they ever made another COLA adjustment working longer would actually reduce my retirement.
I retired in 2003 (I would have made that choice even without the COLA consideration). But it was an interesting scenario.
dave
What was interesting is that the company had, in the past, made occasional COLA adjustments up (very occasional, but still). And these had been done based on your retirement date. There was every reason to believe that they would no longer do that (and they have not), but if they did it would be based on your retirement date. So I could retire in 2005 instead of 2003 but that would be on the old plan (same 'old plan' retirement dollars in both cases). However if they ever made another COLA adjustment working longer would actually reduce my retirement.
I retired in 2003 (I would have made that choice even without the COLA consideration). But it was an interesting scenario.
dave
I know that at least one of the companies from the web search in one of the first posts have a pension for people who started before 2009, so yes they do offer a pension, but no new employees are eligible for it.
They instead offer a 401(k) with a 5% $ for $ match plus a 3% retirement contribution.
They instead offer a 401(k) with a 5% $ for $ match plus a 3% retirement contribution.
Argus
Dryer sheet aficionado
Alphabet (Google) does not have a pension plan.
But does have a lucrative 401k, HSA and Stock Grant program.
No knowledge of the other FAANG companies.
But does have a lucrative 401k, HSA and Stock Grant program.
No knowledge of the other FAANG companies.
I know of no electric or gas utilities that still offer pensions to new employees. Most of them have plenty of employees that are still on pension plans having been grandfathered in, so they are still listed as “having” pensions. It WAS the primary reason I stayed with mine as long as I did. I should easily see over a million dollars, perhaps 1.5M, from them over the course of my retirement. (Over $150k so far) IMHO, it was well worth it. It really is a pity they got out of them. They seem to know what they are doing, being 110% funded. It was such a major hiring point for good talent. Now, it makes little sense to work for what could be a lower wage, with stability being the only real selling point.
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ocean view
Full time employment: Posting here.
As an accountant, who worked in the same mid-sized company for 14 years of my career, I had a different experience. No pension. Only $300/qtr employer 401k contribution (no matching) most quarters, but not all. BUT they did give equity to every employee. NQs at first, an ESPP program, and later RSUs. By year 3 of my employment I was able to realize additional income equal to 50-100% of my base salary every year there after. I saved most of that for my ER at age 50.
My point is not to brag, but to highlight that an average employee working in a high-tech company (you mentioned FAANG in the original post) can make enough through equity to fund their retirement without a pension.
How many people end up working for the govt or a FAANG company? And what exactly is the difference in qualifications between a CPA working for - say - the US Treasury or the State of Indiana or Miami - Dade County or the City of Sacramento or a mid-sized private ABC Inc or Apple?
Furthermore, even among megacorps, the FAANG companies seem to be extreme. Companies like IBM (for example) - which used to be considered "MEGACORP" - aren't the same as FAANG. Has IBM's stock done so well that an employee could have recouped his or her base salary each year through vesting stock options? I don't know but I am guessing not.
Nearly every employee working in FAANG (and I'll add in TSLA, to the mix) - regardless of nature of work - appears to end up very rich, making the benefit of a pension (or lack thereof) irrelevant.
The choice for new workers (such as my young friend for whom I posted the thread) or for those looking to do better financially in their careers now appears to be to either work for a govt agency or work for a FAANGT, none of which probably need as many equally qualified workers as are seeking jobs.
Life aien't fair. Again, ask me how I know.
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Many non-profits also still offer pensions but the pay is generally far less than commercial companies. Making the big bucks and investing wisely will provide the best security. Even if a company offers a pension now, nothing stops them from discontinuing it so if I were young, I wouldn’t make this a criteria for job selection.
LarryMelman
Recycles dryer sheets
This is the start of the argument I have had many times with my retired cop friends. To buy an annuity paying their pension income that they started drawing in their early 50's, would cost me several million dollars (a level I might reach in my 60's, but many couldn't possibly reach at all). So yes, they absolutely do have "such large sums", they just refuse to see it for what it is.
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Yes! Another profession - I refer to it as a "calling" - is the teaching profession. It's amazing how many teachers DO become millionaires after a long career doing something they absolutely LOVE and excel at, and they - usually - get a large pension at the end of it, as well.
I am not jealous at all, I think teachers in particular earn their windfall. I just wish that pensions were universally offered to all, regardless of who the employer is (unless you count SS as a "pension" of sorts).
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ocean view
Full time employment: Posting here.
I would say that for someone just starting out, there is little difference in qualifications for any entry level positions at the employers you’ve named. If the individual has spent 2+ years in public accounting in order to get CPA first, they are no longer entry level. The experience gained in public accounting may differ based on the types of clients they worked on (differences due to industry, manufacturing is different than banking for example) but that doesn’t necessarily “type cast” them to only those same industries outside of public accounting. It just means there is a bit of learning curve, just like any new job.
Calico
Thinks s/he gets paid by the post
- Joined
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Was there something that prevented you from taking a job as a police officer when you were starting out? Presumably the terms of the pension plans for police officers were not a secret, but rather, were available to anyone willing to do the due diligence when choosing a career path.
And the same would be true for government pensions.
I don't understand anyone complaining about pensions for teachers, police officers, members of the military, or any government employees. Instead of complaining, why didn't those folks pursue those careers?
And no - I am not a teacher, a police officer, or a government employee, and never have been. I worked for a mid-size non-profit for 25 years.
And unlike police officers and members of the military, I didn't have to put my life on the line every day at work.
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brett
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Pensions, DB and DC, are not are perq. They are part of a total compensation package that includes salary, benefits, pension, etc, etc
I worked in IT. We often hired folks from the public service positions because we paid substantially more salary. In fact, some areas of the public sector hired our consultants because their pay scales could not attract the same talent.
We paid more salary, but our pension plan was not nearly as attractive. There is always a trade off.
I have a much lower pension now that if I had spent my entire career in public service and ended up with a gold plated indexed pension.
But I also gained financial independence though the exercise of stock options and RSU's from my employer.
I worked in IT. We often hired folks from the public service positions because we paid substantially more salary. In fact, some areas of the public sector hired our consultants because their pay scales could not attract the same talent.
We paid more salary, but our pension plan was not nearly as attractive. There is always a trade off.
I have a much lower pension now that if I had spent my entire career in public service and ended up with a gold plated indexed pension.
But I also gained financial independence though the exercise of stock options and RSU's from my employer.
jr6035
Recycles dryer sheets
As a retired cop, I knew I had a pension waiting if I made it for 20-25 years. I did 26. But I wanted to be a cop since I was a kid. When you're a rookie, it's still fun, you don't think about a pension. OT? Yes. After 10 years, then you start your forward thinking. But make no mistake, I was also investing on my own from the beginning, so my pension would be supplemented, which it is. And I still add to my taxable account every month. But I also didn't "over mortgage" like many do. Paid off 2 houses, no debt. That was my choice. If I started over today? No way in hell.
This is why I got a government job. It pays about the same, but I also get the pension, and more PTO. if I could get more in the private sector, I 100% would pursue that. But I doubt I'll stay long enough for the pension to grow to be some meaningful amount.
meierlde
Thinks s/he gets paid by the post
It should be noted that railroad retirement plans are actually a government retirement plan, and technically the first tier is identical to social security. See the railroad retirement board for details.
