What happens to your pension?

[cptacek]

I work at a company that still gives us a pension. What happens if I quit and get another job? Do I lose that pension? Or do they keep track of me until I hit retirement age and then send me checks? I would hope I don't lose it, but I can't imagine they keeping track of all the people who have ever worked for them for the last 100 years!

[humandraydel]

Depends if you have "vested" in the pension plan. Typically this takes 5 years of service. Of course, most pension plans don't pay much at all until you've got 15-20 years of service. But the bottom line is yes they will keep track of you and pay whatever you are due if you are vested.

[Scanner]

Get this - my wife's pension sucks.

She can't collect on it until age 65, no matter how many years of service she has had.

I thought if you got 20 or 25 years in, you could retire.

[safari]

Get this - my wife's pension sucks.

She can't collect on it until age 65, no matter how many years of service she has had.

I thought if you got 20 or 25 years in, you could retire.

Pension is similar to Social Security; you have wait until you turn 65 to start collecting it. At my company I can retire at as early as 55, but my pension will be reduced. I just did some calculations using my company's online pension estimator tool. If I quit my job today at age 32 after having worked over 8 years at this company, when I turn 65, I will be receiving $832 a month. If I continue working at this company until I turn 65 (assuming 3% raises in my salary every year), then my pension would be $9,948 a month.

[Daylily]

I'm not quite sure that the company will keep track of you if you quit. YOU will want to keep track of them keeping track of you. Make sure that you know the HR/benefits phone number and update them if you have an address change.

My previous company switched to a defined contribution/cash balance plan. When I left, I was able to take that money and roll it into an IRA.

[cptacek]

We have a 401k at work as well, but we do have a pension. They probably keep it around because a lot of the people who work there are in a union.

I will get almost $400 a month (!) if I quit now. Wow, that'll fill up one tank of gas when I retire.

Good point about keeping them up to date on my address. That was one of the things I was thinking about in the original post.

[Scanner]

Hell, I say take the money and run - take the $832/month.

Take it before the Ponzi scheme collapses or you're dead and buried.

[safari]

Hell, I say take the money and run - take the $832/month.

Take it before the Ponzi scheme collapses or you're dead and buried.

I can't take $832 a month now; I'll only get that when I turn 65, which will be nothing in 33 years from now.

[Scanner]

You see, this is what I don't like about pensions and I can't figure out why any would go broke.

Sure, all of the people at this forum give me their money, I'll invest it, and if you live long enough, I'll send a little of it back month by month.

Moo, waa, haa, haa, haa, haa, haaaaaaa

[humandraydel]

You see, this is what I don't like about pensions and I can't figure out why any would go broke.

Sure, all of the people at this forum give me their money, I'll invest it, and if you live long enough, I'll send a little of it back month by month.

Moo, waa, haa, haa, haa, haa, haaaaaaa

No offense, but I don't think you understand pensions. Most pensions (from corporations, not government pensions) do not require the individual to contribute a single cent. It is a benefit. The reason they are considered so good is because it is the corporation, not the individual, that is taking the risk. If the corporation's pension fund investments do well, they may even be able to skim some off the top. If the investments don't do so well, it will dig into profits - sometimes it will dig deeply - GM is a perfect example.

As for why they go "broke".....really it's due to lax government regulations. During the boom years some companies don't put much into their pension fund because the investments have grown so much that, according to government regulations, they don't need to. Any money they put into the pension fund comes directly from profits, so to please investors they often won't put any more than absolutely necessary.

[Daylily]

My former company started offering a defined contribution pension. We were allowed to switch to that if we wanted. They converted the defined benefit portion into a cash value and then made subsequent yearly contributions. When I left the company, I was able to take the pension cash value and roll it into an IRA.

Is your pension a traditional one or cash value?

[Scanner]

No offense, but I don't think you understand pensions

Oh, I understand them alright. . .more than you think.

[humandraydel]

Oh, I understand them alright. . .more than you think.

Ok! Well, I certainly understand your being skeptical. Personally I don't believe anyone should rely on a pension and/or social security.