TIME FOR CHANGE
Veteran
If you retire at 60 do they pay you your pension until you die or do they pay you your pension for twenty years and then stop paying?
Any one know the answer
Any one know the answer
How long do they pay you your Pension
- Thread starter TIME FOR CHANGE
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Till you die. Thats the liability with a DB,
After the PGBC gets through with your pension you should be getting about 10% of what you thought you were supposed to get.
Yep; for the rest of your life.
Better start thinking about the taste of Cat food for dinner.
Frank Szabo
Veteran
That's BS - it depends mainly on the pension's funding level if handed to the PBGC. Max yearly payment is over $44k which would cover most everyone that "works" for a living but doesn't do the pilots and other high-salaried people much good.
That's why the $46 million management slush fund was established in 2003 - so the "real" elite wouldn't take a cut in retirement benefits in the event a Chapter 11/dump-the-pension-on-the-PBGC thing were done. The mechs would be OK, but the lower office forms of life and the pilots would be totally screwed. Those already retired would notice little, if any, difference except perhaps the name printed on the checks.
Perhaps I'm wrong, but I believe our (TWU) concern re: keeping the damned pensions has helped the pilots and higher paid non-elite office personnel more than it has us.
Almost completely correct except maybe for mechanics or fleet who retired early (prior to age 65) as the PBGC maximum falls off drastically if you retired at, say, 55 or 60 (the old pilot retirement age of 60 really hit them hard and caused a double hit to their pensions). Early retirees (TWU members) might see some reduction if the PBGC took over AND if the underfunded percentage was substantial.
eolesen
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So much misinformation, so little time....
Max guarantee only applies to a plan which doesn't have assets to cover the liabilities. Max for plans terminated in the last three years has been $54,000 if you retire at 65 without a survivor benefit, or $48,600 with a survivor benefit at 65, which is still probably full payment for 90-95% of the non-pilot population.
From the PBGC website:
"If the benefit payable from the plan assets is greater than the benefit that PBGC guarantees, we will pay that larger amount. PBGC also may pay additional amounts based on our recoveries from employers-for example, a recovery from a bankruptcy case. However, PBGC can never pay a participant a pension benefit greater than what the plan promised."
Seriously, this is your retirement plan... How can you not know how it pays out, and how it is protected? Especially when it has been such a "don't touch" item from the union's perspective???
Max guarantee only applies to a plan which doesn't have assets to cover the liabilities. Max for plans terminated in the last three years has been $54,000 if you retire at 65 without a survivor benefit, or $48,600 with a survivor benefit at 65, which is still probably full payment for 90-95% of the non-pilot population.
From the PBGC website:
"If the benefit payable from the plan assets is greater than the benefit that PBGC guarantees, we will pay that larger amount. PBGC also may pay additional amounts based on our recoveries from employers-for example, a recovery from a bankruptcy case. However, PBGC can never pay a participant a pension benefit greater than what the plan promised."
Seriously, this is your retirement plan... How can you not know how it pays out, and how it is protected? Especially when it has been such a "don't touch" item from the union's perspective???
Frank Szabo
Veteran
What I tapped out was info I believe I got from you and other gurus, E. Some of it, granted, is out of date as I don't check websites (PBGC) too often - just working off (obviously) old info.
Still - not a bad deal, except for the pilots, and that seems to be who we've been protecting by allowing the union to use scare tactics re: "losing the pension".
The pilots haven't done much to help us, therefore, to hell with them.
eolesen
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Frank, I'm not questioning your comments. You're right that was ~ the amount a few years back, and it is repegged every few years based on CPI if I recall. But thinking it runs out after 20 years or that the PBGC only pays out 10% of the plan's benefit?...
Frank Szabo
Veteran
I really do realize you're not trying to start an argument and I apologize to you if I'm a bit snippy in my wordings occasionally - you'd really love me in person ... not a helluva ot better - probably worse.
To be honest, I remember looking up some info around the wonderous year of 2003 and, as is the case for this old mutt, I don't always retain everything I read as well as I once did. The number re: "max" yearly payout of $44k and change sticks in my head - it may well have increased over time and I may not have picked up on all the nuances of the rules - anything is possible. Hell, I'm lucky to remember the way to work every day, and I quit drinking years ago (eg, too much blood in the alcohol system).
As far as max length of time for the PBGC payments to continue, no idea at all. I had only ASSUMED it would be under similar rules as the company "plan" but that may have been a mistake to do so.
What you may remember was that the PBGC would only pay 10% of the "elite's" benefit, therefore, the slush fund was put in place for their benefit.
TIME FOR CHANGE
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I still have too many years to go to worry about a pension that probably will not be there when I retire. I was asking the question for a coworker who has three years left and will be 55 with 16 years of service. He had asked an HR person and they didnt know the answer. As far as being Protected ??? I also believe that if you are less than 60 and the company files for bankruptcy you get no pension. You have to be 60 or better to recieve benefits from the PBGC. I wouldnt call that protection. My retirement plan really doesnt carry much weight with the threat of bankruptcy hanging over your head for years on end. Reduced wages just equates to a reduced pension.
Frankly, your ignorance about your own pension (and your "I'm too young to care about it yet, since it probably won't be there for me when I retire" attititude) is astounding.
What exactly did the coworker ask the HR person? I doubt it was "will I get my pension every month til I die or just for 20 years?" Or might it have been "If I retire at age 55 with 16 years of service, how much will my monthly check be?"
This is also not accurate. Doesn't matter what age you are when your pension is terminated (Company filing for Ch 11 has nothing to do with it unless AA also terminates the pension in Ch 11), only that you are vested in the pension when it is terminated. If you retire and receive a check from the pension, and the company subsequently terminates the pension in Ch 11, then you get the same check from the PBGC (unless you're highly paid, like a pilot or management).
MCI transplant
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:unsure: ------I can't emphasize enough the importance of this retirement program! Whatever you do, don't through it away for short team gains!!! And don't through the 50 and younger under the bus!! As FW stated, the key to your retirement is to be vested. To get there you need to be a curtain age, plus years of service, to give you that "magic number"! And that number is contractually negotiable! Once there, your retirement is locked in, by either AA, or in case of bankruptcy, the PBGC.
It can be confusing for someone who has not spent some time reviewing the options. The typical pension has the company buying an annuity for the employee which will payout as long as (s)he lives. There are options though to take a guaranteed payout, that goes on for a defined number of years regardless how long you live and pay out to beneficiaries if you die before the term selected. There are options to even-level your pension to what you'd make when social security kicks in--early or at the normal age, and there are options for spousal coverage to continue after you die. All in all there are lots of options to cover a variety of situations you might find yourself in.
MCI transplant
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<_< ------- What worked for us when I retired is, a few years prior to my retirement, I took out an additional life Insurance policy, and had my wife sign off on continued pension payments if I should die.-------- The additional life insurance pays a lump sum at death. So she'll be covered!-------- If we choose to take survivor retirement payments, it would have drastically reduced our monthly pension amount. By going this route, we seem to be better off money wise per month. The trick is to shop around for Insurance, and take it out early enough to lock you into at least a twenty, thirty, or more, year policy, at a decent rate!
