Quote:
Originally Posted by vachss
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.
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I thought that one factor about PBGC was that as long as your monthly is < something like $5000, which I am curious if anybody really gets such a large amount, you are good to go. My neighbor gets over 3k, but again, they retired 10+ yrs. ago. So my lay understanding is that if your pension is not over $5k/mo. (if it's single, not if you do a survivor like I want to), you should not take a lump sum....
But if it is, your plan is underfunded, and your co. may go under, then it is likely good to take it....
But if you're still working and the plan fails, PBGC does not help you....