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Author: psmart Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75335  
Subject: Pension Plan Choices Date: 2/23/2001 2:03 PM
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I have a defined benefit pension plan through my state employment. In the past, I was a participant of another system's defined benefit plan, but drew out the money when that job ended.
I can now repurchase that credit, and I'm trying to figure out if that is the best choice.
Pros:
Would add 6 years to my service credit
This would give me well over the 10 years needed to vest & become eligible for disability payments or survival benefits.
I would be able to retire 6 years sooner.

Cons:
Money! It would cost me $11,000 to repurchase this credit.

How can I figure out which is the better option - doing the repurchase or not??

Thanks for any input on this-
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Author: bhirs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28064 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 2:21 PM
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Ask your HR manager to have the plan actuary illustrate the present value of the benefit that you are purchasing.

This should help you get to the next level of decision making with regard to your election.

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28065 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 2:22 PM
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Whenever you're considering a financial choice, you have to try a few what-if scenarios to compare that financial choice to another choice.

A pension is a guaranteed income for life. What is your $11,000 currently doing? What is the range of values it could take on if you left it where it was?

Do you need disability payments? If so, how much would it cost to replace the disability benefit of the pension? Would you be able to save money by cancelling other disability insurance?

Are you planning to retire sooner? If so, what would the difference be in your benefit if you didn't repurchase?

etc. Often a spreadsheet (e.g. Excel) is a good idea for these sorts of things.

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Author: libc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28068 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 3:00 PM
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A pension is a guaranteed income for life. What is your $11,000 currently doing? What is the range of values it could take on if you left it where it was?

[A defined benefit (this is what Social Security is currently) pension is a guarantee for life, providing the employer stays in business and has adequately funded the plan.]

[A defined contribution (this what President Bush wants to change part of Social Security to) is NOT a guarantee for life or for any period of time. The amount of money that is accumulated will last for a specific time period...solely dependent upon how it is managed.]

LIBC
William D. Brownlie, CLU, ChFC, CIP, LIA

This email advice is designed to provide accurate information in regard to the subject matter covered. It is performed with the understanding that William D. Brownlie is not engaged in rendering legal, accounting or other professional service including actively selling life, disability, long term health care insurance, and investment advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.


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Author: pmcw007 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28069 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 6:05 PM
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libc, Would you please direct me to any link that substantiates the claim you made that the privatized portion of SS will alter it's structure, even fractionally, to become a defined contribution plan: "A defined contribution (this what President Bush wants to change part of Social Security to) is NOT a guarantee for life or for any period of time. The amount of money that is accumulated will last for a specific time period...solely dependent upon how it is managed."

Even if it would, my understanding is that enrollment will be voluntary. Is this your understanding? I also am of the understanding that it will have zero affect on those currently or soon to retire. Is this also the case?

Isn't it true that many life insurance wrapped programs can be set up to be either defined contribution or defined benefit? During the last decade, which type has sold more (as measured in dollars) and which carries a higher sales commission?

Thanks for your time and consideration. Regards, pmcw


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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28071 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 6:35 PM
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pmcw007: "Isn't it true that many life insurance wrapped programs can be set up to be either defined contribution or defined benefit? During the last decade, which type has sold more (as measured in dollars) and which carries a higher sales commission?"

A large reason for the change from defined benefit plans (traditional pension) and the defined contribution plans (401-k, etc.) were changes in GAAP requirements WRT to compnay reporting. Dropping the defined benefit plan and shiftng to the defined contribution plan shifted the entire investment risk from the employer to the employee, also made the benefit more portable, and avoided some GAAP reporting issues WRT penisons issues (a good accountant could expand on this last point in more detail).

Regards, JAFO



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Author: pmcw007 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28072 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 6:39 PM
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JAFO, I appreciate your response, but I don't see where it answers the question. I understand benefit plans pretty well since I'm a retired CEO.

<<pmcw007: "Isn't it true that many life insurance wrapped programs can be set up to be either defined contribution or defined benefit? During the last decade, which type has sold more (as measured in dollars) and which carries a higher sales commission?">>

JAFO Replied: "A large reason for the change from defined benefit plans (traditional pension) and the defined contribution plans (401-k, etc.) were changes in GAAP requirements WRT to compnay reporting. Dropping the defined benefit plan and shiftng to the defined contribution plan shifted the entire investment risk from the employer to the employee, also made the benefit more portable, and avoided some GAAP reporting issues WRT penisons issues (a good accountant could expand on this last point in more detail)."

Regards,pmcw

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Author: libc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28074 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 7:13 PM
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libc, Would you please direct me to any link that substantiates the claim you made that the privatized portion of SS will alter it's structure, even fractionally, to become a defined contribution plan:

[I do not know the details of President Bush's Social Security recommendations. However, as I see it two economic realities could take place: (1) Social Security will consist of part defined benefit and part defined contribution for certain people (folks like me at age 68 will not be in the mix) or (2) Funding for defined benefit and defined contribution in the accumulation process (working years) with a merge of both to produce hopefully a higher defined bbenefit amount.]

"A defined contribution (this what President Bush wants to change part of Social Security to) is NOT a guarantee for life or for any period of time. The amount of money that is accumulated will last for a specific time period...solely dependent upon how it is managed."

[The above is a correct statement for a pure defined contribution plan...at this point I do not know the specifics of what the President has in mind. It may be either #1 or #2 as stated previously or some other blend.]

Even if it would, my understanding is that enrollment will be voluntary. Is this your understanding?

[I do not know the answer.]

I also am of the understanding that it will have zero affect on those currently or soon to retire. Is this also the case?

[Yes, it is.]

Isn't it true that many life insurance wrapped programs can be set up to be either defined contribution or defined benefit?

[When all qualified retirement plans were exempt from the Federal Estate Tax it made a lot of sense when allowed to purchase life insurance within the retirement plan. When the Federal Estate Tax exemption was taken away in 1984, it did not make sense in my view. The face amount of life insurance on a participant within a defined benefit plan cannot exceed 100 times the monthly defined pension benefit. The life insurance premium within a defined contribution pension plan cannot exceed the aggregate contribution by more than 49 percent.]

During the last decade, which type has sold more (as measured in dollars) and which carries a higher sales commission?

[Within the past 10 years, I would have to say defined contribution. Although due to recent changes commentators tell me that a defined benefit plan is making a come back. Should Congress restore the Federal Estate Tax exemption to qualified retirement plans, the purchase of life insurance within the plan when allowed...again will make sense.]

[Regarding commissions the answer depends upon (1) the amount of premium (not the face amount) and (2) the commission percentage paid by the insurance company.]

Thanks for your time and consideration. Regards, pmcw

Thank you for the questions.

LIBC
William D. Brownlie, CLU, ChFC, CIP, LIA

This email advice is designed to provide accurate information in regard to the subject matter covered. It is performed with the understanding that William D. Brownlie is not engaged in rendering legal, accounting or other professional service including actively selling life, disability, long term health care insurance, and investment advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

P.S. I know of no website that shares my views



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Author: pmcw007 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28075 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 7:26 PM
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Thanks for the response libc. Evidently, I did a incomplete job in phrasing one question. I asked:

<<Isn't it true that many life insurance wrapped programs can be set up to be either defined contribution or defined benefit?>>

You responded: "[When all qualified retirement plans were exempt from the Federal Estate Tax it made a lot of sense when allowed to purchase life insurance within the retirement plan. When the Federal Estate Tax exemption was taken away in 1984, it did not make sense in my view. The face amount of life insurance on a participant within a defined benefit plan cannot exceed 100 times the monthly defined pension benefit. The life insurance premium within a defined contribution pension plan cannot exceed the aggregate contribution by more than 49 percent.]:

My reference was to such situations purchased outside a pension or retirement plan of any sort. Under any circumstance I can imagine, owning life inside a pension or retirement plan would be about as logical as holding municipal bonds in the same. More or less, what I was getting at was annuities or other non-retirement stuff wrapped in a life policy. You could even stretch it to include variable versus whole life. Now that you mention estates, I guess it could include a Crummy or other trust as well, but that wasn't the central question. Can you take another swipe please? And, on the question of commissions, can you provide an answer if all else is equal, which pays a greater commission defined benefit or defined contribution?

Thanks again. Regards, pmcw

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Author: libc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28076 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 9:34 PM
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My reference was to such situations purchased outside a pension or retirement plan of any sort. Under any circumstance I can imagine, owning life inside a pension or retirement plan would be about as logical as holding municipal bonds in the same.

[If the Federal Estate Tax were restored life insurance when allowed within a qualified retirement would be have these positive advantages:

1. Premium tax deductible, except for the pure insurance "at risk" (difference between the face amount and the cash value and/or separate investment account) charge

2. The insurance "at risk" amount is not subject to Federal Income Tax when received by the designated beneficiary

3. The entire face amount is not subject to the Federal Estate Tax

4. The cost for life insurance within a defined benefit pension plan is incorporated into the entire cost to fund the benefit. The cost for a defined contribution plan can be brought to a stop through the utilization of the premium offset concept.]

More or less, what I was getting at was annuities or other non-retirement stuff wrapped in a life policy.

[I do not believe in annuities for purposes of accumulating money for the following reasons: (1) the value at death does not receive a stepped-up-in-basis, (2) the internal costs are greater than for a no-load mutual fund, and (3) penalties involved getting to the money prior to age 59 1/2.]

[Regarding life insurance "in or out" of a qualified retirement plan...it should only be purchased if one has a need for life insurance. A "rose by any other name is still a rose"...life insurance is life insurance.]

You could even stretch it to include variable versus whole life.

[I am a whole life advocate when non-term life insurance is to be purchased. Variable and variable-universal life ledger statements most likely use the "constant average interest rate" when illustrating values...this is not reality.]

Now that you mention estates, I guess it could include a Crummy or other trust as well, but that wasn't the central question. Can you take another swipe please?

[Swipe at what?]

And, on the question of commissions, can you provide an answer if all else is equal, which pays a greater commission defined benefit or defined contribution?

[Same answer depends upon (1) premium, and (2) commission percentage paid by the specific life insurance company.

LIBC
William D. Brownlie, CLU, ChFC, CIP, LIA

This email advice is designed to provide accurate information in regard to the subject matter covered. It is performed with the understanding that William D. Brownlie is not engaged in rendering legal, accounting or other professional service including actively selling life, disability, long term health care insurance, and investment advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.



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Author: W401K Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28078 of 75335
Subject: Re: Pension Plan Choices Date: 2/23/2001 11:00 PM
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Hi guys,
Just figured I'd give my 2 cents worth on the topics at hand.
Over the past 10 years Defined Contribution Plans have been much more popular than Defined Benefit Plans. As mentioned in an earlier post, due to the repeal of 415(e) limits the Defined benefit Plans are making a small comeback amongst small business owners.

Commissions paid are pretty much the sam for DB and DC plans. It all depends on the size of the case. This will dictate which share class is purchased and therefore which comission schedule is followed.
Plans sold through Insurance Companies tend to have higher internal fees because they are often packaged as a group annuity and there fore pay higher commissions than a plan sold through a mutual fund firm.

Bill

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Author: pmcw007 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28086 of 75335
Subject: Re: Pension Plan Choices Date: 2/24/2001 1:40 PM
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libc, I'm, a little confused. Possibly it's just my lack of familiarity with using life insurance in the manners you referenced.

I had asked:
<<My reference was to such situations purchased outside a pension or retirement plan of any sort. Under any circumstance I can imagine, owning life inside a pension or retirement plan would be about as logical as holding municipal bonds in the same.>>

And, you responded:

"If the Federal Estate Tax were restored life insurance when allowed within a qualified retirement would be have these positive advantages:

I'm not sure what you mean about estate tax being restored. I know the government is talking about abolishing estate tax, but I'm under the impression they have taxed estates for quite some time. Please expand on what you meant by this statement. Also, if you wouldn't mind, please comment what the repeal of estate taxes might do to the insurance business. I assume the insurance business sells some pretty lucrative life policies to fund insurance trusts (Crummy and other forms) that are designed to protect estate assets from Estate Tax. Now, back to more questions about your comments. The points you made follow with my new questions inserted.

"1. Premium tax deductible, except for the pure insurance "at risk" (difference between the face amount and the cash value and/or separate investment account) charge."

My understanding is that contributions to current 401(k) and similar ERISA plans are already tax deductible as are contributions to certain IRA's. Please elaborate as to what benefit your targeting with your comment about the premium being tax deductible. Maybe an example would help.

"2. The insurance "at risk" amount is not subject to Federal Income Tax when received by the designated beneficiary.

3. The entire face amount is not subject to the Federal Estate Tax."


My understanding is that proceeds from a life insurance policy are never taxable (estate or income) to the person paying for the policy. I've always been lead to believe this is the central reason they are effective when used as an estate preservation tool. Again, please help me better understand what you are saying and, if you don't mind, please include an example.

"4. The cost for life insurance within a defined benefit pension plan is incorporated into the entire cost to fund the benefit. The cost for a defined contribution plan can be brought to a stop through the utilization of the premium offset concept."

This seems to fall under the category of "there's no free lunch" if my understanding of what you are referencing is correct. I think you are talking about how a policy holder can elect to use the accumulated cash value of a life policy to pay premiums and thereby simply let the policy support itself. I really don't see where this is much different from having an investment outside your insurance policy pay premiums with its profits. The profits used to pay the premiums belong to the policy holder and are accumulating tax deferred (true for policies held outside or inside pension plans) within the policy. If this is true, a policy holder is actually using earnings that could continue to accumulate tax deferred to pay for the policy. Maybe I'm totally missing your point. Once again, a bit more detail and an example might do the trick.

I guess if you boil this all down, beyond seeking some clarification on the aforementioned details, I would like to better understand exactly when it makes sense for someone to purchase whole (cash value) life insurance versus term life insurance.

Again, thank you for your time and consideration. I'm sure many of the retirees on this board can benefit from your presentation of this material. Regards, pmcw


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Author: psmart Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28089 of 75335
Subject: Re: Pension Plan Choices Date: 2/24/2001 2:51 PM
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Whenever you're considering a financial choice, you have to try a few what-if scenarios to compare that financial choice to another choice.

Ok, been doing that but am I looking at this stuff correctly?

A pension is a guaranteed income for life. What is your $11,000 currently doing? What is the range of values it could take on if you left it where it was?

That's the good thing - the lifetime payments.
It would be 16 years before retirement if I don't repurchase. The $11,000 at 8% would be $20,120 then.
In my estimates, I can draw $1700 per month in retirement - that's $20,400 annually, so the $11,000 is worth about a year's worth of pension payments.
(this is for figuring only - if I don't repurchase it's highly unlikely the $11,000 will be investing fully for that time so I would likely wind up *without* the $20,120 anyway!)
If I repurchase, I can start drawing the $1700 5 years earlier than if I don't repurchase.

Do you need disability payments? If so, how much would it cost to replace the disability benefit of the pension? Would you be able to save money by cancelling other disability insurance?

Hopefully won't need disability payments - but one never knows, and it's just another benefit. Won't purchase disability separately.

Are you planning to retire sooner? If so, what would the difference be in your benefit if you didn't repurchase?

Would love to retire 5 years earlier! This would also allow me to retire with 30 years (as opposed to 25)if I so desired to work on for the 16 years.

Am I on the right track with my figures?
If so, it's looking like repurchase is a good way to go.
Thanks again for the input-



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Author: arrete Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28093 of 75335
Subject: Re: Pension Plan Choices Date: 2/24/2001 4:30 PM
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psmart says :I would be able to retire 6 years sooner.

Cons:
Money! It would cost me $11,000 to repurchase this credit.


Hi - visiting from the Retire Early board. As you might expect, I would gladly pay $11000 to get back 6 years of work-free life - all other things being equal, of course. That's less than 2K per free year!

arrete

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Author: psmart Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28107 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 10:56 AM
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Hi - visiting from the Retire Early board. As you might expect, I would gladly pay $11000 to get back 6 years of work-free life - all other things being equal, of course. That's less than 2K per free year!

You're right! I hadn't looked at it that way.
Thanks-




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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28108 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 11:24 AM
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Would add 6 years to my service credit
This would give me well over the 10 years needed to vest & become eligible for disability payments or survival benefits. I would be able to retire 6 years sooner.


This is all well & good; potentially even at a cost of $11,000. However, to evaluate this option, you need to give us a bunch of details:

1. Your current age?
2. What mnthly benefit would you receive and at what age would it commence?
3. Any special features attached to (2) above?
4. Anything unusual about your health/life expectancy?

With these data we can do a future value computation to determine:

A. Spend the $11k to buy the years to buy the benefit in (2) above.

B. Invest the $11k for N years (say to age 65) which will create a lump sum of $XXX which can then be converted into an immediate annuity of $ZZZ per month.

TheBadger




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Author: psmart Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28111 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 11:47 AM
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This is all well & good; potentially even at a cost of $11,000. However, to evaluate this option, you need to give us a bunch of details:

1. Your current age?
2. What mnthly benefit would you receive and at what age would it commence?
3. Any special features attached to (2) above?
4. Anything unusual about your health/life expectancy?

With these data we can do a future value computation to determine:

A. Spend the $11k to buy the years to buy the benefit in (2) above.

B. Invest the $11k for N years (say to age 65) which will create a lump sum of $XXX which can then be converted into an immediate annuity of $ZZZ per month.


Currently 43 YO, with repurchase would be able to
retire at 25 years service & 55 years of age. Current conservative estimates (since I don't know my final 3 years of compensation yet for accurate figures)is $1700 per month for life after retirement. I would also have an option of working until I had 30 years of service for additional monthly benefits - currently I will have to work until I'm 60 for the 25 years.

As I said in another message, most likely the $11,000 would not be invested since I'm planning on using money we'd saved for another property purchase. If I don't put this money into this retirement, we will most likely be spending it in the future for some property to be used down the road in retirement. If I use the money, and then we later find property to purchase we'll then worry about a loan for that.

Thanks for all input - it all helps me to look at it in different ways.



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Author: psmart Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28112 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 11:53 AM
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Forgot in last message - no know life/health problems. Just would like to retire sooner if possible.

BTW - the survivor benefits I'm referring to are at the 10 year vesting point. After 10 years in the system, if you die your beneficiary is paid 50% of current salary for life. Also, after 10 years if you become disabled, you can apply for disability under the system.
These are just added benefits I would have immediately since this purchase would give me about 14 years in the system.

Thanks again-

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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28113 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 12:23 PM
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We need one more piece of info: What would you get as a pension @ age 55 if you do not repurchase the years for $11K?

TheBadger


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Author: psmart Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28116 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 1:04 PM
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We need one more piece of info: What would you get as a pension @ age 55 if you do not repurchase the years for $11K?

Nothing at age 55 - wouldn't have my 25 years in until I was 60, so retirement & the $1700 per month wouldn't begin until age 60.

Thanks-



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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28119 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 2:29 PM
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I see no way then to evaluate your alternatives mathematically. However, $11k seems awefully cheap to buy 5 years.

TheBadger


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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28121 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 3:15 PM
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I apologize; there is a way to look at this financially. For $11k now you get $1700 / month @ age 55 versus not paying the $11k and being required to wait to age 60 to collect the same $1700 prer month.

Thus, the present value of $1700 / month for 5 years is @pv(1700*12,.08,5) = $81,400. $11,000 invested @ 8% for 12 years is $27,700; therefore buying the years is clearly worth it putting aside the fact that you will be required to work 5 year less.

TheBadger




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Author: psmart Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28122 of 75335
Subject: Re: Pension Plan Choices Date: 2/25/2001 3:35 PM
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Thus, the present value of $1700 / month for 5 years is @pv(1700*12,.08,5) = $81,400. $11,000 invested @ 8% for 12 years is $27,700; therefore buying the years is clearly worth it putting aside the fact that you will be required to work 5 year less.

Thank you! I'm not nearly mathematically inclined to start figuring that out - but figured someone here would be able to. That example clearly shows an advantage in the repurchase.
Thank you for your assistance-



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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28134 of 75335
Subject: Re: Pension Plan Choices Date: 2/26/2001 12:10 PM
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pmcw007: "JAFO, I appreciate your response, but I don't see where it answers the question. I understand benefit plans pretty well since I'm a retired CEO."

Thanks, and it does not do so directly. Did not mean to offend you, but I have not read enough of your posts to know your online persona.

OTOH, the inference I made (and the thought I believe that you intended to imply, but only you would know), was that you anticipated:

1. A yes answer to the first question [can be set up either way];
2. Defined Contribution to the second question; and
3. Again, Defined Contribution to the last question.

<<pmcw007: "Isn't it true that many life insurance wrapped programs can be set up to be either defined contribution or defined benefit? During the last decade, which type has sold more (as measured in dollars) and which carries a higher sales commission?">>

JAFO Replied: "A large reason for the change from defined benefit plans (traditional pension) and the defined contribution plans (401-k, etc.) were changes in GAAP requirements WRT to compnay reporting. Dropping the defined benefit plan and shiftng to the defined contribution plan shifted the entire investment risk from the employer to the employee, also made the benefit more portable, and avoided some GAAP reporting issues WRT penisons issues (a good accountant could expand on this last point in more detail)."

I was suggesting that even if you received the answers (that I believe) that you anticipated, there were other reasons that might explain the change.

Hope this sheds some light and sorry if my inference was incorrect.

Regards, JAFO


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