I’ve heard that the pension is a gradual increase from 0-25 years, then increases significantly from 25-30 years, then tails off from 30-35 years? Is that generally how it works or is there a certain year of service that triggers an increase, and then gradual immediately after that?
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@2biv+1nt4Wure - PBGC does not always cover 100%. It can cover as little as 45%. Talk to your Financial Advisor. Call PBGC. I was given that information by both parties.
@2biv+1nt4Wure - Yes, it is.
I can confirm any lump sum pension includes the supplement you get up to age 62.
@2ydk+1nt4Wure. The only spike is the early/interim retirement supplement. The pension formula adds for years of service and subtracts for years before 65. If you opt for the lump sum pension payout, there can be large spikes or decreases due to interest rates every calander year.
I was also told that if you take the lump sum before you are 62, that the supplement $$ are included in the lump sum payment. Can anyone confirm that?
There is a 'spike' at some point. I believe it is a combination of years of service and age. I had 29 years and did projections and did see any significant increases after 30 years. A coworker did some estimates on his pension and he got a 40% increase after reaching age 55.
Chrysler and GM both went bankrupt and both my salaried friends continue to receive their monthly checks.
Frankly, if Henry Ford thought you would live to be 55
he never would have hired you.
Trying to bring that back.
The pension formula is approximately 1.5% (years of service up to 35)(salary)(%reduction factor for years before 65). Plus the interim/ early retirement supplement. The pension appears to ramp up 25-30 years because of the early retirement supplement and you are getting closer to 65. Lump sum payments appear to decline as you have greater than 35 years not because of years of service, but there is a life expectancy value in the present value calculation. The details are available online, and you can always run the calculator.
There is an interim retirement supplement, eligible at 55, and there is an early retirement supplement, eligible at 30 years of service. The early retirement supplement is worth approximately 1000 a month more. It is payable until 62, so don't work until you are 61.9 to get the added amount for 1 month. Also remember that your full pension calculation is based on retiring at 65. If you retire early, it is reduced a few percent for each year before 65.
Understand rule of 55 and what a 72t is if you are under 55 yrs old. Getting to 401k money, ira and pension is tricky.
@OP there are a couple things of note. Once you have 30 years of service or are 55 years of age and have at least 10 years of service, the retirement package includes a supplemental benefit until you are 62. So let’s say you started at Ford straight out of college and had 30 years in by 52. You could retire and draw your pension immediately along with the supplemental. BGC was quite crafty in laying off people under 55 with not quite 30 years in and those over 55 with not quite 10 years in. Those people took a significant pension hit.
Pension benefits do increase with the number of years of service up to 35 years. However, if let’s say you had 20 years in at Ford and were over 55 you would get around 2700 a month vs around 3700 a month at 30 years in.
You can run the projections yourself to see how pension changes for different retirement dates. As for bankruptcy, PBGC would take over if that were to happen (though it might pay a reduced amount).
You don’t get Jack squat once ford files bankruptcy.