Has anyone under 55 and recently severed (within 2 years) been offered a lump sum buyout on their pension? I know of offers to employees severed 10+ years ago but I have not heard of any recently. I think changes in laws as well as changes in mortality tables made the buyouts less favorable for the employer but I would still expect State Farm to start offering these up to get the future payments off the books. The buyouts I heard of years ago were peanuts and most declined but depending on your personal situation , a buyout could be an option worth considering.
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nice ne--o, even more impressive having added nothing to the older discussion.
Post from TheLayoff.com
Well you had that pegged. No more pension for 2021 hires moving forward but a larger match. Change is swift and non stop, hoping I can hang on until retirement.
My guess is they’ll freeze it and start offering cash balance to new hires who will never be employed long enough to retire from the company anyway. Allstate did it a few years ago.
Load your 401k and stop thinking the pension is all that. It’s not when they run people off earlier than retirement age.
Make sure you have options if you’re an employee. This place is different than we’ve ever known. Offer me severance and I’ll jump at it.
When I was offered the buyout several years ago, the offer stated I could take the $xx,xxx, or stay in and receive $yyy.yy/month after age 55. There is no option for them to just make up a number when you're vested. It's just an opportunity for State Farm to change the nature of the liability on the books. It's not an opportunity for them to screw you over.
That being said, I calculated what I should be able to turn the money into per month, and it was very close to the pension figure. I took the buyout, but was careful to take it as a direct rollover into my IRA, rather than a check. Kept the money tax qualified and set aside for retirement since that's what it was for.
They’ll never fully kill the pension unless finances become dire. What they will do is stop putting new hires into the pension and create a cut off for people hired before a certain date to be vesting towards it. Then they will up their contribution and possibly their match.
@Ur0flq8-1ihe - you are correct - go take a look at the pension documents on-line and there is a provision for a buy-out if the present value of your pension is less than $5000. There are also present value calculators out on the interweb to let you calculate if the company is offering you a fair deal. My guess would be not, but look for yourself.
my understanding was $5k or less, you could get pension buyout
I went to the CPCU conferment in 2016 and it was announced that pension was staying. You have to remember that if they don’t offer a pension plan, they have to do much better on the 401(k) matching. Most companies will give you $800+ a month in 401(k) matching. SF gives $75 max match + $25 which is peanuts. To account for this deficiency we have pension plan.
If any buyout is offered, I think it needs to be voluntary. Or at least voluntary for people with less than say 12-15 years to retirement age 62.
Plus any buyout would have to equal what you would have received at retirement through SF pension. So essentially you should be able to take the buyout and invest in an annuity which would mirror the SF pension plan. This isn’t the 60s and the pension money is already outside of the company. Back then laws were passed to protect employees from their companies raiding the pension plan. So they can’t take that away now. And SF going forward would have to give you much higher 401(k) match.
So I just don’t see a benefit in State Farm wiping out pension across the board. If anything it would have to be optional or only for the newer employees. With that being said I have been shocked by everything that is happened in the last five years so not sure what will happen.
I work for previously Aon Hewitt its now black stone id--t Good Luck
Blackstone???? Clearly, you mean BlackRock.... you must be "in the know"
You clearly don”t understand the investment portfolio or how the pension is funded.
If the market takes a hit, which is looking to be substantial I would be concerned about Defined Benefit going forward.
I declined the payout a few years ago. I figured if they were offering it how could it benifit me.
Pension gone unless you are working for a different company. Blackstone doing a major overhaul for the farm
I have received an offer last year it was peanuts. Age 48 kept it but all thing pointing to a freeze. It’s not financially sound to carry such a high liability on the company into the future. He’s cutting everything else. Good luck you are going to need it.