Lots of retirements March 1. Why not wait for PIP/PIL season? It’s only a few more months of misery. And you could be saving someone else’s job.
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The perceived penalty of early retirement is a 5% annual reduction before age 60 and a reduced benefit of 1.6% for years of service. The approximate discount is then about roughly 7% per year for those retiring “early” before age 60. But as some have pointed out, if you factor in the lump sum discount tied to Corp bond rates that are increasing, the discount effect is reduced. For those who retired last year and took and invested lump sum, most are up at least 20-25% in their retirement accounts. This more than offsets the lump sum discount and also provides for an incremental 1-2 years salary equivalent. So if you think overall stock market will go up 7-12% in next 12-18 months, and are age 58 to 59 and planning on retiring in next one to two years, the math actually makes sense for considering retiring before lump sum discount rates move another 1/2 - 3/4 points higher when looking into late 2022 and 2023. Your higher lump sum and investment returns may very likely more than offset the extra year or two of work without even considering your physical and mental health benefits of pulling the plug sooner rather than later.
@2ili+1f8NNds4
Like many others, I will retire on June 1st and I have no intention of filling out a PDS form. I’m aware that our toxic management will still include me in the ranking by faking a form and then will rank me in whichever way suits them better - which is not different from “regular” ranking.
That is the ultimate and final insult to the employees.
I will be crying all the way to the bank.
@xdc+1f8NNds4
In the past when I’ve done ranking sessions, depending on when the person left, they would sometimes still end up on the ranking list. We would use those people to fulfill our quota in the 5th bucket. It was a nice middle finger to the silly force distributions.
Op, I wish that last part about saving a coworker's job is true, but it is not. Last year, my friend who was retirement eligible offered to retire and the local management said that the die has been cast. The company was determined to have certain % of PIPs. It wasn't about performance, because the percentage changed several time before the final % was decided. It was a quota that was dictated to them that had to be met. The C suite and the board are truly some greedy, evil people that have no integrity whatsoever. I'm getting out as soon as I can. If after record profit they are still treating employees like dirt can you imagine the next downturn? Get out if you can because it will not get any better.
I took LS last year and got an 18% return on my 50/50 portfolio from March to YE vs 5% reduction in pre60 retirement discount so there is that.
@1mbm+1f8NNds4
You must be in management.
HR won’t let supervisors use resignations to fill PIP quota. I know because I tried to do this and HR said no. HR thinking is if the person wants to come back their personnel file needs to reflect actual ranking.
Because half my coworkers suck and deserve to be PIPed. We’re desperate for people in some areas, but in mine we have an oversupply of useless people who deserve to be PIPed.
Not only is that not how the process works, if you have 100 ppl in an org, 8% = 8 ppl.
If one person in that team retired earlier, what's 8% of 99?
Why wait around in hopes to help an unknown person when your own best option and livelihood are now?
The rates for Q2 2022 have been announced on January 15 and are already in the pension calculator. The segment 2 rate, which is the most influential for the lump sum, went up from 2.5% to 2.72%.
It depends on the salary, but for many REs not 60 yet, what they loose on the lump sum because of this rate increase, they gain it back by being closer to 60 (less of an early retirement penalty). The net gain is that they keep getting the salary for three months.
That’s why there will probably be more people retiring on June 1st than on March 1st.
For those rare REs already over 60, March 1st is the best date - not many of those left!
If EM were to announce a policy change: “no more 5% penalty per year for leaving before 60”, almost all people 55-59 would leave before end of day today.
@rwi+1f8NNds4 You can already figure out the segment rates for 2Q22 based on the interest rates for High Grade Corporate Bonds found on FRED. Should be something like 1.09% up from 0.68% (see Yammer Retire in Five).
Whoever thinks that by retiring later this year you “save” somebody from the PIP doesn’t know how the process works. You don’t get to bargain how the company uses your retirement, so it’s just du_mb to expect somebody to take a hit on their lump sum for the illusion of “saving” some unknown person. Dallas is glad to get all the retirements due to increased interest rates AND the regular 8% in PIP “tributes”.
"you could be saving someone else’s job" yeah like XOM employees care about other people HAHAHA
Funny, was in the same situation last year this time. With the economic outlook, figured that extending thru to the next cycle would be worthwhile, and it was. Swallowed my PIL and "retired" during the 4th quarter. Lump-summed out in Q1 2022. 3 month paid vacation was awesome.
Was able get another 5% towards my lump (years of service) and the additional interest rate benefit (lump bump) in Q1 2022.
Be careful with EMBSC as they are not very clear in their communications.
Take that as a blessing. Need 6 to 10k more reduction to make the number. With hirings in low cost areas, kltc/btc, north America and west Europe bloodbaths have to continue for least two three years
Interest rate is the reason. You’re are right that they could be saving someone’s job by taking the PIP hit, but it actually doesn’t work that way. They’d have to be PIP’d, then file for retirement. They were not allowed to trick the system last year. I know a few people who volunteered to be NSI’d and they said no.
Think of this though, what a sad state the company is in when retirement eligible people are seen as saving other peoples careers by finishing on a sour note.
- Most people take lump sums
- Interest rate is going up
- They don't want to be bothered by another performance assessment cycle
They couldn’t stand it any longer?
Some could not wait because the increase in interest rate would reduce their lump sum retirement payment by more that 4 months of pay.
In 2 weeks, the next interest rate will be announced. If trending significantly higher, more will retire because decrease in lump sum exceeds monthly pay and end up working for free.
I saw this 10 years ago when interest rates increased so significantly that people had to retire years earlier than they planned.