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Old 11-04-2009, 07:20 AM
 
1,662 posts, read 4,012,728 times
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Quote:
Originally Posted by Keeper View Post
I too have seen ppl laid off before they could reach their 20 year pension to retire where I worked
But in a qualified defined benefit pension plan, they should still have an accrued benefit that is payable at Normal Retirement Age. No?

Again, are we talking US companies here?
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Old 11-04-2009, 01:26 PM
 
Location: SW MO
23,605 posts, read 31,547,683 times
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Quote:
Originally Posted by Samantha S View Post
But in a qualified defined benefit pension plan, they should still have an accrued benefit that is payable at Normal Retirement Age. No?

Again, are we talking US companies here?
"No!" is correct. In a non-contributary retirement plan you must put in the requisite number of years to become vested or you walk away with nothing. Think the military. It's 20 full years of service or you receive nothing at all. However, you may be eligible for Social Security benefits if you've paid in for at least 10.
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Old 11-04-2009, 02:24 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,704 posts, read 40,103,214 times
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Quote:
Originally Posted by Samantha S View Post
Is this a company in the US? Are these full time employees? Something doesn't sound right here.

If they have been earning benefits for over 10 years, and it's an ERISA plan, the company can't just take them away. There is a piece of the puzzle missing here.
Yes, US Company; They quit contributing to DPSP as soon as 401K's came around, and they had not had 'stellar' results on investments. Company had steeply declining market cap (Lost 50% in 5 yrs), CEO raiding liquid cash and mortgaging properties (from WAY black to Very red in 5 yrs. )

so... the question, will this company be around to pay a pension in 15 yrs, or will I be stepping in line with the Pension Benefit Guarantee folks, getting a few cents on the dollar? I left about this era (a yr earlier) http://www.nytimes.com/2006/10/24/bu...24pension.html (If Company Goes Bankrupt, Don’t Count on Your Pension NYT)

So I took the pittance (and 401k) in roll-overs, I think DPSP was projected to pay $165 / month at full retirement age. (That ought to cover it! (a couple days of medical premiums..))
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Old 11-04-2009, 03:20 PM
 
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Quote:
Originally Posted by Curmudgeon View Post
"No!" is correct. In a non-contributary retirement plan you must put in the requisite number of years to become vested or you walk away with nothing. Think the military. It's 20 full years of service or you receive nothing at all. However, you may be eligible for Social Security benefits if you've paid in for at least 10.
Okay, so this is a non-qualified benefit plan. That's the missing piece. Thx


Quote:
Originally Posted by StealthRabbit
so... the question, will this company be around to pay a pension in 15 yrs, or will I be stepping in line with the Pension Benefit Guarantee folks, getting a few cents on the dollar? I left about this era (a yr earlier) http://www.nytimes.com/2006/10/24/bu...24pension.html (If Company Goes Bankrupt, Donít Count on Your Pension NYT)
The most important part of that article is the line "For most people, the risks are not as drastic as the headlines imply."

The majority of people in qualified db plans have their full benefits (or darn close to it) insured by the PBGC.



Quote:
So I took the pittance (and 401k) in roll-overs, I think DPSP was projected to pay $165 / month at full retirement age. (That ought to cover it! (a couple days of medical premiums..))
Sounds like a smart move. But it doesn't sound like you "lost" any of your earned benefit. Did you? Were you not paid the lump sum value of your earned benefit?

I'm not trying to make light of either situation. But I also don't like to see these things get over-hyped to the point that other people panic and make decisions based on bad or incomplete information.

Headlines tend to do this. Articles like the NYT ones you referenced does this to a certain extent. It just bugs me ...
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Old 11-04-2009, 10:44 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,704 posts, read 40,103,214 times
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Quote:
Originally Posted by Samantha S View Post
..it doesn't sound like you "lost" any of your earned benefit. Did you? ...

Oh yeah, I got the whole enchilada and even a little severance to boot!! (taxed at 40%). So 'all in all' very feeble.

Due to a 6wk early layoff, I did lose healthcare for the 15 yrs between early retirement and Medicare; so $1,000/month x 15 yrs = $180,000 + FVM

800 Hrs of sick leave that would have been paid out ~$30000

Company gold / retiree card that would have allowed free overnight use of ~50 recreation sites around the world. ~ $100k value (my historical usage for 32 yrs was about 20 nights / yr on extended stays / & business trips, & weekends in France, Switzerland, and Asia, I would have used it much more in retirement)

I have many friends with United Airlines that are getting a small fraction of their vested benefit through PBGC. Most are driving school buses or teaching part-time. They should have taken up that occupation many yrs ago. I noted a newspaper article last winter of a couple in early 50's who retired on PERS school pension and were getting $120k/ yr deposited in their acct, while they relaxed in the South Pacific. Good gig! I have my eye on a nice bridge to live under till we get our new medical care plan.

Fortunately I have always worked 3 jobs or had side business ventures so currently still eating 5x/wk. My food budget is $100/ month. Property taxes & medical premiums are $1000 / month each. Not to worry, the recession is over
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Old 11-05-2009, 07:23 AM
 
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Quote:
Originally Posted by StealthRabbit View Post
I have many friends with United Airlines that are getting a small fraction of their vested benefit through PBGC.
Don't even get me started on the airlines and the many ways their pensions got jacked up. Suffice to say, on the blaming list, the PBGC doesn't even make the cut and their union reps are at the top. They are the ones responsible for that fiasco.

Yours does sound like a lousy layoff situation. But it also sounds like your qualified pension benefit was paid out in full.

Again, I'm not trying to make light of the way your company treated you overall. But I don't like to see people misled regarding pensions in general. Most people's defined benefit pension plan benefits are well protected as they are earned and vested. Most people in pay status from a pension plan are fully protected. I don't like to see people panic and stress over something unnecessarily.

If you are not sure about your pension benefits, ASK questions until you have a clear understanding. But don't assume that something that makes headlines in the NYT will automatically apply or happen to you.
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Old 11-06-2009, 06:36 AM
 
13,773 posts, read 33,958,617 times
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Where I worked you were 'vested' after 7 years however if you left before you were 60 and had 20 years your benefits were a pittance compared to what you got if you stayed. I know at one time I typed up some retirement checks that were less than $5.00 a mont, although I don't know how long they had been with the company. When 401K's were introduced then they stopped the pensions.

I know I couldn't have lived off of my pension at less than 1K a month and having no other income. Since my husband had died the year before I could collect his SS if I didn't work. I was lucky that I did not have a lot of debt but still I had a house note and insurance payments every month.

I often wonder if I should have stayed but at the time my mental state was more important. I was hurt because I loved my job and didn't want to leave. I know I probably could have stayed and would have been OK.. but it would have been tough.
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Old 11-06-2009, 07:23 AM
 
1,662 posts, read 4,012,728 times
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Quote:
Originally Posted by Keeper View Post
Where I worked you were 'vested' after 7 years however if you left before you were 60 and had 20 years your benefits were a pittance compared to what you got if you stayed. I know at one time I typed up some retirement checks that were less than $5.00 a mont, although I don't know how long they had been with the company. When 401K's were introduced then they stopped the pensions.
Yes, originally pension plans were designed to benefit people who stayed with the company for their whole careers. Nowadays, that just isn't a reality.

It's more important to employers to attract and retain new talent than it is to reward longer service employees.

Who works at the same place for 30+ years anymore??? Union workers and pubic service employees still do, but not too many others. Who still has pension plans? Unions and public employers.

In most other lines of work, younger, shorter service employees benefit more (in the short term) from a company matching or profit sharing contribution to their 401(k). It's also a more predictable contribution for the employer and so it's more attractive to both parties.

However, at the end of a career, the actual retirement benefits are (usually) much smaller. So the person has less to retire on and must rely even more heavily on personal savings (and hardly anybody saves enough) or social security (which is also likely to see decreasing benefits in future years.)

Bottom line: Many people are already facing the cold reality that they can't afford to retire and it's going to get much worse before it gets better.

Sorry!!! I didn't mean to be so "gloom and doom" on a Friday!
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Old 11-06-2009, 07:27 AM
 
Location: Sierra Vista, AZ
16,133 posts, read 20,859,935 times
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Quote:
Originally Posted by Samantha S View Post
Yes, originally pension plans were designed to benefit people who stayed with the company for their whole careers. Nowadays, that just isn't a reality.

It's more important to employers to attract and retain new talent than it is to reward longer service employees.

Who works at the same place for 30+ years anymore??? Union workers and pubic service employees still do, but not too many others. Who still has pension plans? Unions and public employers.

In most other lines of work, younger, shorter service employees benefit more (in the short term) from a company matching or profit sharing contribution to their 401(k). It's also a more predictable contribution for the employer and so it's more attractive to both parties.

However, at the end of a career, the actual retirement benefits are (usually) much smaller. So the person has less to retire on and must rely even more heavily on personal savings (and hardly anybody saves enough) or social security (which is also likely to see decreasing benefits in future years.)

Bottom line: Many people are already facing the cold reality that they can't afford to retire and it's going to get much worse before it gets better.

Sorry!!! I didn't mean to be so "gloom and doom" on a Friday!
The biggest problem I have is the FED and these artificially low interest rates. They may help the banks but they are killing my investments.
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Old 11-06-2009, 07:29 AM
 
Location: Westchester County, NY
144 posts, read 479,022 times
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When I started this thread, I was new to the forum and wasn't sure what to expect. I was inquiring if downsized employees close to social security age felt like they had no other choice but to take early social security and basically "give up" on the job market once their unemployment benefits ran out. Having no pension when I was laid off, I didn't realize all the games that are played by employers to avoid paying them. You have really given me an education on pensions!
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