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I am a retired federal employee with a moderate sized pension that is more than 50% of my retirement income. About the safest pension you can have. But the annual Cost of Living Adjustment (COLA) formula for my "second tier" pension is already less generous than the Social Security COLA and there has been some talk in Congress/White House of doing away entirely with this COLA. I do get a little nervous that the pension could be seriously eroded by the time I am in my 80's but that is one reason that I worked a couple of extra years to pad my retirement income so I should be okay. The future of Social Security is more troubling as it could easily be cut 20% for higher taxable incomes in about 10-15 years from now. All of my retirement income is taxable except for a small Roth IRA and I am single so I feel that I am a target.
So my fear is the plans will go bankrupt and I may be subject to "claw-back" of a portion of my Lump Sum payment as part of the PBGC program to provide some level of pension income to the hundreds of thousands of eligible retirees.
I don't worry about my pension going bankrupt. It is a multi employer pension and is always over 100% funded.
Quote:
Originally Posted by numsgal
DH's pension is 138% funded according to the May newsletter. It is a multi-employer plan.
If you don't mind my asking, which multi-employer plans are these? All I read about are multi-employer plans that are in trouble, not multi-employer plans that are on sound financial footing.
My FA is telling clients to expect 3-4% real growth (meaning more money needs to contributed to IRA, Roth, annuities) if clients want the same standard of living in retirement as in their current working years.
I don't know, but I understand that pension reductions are within the PBGC tool-lot for resolving bankrupted plans. Claw-backs on pension and have been implemented in other countries, which means next to nothing.
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