Quote:
Originally Posted by John 070
I have a ways to go but I managed to get 2 pensions along the way as my last job, I started 6 mos. before they stopped. They just tried to buy me out with a lump sum, and imho the number was pathetic. Meaning, I could not take that lump sum, and buy an annuity of equal value. If you are getting ready to retire, I bet you have a pension (defined benefit). Before I could care less, but when I see that I can get a just under 2k/mo. (sure not worth that much but better than nothing) for the rest of my life, why not? I plan on making my < 2 yr. old son the survivor. I feel we've got a shot in beating the actuaries. I need to live 82.3 yrs. and my son 88.
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I've been offered pension lump sum buyouts before and in my experience while say "annuity of equal value" that's not what they really offer. Try using an online calculator like they have at immediateannuities.com and get a dollar figure on what it would cost to buy an annuity equal to your pension. I'll bet the company is offering significantly less - in my case the offer was a 30% haircut below the true value, so I declined.
I think the main reason to take a lump sum buyout is potential uncertainty about the company's future. If they go under the PBGC will generally still guarantee you some part of the pension payout, but it may also be a pretty big haircut. In my case I work for a huge corporation that I'm pretty sure will be around longer than I will, so I'm willing to take that risk.