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Pension? What is this mythical Pension of which you speak?
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One thing not mentioned in the article: many companies that offer db pensions are moving towards cash balance pensions. With those you can elect to take the cash balance as a lump sum ( which you can rollover to an IRA) or get a fixed amount with an annuity. So with the lump sum, you can ultimately control how the money is invested and in addition you don't have to worry about the plan going belly-up some time in the future.
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One thing not mentioned in the article: many companies that offer db pensions are moving towards cash balance pensions. With those you can elect to take the cash balance as a lump sum ( which you can rollover to an IRA) or get a fixed amount with an annuity. So with the lump sum, you can ultimately control how the money is invested and in addition you don't have to worry about the plan going belly-up some time in the future.


This is what my employer did, but gave employees the option of staying on the old plan, or going with the new one. With the new one, you get a cash balance rolled over into a 401K-like plan, plus you get 1/2 the defined beneift. Very few people opted for the cash rollover. I did, though. I like control of my $$$. And, I'll still get a small defined benefit amount.
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My company was just purchased in a leveraged buyout deal. The defined benefit fund is funded sufficiently. Are the new owners going to raid the fund? Can they just take that money? I don't think we are covered by federal insurance. Are there any options I can do now? Still have a ways to go til retirement, unless I win the lottery.
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One thing not mentioned in the article: many companies that offer db pensions are moving towards cash balance pensions. With those you can elect to take the cash balance as a lump sum ( which you can rollover to an IRA) or get a fixed amount with an annuity. So with the lump sum, you can ultimately control how the money is invested and in addition you don't have to worry about the plan going belly-up some time in the future.


The company I worked for did that for all younger employees and offered the option to older employees. To my knowledge, none of the older employees took it. That was smart. The cash amount offered was worth a whole lot less than the db pension.

The lesson here is that just because the company is offering a choice does not mean that the two are equal. It pays to run the numbers.

- tmeri
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