If want to get rid of people without pi----g off entire workforce with the PIP system:
Eliminate the penalties for retiring between 55 to 60. Currently there is 25% penalty for retirement at 55.
Many people between 55 and 60 would leave voluntarily without pi----g off the entire workforce.
No need for PIP and the higher paid employees are the ones leaving
The percentages are a Federal requirement and meant to adjust the benefit provided to the additional years being provided.
@OP Maybe, may be not.
Personally, I doubt many people would start retiring at 55 if there wasn’t a penalty. The level of whining here and elsewhere (not unjustified, but whining nonetheless), shows me that most of the 55 & ups see themselves as uniquely entitled to their positions and pay grades. In a sense they’re right; EM is a declining behemoth using mostly legacy systems. May as well retain the dinosaurs to keep the fossil fuels flowing.
The safety executives would veto this idea because the company would lose too many people who religiously cling to the handrail.
Completely agree with @wcq. I am also NRE and would be off this sinking ship so fast there would be a wake vortex behind my a-s.
Actually if the company had offered more than 3 months to RE folks last year during the layoff the number RE leaving would have been huge.
I am NRE and would retire in a heartbeat if the company would bridge the years, I don’t think we will ever see this though.
Penalty applies only if you start taking the pension or lumpsum before age 60. The main impact of retiring between age 55 and 60 is lower credited service and lower 3 year average.
The percentage of pension received is based on BENEFITS COMMENCEMENT DATE, not Retirement date if the 2 are different.
The risk is - the discount factor aka “interest” rate. This TOO is determined by Benefit commencement date and is starting to climb.
Commence benefits at 55, today take 75% with a very low interest rate, commence at 56, get 80% reduced by higher percentage (discount factor).
If you invest wisely, could potentially earn more than the 5% year on a lump sum.
@tdv Based on the language found on the benefits page, your understanding would be INCORRECT.
Plan states: “The reduction, if any, depends on your age WHEN YOU START YOUR PENSION BENEFIT and whether you are a retiree or terminee.”
To correct my earlier comment, if you have retiree status, the benefit you receive increases by 5% each year starting at age 50, but ages 50-54 can only be considered retiree status if you have disability retirement.
If you terminate your employment without becoming a retiree (retiree being at least 55 years old and at least 15 years with the company), the % of your pension benefit is as follows:
65+ : 100%
64: 90%
63: 81%
62: 73%
61: 67%
60: 60%
59: 55%
58: 50%
57: 45%
56: 41%
55: 38%
So obviously easier to retire at 55 and wait 5 years than terminate employment at 54 and wait 11 years until your 65 to receive 100%.
It is my understanding that if you leave at 55, you only get 75% of your pension, even if your commencement date is set to when you turn 60, that 0.75 factor is still applied.
You do not get out of the 5% per year early (before 60) penalty by setting the commencement date into the future to 60.
Please tell me if this is correct.
Tell me an end date 3-6 months in advance (preferably Jan 2022 so I can get my vacation payout), with a nice severance and I’ll gladly leave.
Cheaper to PIP, which is the whole point of the corrupt and evil system of PIP.
Correct me if I’m wrong, but the 25% you are referring to is the fact that you receive 75% of your calculated pension if you begin taking it at age 55 and this increases by 5% each year until age 60 when you can take 100%. In fact, this starts at age 50 (you can only receive 50%) and goes up 5% each year you wait.
I’m almost positive you can retire and not elect to receive your pension until age 60 and still receive the full 100% amount, even if you retire at age 50. Obviously the number of years employed is one of the main variables in the pension equation and leaving early would lower your total possible compensation.
I would hope that if people wanted to retire a few years early, they would have enough saved in 401k or outside investment accounts to bridge those years until they elect to receive their pension.
I wouldn’t call this a penalty for retiring early. It’s a penalty for taking your pension earlier because the company has to pay you for a longer period of time (if you pick the annuity).
My a-s would be gone.