Here is a new rumor going around Torrance today. HoneyHell is going to offer or force those of us with pensions to a "Buy Out" Any substance???
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Question I have is ... Which plan is affected? Both or just one? I stayed with Allied-Signal pension and certainly did not agree to a buyout.
This is what people should be talking about on this post. The 401k has nothing to do with the pension buy out. The pension buy out is when Honeywell doesn't want to make monthly payments to retiree's. So they offer you a lump sum payout based on the formula that they have created based on your salary, years of service and multiply that by x amount of years. Betting that you will live longer than what they've predicted. This will save the company a lot of money down the road in retirement payments. United Technology just implemented this plan and estimate to save 1.6 billion dollars on future payments to retired employees. That's how this rumor was started. If one company does it, then it becomes industry standard. Heard Honeywell will give the option to eligible employees to retire now for monthly payments for life. Or take the lump sum when you retire in the future. Good luck...
Hi,
I'm the original poster regarding the "rule of 55" question. Thanks for the input I've received. I kind of thought there might be confusion regarding the difference between the company sponsored 401K plan and its pension plan (it seems like there always is). I was considering cashing it out, but things are looking pretty good with my new employer so I think I'll just leave it there for now and not take the big tax hit that has been mentioned by other posters. I was going to use it to pay of my mortgage, but as long as the money is still there that's always an option in a few years as retirement comes closer. Like I said I'm 56 and gotta start thinking if I want to retire with a mortgage.
There seems to be confusion on this thread between the pension plan and the 401(k) plan. They are not the same thing.
The age 55 rule applies to 401k plans, ie you are not hit with a penalty for distributions from the Honeywell 401k plan if you separate from Honeywell during or after the year you turn 55. Whether the rule of 55 applies to pensions is something else, I rather doubt it.
Are you sure you want to cash out? Even if you don't get hit with a penalty, taking a distribution all in one year can put you into a higher tax bracket.
https://www.nolo.com/legal-encyclopedia/getting-retirement-money-early-without-30168.html
Suggest you do a bit of googling on this.
Sorry I fat fingered the age. It's 59.5 for no penalty
Withdrawal unless rolling over to another 401 or investment firm, your hit with a penalty unless 69.5 years of age. That's not a Hon thing . If you simply take it out, you get hit but if you transfer out, you don't
That's curious. When I resigned from HW for a better position with another company a little over a month ago, I called up One Stop and asked them the exact same question. There reply was (with no uncertainty what so ever) that any withdrawel/cashout from my pension would be subject to an additional 10% early withdrawel penalty even though I'm 56.
Roll Tide
55 rule does apply. This was confirmed by many in the last RIF
Does anyone know if the rule of 55 applies to HW pension?
The rule of 55 states that if you leave (resign) from an employer that you have a retirement account through, and you are 55 or will turn 55 in the calendar year, you are exempt from the 10% early withdrawal penalty if you cash out.
50 % of lump sum withholding tax+ 10% penalty, be aware. Talk to your financial advisor first
Pension? What is that? Us young cheap millennials that were hired on a couple of years ago don't know what that word means..., (i.e. what the hell is keeping newer employees from staying at honeywell)
I heard that for the US and Mexico Sites they are making a list of people that are Band 3/4 and have been working for more than 10 years and they are going to make them post and interview for their current position and hire them but at a lower salary. Anybody else has heard if it might be true?
Boeing has offered pension buyouts......they are just looking at ways to cut costs. Get out of that liability. You can roll it over..but you DON'T want to take the cash..unless you are 59 1/2 you'll get taxed on that whole amount in that year AND 10% penalty. If you are worried about company going under take your money and roll it over.
Where has this rumor came from? Heard it a long time ago,but didn't know if it waste a fact. Can they really make you do that?
I've heard the same rumor but nothing solid yet. Maybe that is Dave's Christmas present to all of us?
If you get RIF'd it is possible they could do this if you elected to take the new pension plan B.