I don’t really understand why, but my lump sum amount hardly changed, and, yes, that’s using the new rates. I ran the numbers for June, July and August. Some co-workers took much larger decreases, but they are younger, so that may make a difference? I really don’t know.
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@3uae: Thanks. I have a service pension, and the lump sum amount shows very little change with the new rates. Maybe age figures into it somehow. I saw younger co-workers drop about 5% or more, mine dropped 1%. I don’t really know why an older person would drop less.
Roughly speaking, your retirement package gets better in this order, based on these milestones:
At 5 yrs service, your pension funds are VESTED. If you leave before 5 yrs, you get nothing. If you leave after 5 yrs, you will get a pension, but it may be small, and you can't start collecting it before age 65. We may be talking around $100/month in some cases.
If you want to retire before 55 age or 30 yrs, you can leave and take a REDUCED pension. The company considers you to have retired early. You get money, but it is reduced, and you have no benefits like medical, etc.
Once you get to 30 yrs service, or 25 yrs service, 50 yrs age, you can get a SERVICE pension. With this you can get money and receive all the benefits, etc.
The best place to be is getting SERVICE pension, NOT REDUCED for early retirement.
I’m the OP. I have to admit I don’t know the difference between, vested pension, service pension, unreduced pension, etc.
These are 4 different things:
Pension, vested pension, service pension, inreduced pension.
OP, which one are you? That maybe why it barely changed.
Did you hit the magic number? If not it will not go down, when you do it will drop drastically when the gatt rate going up.
@bow Could you enlighten us on what are the other things besides GATT that affect the lump sum amount? I'm trying to become knowledgeable about how the lump sum is figured but it seems like some aspects of it are PFM. (Pure F%$# Magic) Even when you call benefits to ask these questions I think they are mostly reading from a script and don't know the answer to many questions.. Thanks in advance for any tips.
Wrong....your lump sum takes a huge jump at 50 years of age and again at 30 years of service. It is based on life expectancy and will peak around 55-57 years of age (provided that you have 30 years of service) then start to decrease the older you get. The gatt rate affects it but there are other things that influence it also. The gatt rate going up will make the lump sum go down but the other influences could make up for the loss. If you go on “about you” on the company web and look at your buyout, it will list the “other influences that affect the buyout.
The younger you are the larger the sum. It is based on life expectancy. So if younger you will be paid for a longer term.