Thread regarding IBM layoffs

IBM Pension

How much is the average IBM pension? Are we talking 6 figures?

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Post ID: @OP+1aY56fW7

15 replies (most recent on top)

It might be 6 figures if you count those after the decimal point! I've been getting 21K/yr for the past 25 years (which is more than my cumulative salary for the years I worked there)!

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Post ID: @6aop+1aY56fW7

They contrib an automatic 2% & match up to 6% of your election.

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Post ID: @3gqd+1aY56fW7

Where does the 2% 401k match come from? I thought the current match is 6%. New employees for Kyndryl will be given 3%. Or are you saying it was reduced by 2% from 8% to 6%?

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Post ID: @3nsc+1aY56fW7

I'm ex-IBM and UK based. I was in the Money Purchase Scheme (defined contribution), rather than the defined benefit arrangement that used to exist 120 years ago. To be fair I've mainly stayed in stocks and have about £300k / $420k in my fund having had good growth over the last decade. But then that is nothing to do with IBM, the fund is outsourced to a pension company.

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Post ID: @2spc+1aY56fW7

IBM stop the pension plan. When they did stop it they would match a max of 6% to your 401k plan and add another 2%. As money was going south they change the 401k match to 2% max.

If you were employed 2001 or earlier and you have some pension money. You can check if you have pension money or just 401k money or both by going to netbenefits.com/ibm

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Post ID: @2upw+1aY56fW7

Just FYI, the IBM US pension fund is well fund but IBM has been adding to the overseas pension funds

https://www.pionline.com/pension-funds/ibm-add-300-million-non-us-pension-plans

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Post ID: @1cgn+1aY56fW7

I could see IBM at some point wanting to unload their pension plan to an insurance company.

If you google companies that have done it you will see names like Lockheed Martin (2019), GE (2020) and Verizon (2012). A lot of these companies did not transfer all of their pension obligations, just some of them (remember a lot of these companies have unions).

A comment about the future health account (FHA). Everyone has x amount of dollars in their account.

A CFP from AYCO told me that most people should use it up quickly because it is not really your money and IBM could reduce it or do away with it if they wanted to. His advice (example) was this: if you were planning on using it to pay 1/2 your health insurance premium, then pay the whole premium with the FHA and bank the 1/2 you would have paid for use later on.

Another thing he said was never run the FHA down to a zero balance. Always leave a little money in it because if you run it to zero you will never have access to any of the IBM plans again. If you leave a little money in the FHA account then it keeps the "door" open and you will have access to the IBM plans. (maybe one year they will be the cheaper plans you can find)

Just thought I would pass that info along.

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Post ID: @1hqi+1aY56fW7

Ibm could try to unload the pension for a profit (currently it’s over funded by 3-4%), BUT IBM’s pension must comply to the feds rules which are quite strict due to the federal pension guarantee rules, so unloading it seems like a lot of work for 3-4%. Would IBM do it? Maybe But again the federal rules have gotten much tougher since the early 90’s when you could adjust interest rate assumptions and make a profit center out of you defined pension plan.

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Post ID: @emx+1aY56fW7

IBM may try to "de-risk" (i.e. unload in a legal way that leaves ex-employees helpless) its pension obligations during the restructuring.

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Post ID: @tjm+1aY56fW7

My IBM pension is just over 20K. Spouse will get 70% if I die first.
401K is the only reason I could retire when I wanted to.
Co-workers that did not pound money into their 401 will be working far longer than they expected.

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Post ID: @zuq+1aY56fW7

There are 3 pension options from IBM.

  1. Old pension (if you were within 5 years of 30 years of service on July 1 1999)
  2. Hybrid pension (if you were 40 years old and had 15 years of service on July 1 1999)
  3. New pension (essentially 401 k)

In general IBM tried to make your pension worth approx 1/3 of your final earnings (approx 35-55k per year). Your mileage may vary depending on your final earnings year, BUT the 35-55k for USA employees is pretty standard. NOTE IBM only included medical (7500 dollars worth) for the old pension, they included FHA (lump sum collected over 10 years) for the Hybrid (once used up, you are on your own), and you are on your own for New pension. Six figure pensions is quite quite rare

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Post ID: @txq+1aY56fW7

IBM gives you a whopping 2% match on your 401k.
You'll be living the life of Riley bruh lol

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Post ID: @qoo+1aY56fW7

The only people with pensions are older workers who were put back into the pension plan back in 1999. If I remember you had to have at least 15 years of service and be 40 before July 1, 1999 I know people who had the years and missed the date by days.

I remember friends telling me that their pension was not as much as people thought. The programmers I know who received pensions most were in the range of 35-45k a year and then it depends on what options you took, signal life or a survivor option. IBM offered lots of options

The only way the avg persons pension would be considered 6 figures is if they took a the lump sum option. They they would have a lump sum and a small monthly pension.

I have not idea what P-M is talking about. Also IBM froze the plan in 2007.

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Post ID: @pka+1aY56fW7

Ibm should stop all pension and fire all middle managers

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Post ID: @qle+1aY56fW7

$7,333.00 / month after 3 months service. Then 10% increase every 12 months.

Full medical also.

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Post ID: @pom+1aY56fW7

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