When a company offers a lump sum payout for the pension, the amount is typically based on 10 year Treasuries so depending on what the rate is when the window is offered, it can vary wildly. It's not the company screwing you, it's basically the rules determining how these things are calculated. A private insurance company can use a different rate in their calculations so their number may be more or less than what the company is offering.
A lot of companies are offering lump sums now; many have frozen their pensions and even the ones that haven't are looking to lower their risk. Nobody wants these somewhat variable liabilities hanging out there for decades to come. Plus the PBGC raised their per person premiums a lot this year so that caused quite a few companies to offer lump sums. The savings in just premiums can be tens of millions of dollars over time since many of these pensions have tens of thousands of people in them.
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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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