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I am being laid off- any pension experts out there?

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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Tue Jan-27-09 10:07 PM
Original message
I am being laid off- any pension experts out there?
I have 18 years on the job, was told I would be gone on May 1st. We have a pension plan which I am vested in. I will (or am supposed to) collect on the pension at a reduced rate when I hit 65. Is there any way to sign away the rights to those payments in the future for a lump sum now? I haven't talked to H.R. yet but I would like a reduced amount now in lieu of any future payments.

I would like that money for a business I am hoping to start. Any "magic words" I can use to get the "discounted" pension funds early? I am willing to sign away any future payments for a lump sum.
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BlooInBloo Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 10:09 PM
Response to Original message
1. Wow - that's ballsy.
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Tue Jan-27-09 10:33 PM
Response to Reply #1
6. Whats "ballsy"?
I don't think the money will be there in 20 years. If it is it won't do me as much good as it would do me now.
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BlooInBloo Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 10:48 PM
Response to Reply #6
8. Yup - that's the only conceivable explanation I could think of, given how low interest rates are...
Utter despair.
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Tue Jan-27-09 10:59 PM
Response to Reply #8
9. I don't like the idea of leaving money with them to "manage".
If I can get it now I will be better off.
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BlooInBloo Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 11:04 PM
Response to Reply #9
11. Yup - that's what all money-in-matress folks say. It might even be true, for like 2 of them...
But whatever - it's your money. Good luck!
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Tue Jan-27-09 11:17 PM
Response to Reply #11
15. I have no dependents.
I don't know if I will live long enough to collect any of the pension. I have no bills & my home is paid for. Whatever amount it will be in the future might be nice. Not having to work for an employer ever again would be much nicer.
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supernova Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 10:11 PM
Response to Original message
2. He might as well ask for the lump sum
If the co goes belly up now or in the near future and he leaves it in until he's 65, he might not get anything.

Pensions have become the last thing they payout in bankruptcy.
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elleng Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 10:14 PM
Response to Original message
3. Check the documents/contract;
all such provisions should be there. Take your time, and ask questions about any terms you're not familiar with.
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Milo_Bloom Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 10:19 PM
Response to Original message
4. They are very likely to make the offer
There are a ton of benefits to the company to pay you off in a lump sum, rather than committ to a lifetime of pension payments.

I don't think you will need magic words, so much as have an accountant review the offer to make sure you are not selling your soul.

You are possibly better to borrow against your pension payments to start your business. If the business fails and you have to claim bankrupcy, you can get out of the debt without losing your pension.

However, if you take the money in one lump sum and the business fails, you have nothing.

Something to consider.
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 10:25 PM
Response to Original message
5. A lot of sad stories start with the phrase "I liquidated my retirement to start the business".
Just sayin.
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Tue Jan-27-09 10:36 PM
Response to Reply #5
7. Yes and other stories start by "The company raided the pension fund".
I appreciate your warning but I feel that the money would help me now.
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 11:10 PM
Response to Reply #7
13. That's true. There are no guarantees either way.
Good luck with your venture.
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NRaleighLiberal Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 11:03 PM
Response to Original message
10. Is it a true pension, or was it convered to a cash balance plan?
I lost my job last year and went through this. We had a lump sum option - but it has to be rolled directly into an IRA or you suffer some pretty big tax payments. If it is a true pension, I am not sure if you can take a lump sum.
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Tue Jan-27-09 11:12 PM
Response to Reply #10
14. They changed it for new hires ten years ago to a cash plan.
I haven't talked to HR yet.
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NRaleighLiberal Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-27-09 11:04 PM
Response to Original message
12. delete...duplicate post
Edited on Tue Jan-27-09 11:05 PM by NRaleighLiberal
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