My friends next door 5353neighbor lost it all, but it was his 401k, not his pension, as it was all invested in company stock. Not sure if that is what the op is talking about.
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@1jfu+1hF2B8uQ Since who amongst us knows if Ford will survive or not (neighbor did not his job at GM in 2008, but he did lose his pension),\
I could not locate any information that says "regular" GM Salaried workers lost their pensions due to the bankruptcy. I did see something about high up executives losing some of their retirement benefits (e.g. vehicles). A separate article mentioned Delphi workers losing a chunk of their pension, but I don't think it was directly related to the GM bankruptcy.
For Canadian cord employees…
About 50% of your lump sum goes into a Locked In Retirement Account (LIRA) with the financial institution of your choosing.
The remaining balance is taxed by Ford at 30%. The balances is sent to the band account t you specify.
Sin the following tax year you will be responsible for almost another 20% in taxes unless you have RRSP room you could utilize.
Actually, you can roll over a pension lump sum to an IRA of your own. It just has to be a qualified one, and had to be within 60 days, I believe - if not they will tax you as if you are taking a distribution.
@lsg+1hF2B8uQ is correct. I know because I have had to go through with this decision, as I was let go at the end of April actions earlier this year.
I was eligible to retire, so I did ( if you are involuntary let go, you can do this - take the separation package and also retire at the same time. In fact, the company encourages it.). Since who amongst us knows if Ford will survive or not ( neighbor did not his job at GM in 2008, but he did lose his pension), I took the lump sum option and rolled it right into my existing Ford SSIP….so no taxes until I access the funds.
Even better yet, the Ford SSIP still has an interest income fund, which acts like a money market fund. So, it will not make you much money, but you will not lose much if any either in the wild market gyrations going on at the moment….which is just what I want until I find another job.
In the process of selecting the lump sum payment option, you will have the choice to cash out or rollover to an IRA.
If you cash out, tax must apply.
If you rollover, you must do the direct rollover. If you do indirect rollover, you will be taxed.
You also need to separate the pre-tax and after-tax payment. After-tax portion of it is your contribution.