So now that rates are updated, what was your impact? Do you plan on retiring?
My impact: ~200k .
Plan:
I originally thought I would stay put but I never thought that they could just convert our pension next year, so now I am leaning toward retiring.
If I retire Nov 30, 2022 I will get 17.5% more than if I wait a year and retire on Nov 30 , 2023. Also with the Fed increasing rates through 2023 the lump sum will continue to go down through 2024. I am retiring this year. Bye-bye Blue Oval taking my money and investing it wisely to create my own annuity in A-rated 5 yr corporate laddered bonds paying 6%. The extra lump sum money will be invested in S&P500 index and take advantage of this pull back.
@erj+1iUA77ze "I am gambling they will keep me because my position is highly specialized."
You said it yourself. You are gambling, just not only with your job, but with the nest egg you built for so many years of work.
I apologize in advance for what I am about to say. This is your decision, and IDK you, but I think you may be making a mistake. If you lose your job, let's say on March next year, how would your plan look?
Severance pay is only done to avoid or minimize lawsuits. The company would probably give you 6 months of salary and health insurance. Is this enough to compensate losing your 15%?
If you retire, you could opt for COBRA for up to 18 months. Maybe that's not enough time for your needs.
If you are in a highly specialized position, doesn't that mean you can find another job very easily? Maybe with more benefits? Take an actually look at the market, see if you can get an offer in the next weeks.
Have you explored the option of coming back to Ford as contractor? Talk to your manager about it. That way you could keep your position, get some salary/benefits and still get your pension intact.
Banking on something you don't have control on (your job) to get certain results is typical of younger people. Older folks should be very logic and rely only on facts, not "hope". If you sc--w it, you won't have enough time to fix it, like young people do.
I have known people so sure of their jobs, get the shock of their lives because they were let go. The truth is nobody is indispensable. Do you think that if you die or retire tomorrow the company would go bankrupt? The company will find another one to do your job. So what is stopping the company from letting you go NOW?
Please don't pin the rest of your life to an empty hope. Take matters in your own hands, even if you are not used to financial decisions or switching jobs. Whatever you decide, I wish you good luck.
@ntz+1iUA77ze "looking at 10 year Treasury bonds. If they hit 4% I may put $1M in"
Thinking the same with lump sum. If you don't need this money for 10+ years and are looking to diversify, then with 5 & 10 year Treasuries already at or near 4% and CDs around 4.5%, this seems like a good strategy. If you can wait until January, then there should be a couple of more rate hikes and yields will likely be 5+% and growing tax free in an IRA.
To poster who said "They gave 2 years notice to say you could no longer accumulate additional service credit after 35 years. Educate yourself", I say, they gave 5 minutes notice to 25 to 30 years of service employees that they were let go........educate YOURSELF!!!!
For those who consider staying keep in mind quite a bit of NA work going to Mexico. A few years ago, they built a state-of-the-art design studio. Why would ford build one there when your market is NA?
You are gambling and they hold all the high cards
Do not believe anything Farley tells you. if i were sitting next to a window and it was daylight he walks in and tells me it is daylight i would still get up and go outside to check. I don't trust him after what he has said about us.
Still not buying it. To terminate the plan and convert it to lump sum, there are rules that must be followed per the government. One of those is 60 days written notice so you could always still retire and get a monthly annuity. They gave 2 years notice to say you could no longer accumulate additional service credit after 35 years. Educate yourself.
Last poster answers his own question.
If they convert whatever your lump sum amount is into the FRP 401k account, they've totally derisked it!! There will not be an option for the annuity.
If you don't think this is coming, then you are smoking crack.
Where is this Ford converting pensions to 401k lump sum in 2023 coming from?
The plan has already been de-risked (and becomes more de-risked every time someone takes the lump sum over the monthly annuity). It was closed for new participants in 2014 and closed to accumulating more than 35 years of service last year. Bob Shanks shored up the investment returns to match the outgoing liabilities. It's over 100% funded and has been for the past several years. And the government Pension Guarantee that we belong to is also fully solvent.
Sorry not buying some wild speculation.4848
20%
My plan is to use the lump sum to diversify. Actually looking at 10 year Treasury bonds. If they hit 4% I may put $1M in. $40k/year with no state taxes is ok with me.
Mine drops 19%
19 and a half percent.
25%
I lost 24%.
I am not the op. My impact is just under 200k.
I am staying. My impact will be down 15%. Here are my reasons:
I'd be more interested to know what the percentage decrease is vs. the dollar amount that somebody lost. The dollar amount lost is only relevant if you know the percentage decrease.
I'd be more interested to know what the percentage decrease is vs. the dollar amount that somebody lost. The dollar amount lost is only relevant if you know the percentage decrease.
Monthly annuity option is not affected by IRS interest rate tables. One can prove this out by using the retirement projection tool, playing out two cases retiring nov 30 or a month or two after that.
The legality and likelihood of Ford freezing pension and forcibly converting to 401k next year is something to be discussed and researched. I do not have much history or background on that.
Many employees will be caught off guard when the freeze the pension and roll it over to the 401k. I do not trust Ford Management, so I will be retiring.
That lump sum is pre tax dollars.. It will take more that 2 years to add that to your 401K. Take it and invest in a down market and realize a double windfall when the economy hopefully rebounds.
They give you the option to take your contributory after tax as cash but mine is rolling to a Roth IRA.
Farley did a real sc--w job by not allowing a voluntary. Give them something... It just is not right that I was rewarded with 9 months in the last SIRP...I was just plain lucky.
I consider my 33 yrs at Ford very rewarding. I was a loyal employee but I will always hold a grudge the way I was treated on my last day. It is a shame they did not trust I would do the right thing even when I told them that I was willing to go if they needed heads. It no way to run a company.
Is the pension affected if the monthly annuity option is chosen vs lump sum?
To the OP
If your lump sum will be cut 200k, it means you’ve got $1M built up. That definitely is something to protect. If you are GSR that is likely meaning you have 30 yrs at least of service. If you are GSR that 200k cut is 1.5 ~ 2.0 yrs gross salary. So it means you are working the next 1.5-2 yrs for free. Numbers are approximate.
We are in a continual rising rate environment, it is likely the federal reserve will need to keep continue raising rates from here up to 8% to tame inflation of 8%. Those interest rate tables have a high chance to keep increasing.
So unless you were considering working more than 3 yrs it is wise decision to take the lump and run now.
Alternatively, if you like your job, don’t need to retire, and like your annuity payment, that is an option to consider. There is risk there too.