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|Subject: Re: Pension Protection Act of 2006||Date: 12/27/2007 1:09 PM|
|Author: CycleGirl||Number: 12161 of 19599|
Seeing your post, I went out and read a bunch of articles. This one http://benefitslink.com/articles/washbull071217a.html was pretty good.
scroll to PPA Impact on Lump-Sum Values
Between 2008 and 2012, the lump-sum distribution will move to corporate bond rates rather than treasury bond rates. Since the assumed interest rate will be higher, the company paying the pension will offer a lower lum-sum payment option for the same monthly pension.
I took a lump-sum from my company six months ago along with an early retirement package. I am even happier now, that I took the lump-sum and rolled it into an IRA. Had I waited until 2008 or later to take the lump-sum, I would have lost money due to the rule change. Of course, hind-sight is 20/20 and since interest rates have gone down since then, the best course might have been to have waited to take the lump-sum later in the year when a lower interest rate would have been in effect. OTOH, even the pros can't predict the direction of interest rates, how can I?
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