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Subject:  Re: Cash Balance vs Pension annuity Date:  7/9/2001  12:27 AM
Author:  MDGrabhorn Number:  116 of 294

>>I currently have the option of taking my 32 year pension as an annuity (with or without survivor benefits) or as a cash balance lump sum that I could combine with my 401k. <<

In order to answer your question, I need to make some assumptions.

1. You are age 53 with 32 years of service with your current employer.
2. Your employer has offered you the choice (opportunity as your employer may call it) of remaining under the old pension plan or going under the new cash balance pension plan.
3. You intend to retire in 2 years, or at some point after.

If these assumptions are correct, read on.

The cash balance amount you are referring to is most likely your accrued benefit under the current pension plan discounted to a present value, in order to determine your minimum benefit under the new plan. This cash balance is NOT an amount that will suddenly be added to your 401(k) account balance.

Cash balance plans are typically not beneficial to employees over age 40 who have more than 10 years of service. The