brett
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Apr 24, 2010
- Messages
- 5,926
I retired from Megacorp several years ago. I am just in the process of finalizing my DB pension. The company that I started with was bought out twice. My original DB plan was kept alive and I was grandfathered-though there are not many remaining members. It is well funded. Admin was outsourced to one of the biggies who do this.
I finally signed-after eighteen months and FIVE different pension estimates. The final number is about 40 percent higher than the first quote. I started the process early as I anticipated an issue.
Why did this occur? No one was trying to cheat me...it was lack of information, lack of a solid understanding of the plan, etc. etc. I was fortunate, I kept a critical document from 1996, all HR pension memos, and every annual pension statement. My issues concerned the penalty for taking early pension and more importantly the ability to include bonus money in pensionable income(I had some large performance bonuses in my last six years). I also read, and re-read the pension document and the subsequent amendments to the plan. This knowledge allowed me to keep asking questions, challenging numbers, etc. until I got to the number that I felt was correct-based upon the data that I had. The increase in commuted value from version one to version five was slightly under $400K.
I am not a brain surgeon. But my learnings from this are understand the details of your plan, keep every memo and document, and do not accept a number that you cannot reconcile just because it came from the 'pension department'-internal or outsourced, and do not be hesitant to challenge the number.
Prior to this, I did an audit about eight years ago and found out that the company was not matching my voluntary contributions to this hybrid DB plan. It was an accounting error over six years @ $1500. per year. That added $9K to my fund for buying top ups etc.
I sometimes wonder how many people just take the number they are given without completing any due diligence.
I finally signed-after eighteen months and FIVE different pension estimates. The final number is about 40 percent higher than the first quote. I started the process early as I anticipated an issue.
Why did this occur? No one was trying to cheat me...it was lack of information, lack of a solid understanding of the plan, etc. etc. I was fortunate, I kept a critical document from 1996, all HR pension memos, and every annual pension statement. My issues concerned the penalty for taking early pension and more importantly the ability to include bonus money in pensionable income(I had some large performance bonuses in my last six years). I also read, and re-read the pension document and the subsequent amendments to the plan. This knowledge allowed me to keep asking questions, challenging numbers, etc. until I got to the number that I felt was correct-based upon the data that I had. The increase in commuted value from version one to version five was slightly under $400K.
I am not a brain surgeon. But my learnings from this are understand the details of your plan, keep every memo and document, and do not accept a number that you cannot reconcile just because it came from the 'pension department'-internal or outsourced, and do not be hesitant to challenge the number.
Prior to this, I did an audit about eight years ago and found out that the company was not matching my voluntary contributions to this hybrid DB plan. It was an accounting error over six years @ $1500. per year. That added $9K to my fund for buying top ups etc.
I sometimes wonder how many people just take the number they are given without completing any due diligence.