Curious about pensions

[Dave Grubb]

I have (or more correctly had) two pensions. One from Knoll International and the other from Westinghouse (now CBS) for the period when Knoll was a division of Westinghouse.

Both pensions were set up to pay the full amount to my wife if I die first. I have been receiving those checks for ten years.

A few months ago I received a letter from the Knoll pension plan offering an option of a one time buyout which, if elected, would end any further payments.

I was very much surprised by the amount of the offer and after discussing it with my financial advisor filed to take the offer---which is now complete. My financial advisor did tell me that this is not an isolated case. Companies do not like pension liabilities on their balance sheet since they are "indeterminate".

I'm curious if anyone else had had such an offer.

I also believe, that the now almost unheard of policy of company provided pensions plans, is not a good thing for anyone (other than the companies). I know far too many people who are unable, ill-equipped, or unwilling to take responsible actions to guarantee their own financial solvency. Company based pension plans were (to the best of my knowledge) raid proof.

I'm not downing anyone, I do know people, that through no fault of their own, depleted their 401k accounts to meet unexpected financial demands. They end up trying to survive on SS alone---and that isn't reality for most of us.

I'm not sure there is a universal solution to the entire issue of pensions---but I'm reasonably certain we haven't found one as yet.

But--back to the original issue--has anyone else seen such a buyout?

[Truckman]

They end up trying to survive on SS alone---and that isn't reality for most of us.

It can be done, but not easily...It depends mostly on the debt load you have when you decide to withdraw from the labor pool...You also must self-enforce a monthly spending limit, and prepare for the occasional spending bump from unscheduled medical, or home and vehicle repairs...Being rigid about the spending is the toughest part, but establishing a budget early, and not having anyone else as a participant in it are helpful...Also never expect significant income from side ventures such as video production, blog writing, book publishing or speculation in precious metals (don't ask how I know)...

But--back to the original issue--has anyone else seen such a buyout?

The only employer I ever stayed with long enough to accumulate a pension fund was Goodyear Tire & Rubber, which paid off in common stock shares when I exited the company...I followed their value for a few years, and eventually cashed out...It was an insignificant amount at the time......Ben

[Dave Grubb]

Now that you mentioned your Goodyear plan, I recall a very close friend of mine who worked for Goodrich. He took a cash buyout when the plant closed---that was many years ago.

As for your ability to live on SS--that is great, but I am sure that came about as a result of excellent fiscal discipline honed over many years prior to receiving SS. Not everyone has that discipline or ability.

[Truckman]

I am sure that came about as a result of excellent fiscal discipline honed over many years prior to receiving SS. Not everyone has that discipline or ability.

If that can be translated into being accustomed to living as a poor boy and a cheapskate, then your assessment is correct, sir......Ben

[Independent Voter]

I have a company paid plan [ not pension, it is a Company paid savings program ] from KOCH Ind. Monthly stipend, not much but, it all adds up.

They offered , when I left the Company to give a one time payment or accept the monthly payments for my or the brides lifetime.


Accepting the monthly payout has proved the best option since I have already surpassed the lump sum payment. P.S. I intend to make them pay for many years to come.

[CactusCurt]

Pensions had gone the way of the dinosaur by the time I entered the workforce. Govt was about the only place you could get one. The 401(k) killed the pension.