Congrats to all of the retirement eligible employees, especially those that are ready to retire now. Going out the door with a nice cash payment and freedom on the other side of the revolving door.
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Unless the pension is indexed to inflation, you’re probably better off taking the lump sum and investing it yourself, especially with current low discount rates.
Just to be clear, the % reduction on the pension is based on when you commence benefits rather than when you retire. So, if you retire at 55 but don’t commence benefits until 60, you get 100%. The reason for the % reduction is to compensate for age. In that scenario, you can use savings plan from 55 to 60 to bridge until you get pension. No savings plan early withdrawal tax penalty due to irs separation from service exemption.
Really a Shame that people are being fired Just for being good scientists, Giving honest input, and for being overheard expressing their opinions And accurate assessments of the management’s Poor performance and bad investments. The management just does not value technical work. As they continue to fire more technical people, the managers will be managing fewer and fewer people who actually do the work, and the company will fail even faster.
@2rsa+17HbJ5Ny That was not my post, but there are fundamental flaws in your NPV logic.
First, if you are forced out at 55, you get 75% of the pension value. If you stay until 60, you get an additional 25%. 25% / 75% is 33.3% more. The 33.3% is guaranteed if you are not forced out early. Are you guaranteed the stock market will be 33.3% higher in 5 years? Of course not.
Next, if you work until 60 versus 55, you earn 5 more years of salary.
Also, if you work an additional 5 years, you get 5 * 1.6% per year = 8% higher base for the annuity, which also translates into higher lump sums.
So you need to factor these facts into the net present value calculations, and you will see there is a big difference.
Hope that clarifies the logic for you.
@2wsy+17HbJ5Ny
Please clarify my maths.. if you are taking out money (if annuity is starting at 60, you are getting paid for 5 additional years and if you are taking lump-sum you are getting PV) early and consider PV and growth in 5 years —> the net sum is no different in terms of present value of total retirement benefit if you satisfy 15+55.
Where is this 17.5% loss coming from? I am amazed that are you saying that if you take 5 years worth of additional payments from 60 to 65 and add growth to it you are still getting 17.5% penalty?
Please explain this with logic for the benefit of everyone
@Spitworthy - why on earth do you assume that everyone in the "retirement eligible" bucket was in a position to do anything about the way that the company was run or the high level strategic decisions that were made ? Like many other people in this group, I was an individual contributor - a scientist, not a manager. I just got on with my job, doing it to the best of my ability - which (if my knowledgeable other feedback was to be believed) I did darned well.
However, I was NSI'd back in July. Considering I had always been a "good" performer in the rankings and had a better, higher achieving, more collaborative year than previously, I expected to be safe. So why was I NSI'd ? The only thing I can think of is that I had a track record of giving my managers the benefit of my honest opinion, which they often didn't like. I wasn't a "yes man". I spoke the truth about my projects and gave my honest scientific assessment on issues where I was consulted. I am sure that I have been overheard (by the coffee machines, in the corridors) criticizing the investments in XTO, the algae work, the carbon capture work, the endless cycle of reorganizations and relocations. This probably gained me a reputation of being "difficult" or "hard work", for management, but I didn't care - my co-workers and customers valued my contributions and I was ranked well.
Everything changed in the 2019 rankings, where they changed the rules about how far you could move up or down in the rankings and intentionally increased the size of the NSI group. Now my current manager had a way to remove me, with the blessing of HR, Law and senior EMRE management. They probably also guessed that being "retirement eligible", I would go down without a fight and just take the 3-month PIL (they were right, because I figured that the PIP would be unpassable and I wasn't allowed to see it before making my decision).
And finally, being retirement eligible doesn't actually mean that you can afford to retire. If I took my pension now, I would lose 17.5% of the amount because I am not yet 60 years old. I can't afford to lose that. Likewise, I can't afford the taxes that would be applied on my 401(k), so I have no alternative but to look for new employment .... and how many companies will be looking for an experienced 57 year old ?
Those retirement eligible now should be prosecuted for allowing the company to get down the drain under their watch and now are walking away for a huge amount of cash for worthless job.
Got PIPed last summer; took the three months PIL and have not looked back, cant imagine having spent three months of PIP pressure cooker and then missed the mark; been a great three months
hearing that the voluntary offer is now work until end on Jan 2021 and then four months severance pay, not much of an offer;
glad I got three months of paid PIP free living; hope all improves soon
No one mentions the penalty for retirement. It is 5 percent per year before age 60. With this penalty. 4 months salary is not an incentive. If they would have added 2 or 3 years to your age. Then u would have more people 57 to 59btaking the voluntary package even with just 4 months
The risk is MLRP during next ranking cycle and not collecting the pension until 65. If 55 this year, that is quite a long time to wait.
For anyone retirement age the risk of staying is the possibility of getting cut and let go with no 4 months of salary, no 4 month incentive. Kind of an ugly reality but at least the retirement eligible employees have an option that lands them on their feet. It’s risky to stay if you are in the bottom half percentile of the performance.
@lpv+17HbJ5Ny Well said. Very thoughtful. People need to step back and stop trying to judge everyone else. We are all at each others throats. Look what XOM has done to us.
Some might be ok, others might see it differently being forced into retirement before they are ready and might have very high anxiety. Especially if they are supporting their parents and children and a pile of debt from all. If they are 55+ they are looking at living another 25, 30 maybe more years. That money has to last a long time, so they realize they will need to work. Who is going to hire a 55+ year old? There are probably also younger ones who come from financially able families that can carry them until they find another job. It is very scary, do not assume you know anyone's situation and be so arrogant. It is sad for everyone.
@drh – 4 months + 6 weeks vacation for next year
Am I missing something? My retirement eligible coworkers who were forced out in the summer got 3 months PIL. This round pays 4 months. Big difference!
It could be a very, very nice payment because the pension discount rate is pretty great right now. If I had the option, I’d take it.