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|Subject: Re: Another reason to save for retirement||Date: 10/27/2013 12:14 PM|
|Author: JLC||Number: 73653 of 74465|
Most private pensions are insured by the PBGC against employer default...
But that doesn't guarantee they'll receive benefits promised. IIRC, several years ago some airline went bankrupt, PBGC covered the pensions but the pilots and stewards were taking about a 30-40% cut in payout.
So people need to save more on their own still.
This is why it is incumbent on every retiring employee to understand the company pension's benefit formula and how their accrued benefit is calculated.
For example, my mother. State nursing school teacher for 27 years. IIRC, pension was around $2500/month or estimated by the tables she got from HR department. Subject to federal taxes but not state. Works one more semester, but is told what her benefits will be. By the time she starts collecting, fed tax law has changed. So her expected net is different on top of her expected gross is a few dollars off. Fast forward 10 years. Fed laws different again and gross has vassalated a few dollars. Without her wasting half her retirement time on hold, its kind of impossible for her to check.
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