Any word about the direction pensions will go? For those of us close to drawing down our pensions is it correct all of our benefits are grandfathered in?
8 replies (most recent on top)
Agree with the below comment. It'd likely be similar to what Disney did in 2012 and stop offering the pension to new hires after a specific date. Those new hires not eligible for pension would get a beefier 401K plan to semi compensate. Those grandfathered in keep building their pension (again, loosely guessing/basing this on what Disney did). At least that's what I hope they'll do instead of freezing it for all.
Your pension isn’t going anywhere. It’s fully funded. They may eventually quit offering it to new hires. But they aren’t gonna take it away from those vested
I’m not counting on Pension. They are laying off 15k plus employees. My supervisor who’s getting ready to retire said they have been planning to phase out pension for a while after the Enterprise structure study in early 2000’s. My friend at the Bank was told yesterday to prepare for change. I’m going to look into opportunities in the Hub.
Good luck everyone I think it’s going to be a rough year.
Im with the last post. At this point I'm shifting my attention to the 401k. Save till it hurts. Pension just feels iffy now. We are losing policies ie market shares left and right. Counting on the pension seems like a stretch especially when you have 10+ years to work.
I have almost 20 years until my retirement date. I came in around the dot com bust..so that made me skeptical of social security, knowing how the government has been using it as a bank for bad fiscal policy. I also didn't think I'd be around long enough to get much out of the pension, so I did the 401k and a Roth IRA until it hurt and would consider pension and social security money as gravy money or possible earlier retirement. Every year, it seems like it was a wiser choice than I realized.
Best advice I can give to those with some time before retirement. Save early, save until it hurts, take advantage of 'free' matching money and tax shelters, and diversify
They can't take away the pension in the sense that you will be left entirely high and dry with 0 money. They'd most likely freeze it and you'd receive what you're currently set to get and then no more..and offer you a lump sum buyout. I don't know what rate they use to calculate the lump sum, but it seems pretty high judging by the low numbers I've heard of former employees and a recent retiree taking the lump sum to a financial advisor. The financial advisor couldn't match the yearly payouts with an annuity of reasonable safety.
A lot of people have assumed that the pension would never go away and based their retirement plans on that fact. Especially those with 25+ years in the company But that fact isn't very solid these days. Rumors have been around for the past several years about them getting rid of it. I always hear about a 'magic number' of years of service added to age..anywhere from the high 60s to 80.
With the new regime, I expect them to do something in the next few years. Ed was always adamant about protecting it, but now we have heartless numbers people in charge.
Maybe the new risk strategy is to move everyone's jobs so they leave the company, offer low buyouts and then demoralize new employees to quit before they become invested in 5 years. I'm sure that's a benefit to the 'hubs' Employees can more easily find other jobs in bigger cities, where you were kind of stuck with the farm if you lived in Bloomington
It appears this is from a CURRENT RETIREE who is drawing down benefits at this time: your benefits area safe.
There is no word on this yet. The last time Tipsey said something about this was one year ago and he said they are always looking at whether they will continue the pension. There are multiple ways the company could go: They could freeze benefits where they are, they could offer a lump sum to employees of their pension amount but it would not be the full pension obviously. There is no rule that says they have to grandfather in current employees. It is entirely up to the company.