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It just became easier for employers to dump retirees' pensions

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US: It just became easier for employers to dump retirees' pensions

NOTE: I don't think this falls into the politics category, but if the mods/admins think so, then please delete this thread and I apologize . . .

This may just be CNN's usual "make a big deal out of just about anything" mode of reporting but here it is . . .

https://www.cnn.com/2019/03/20/economy/lump-sum-pensions-retirement/index.html

"With no fanfare in early March, the Treasury Department issued a notice that allows employers to buy out current retirees from their pensions with a one-time lump sum payment. The decision reverses . . . guidance issued in 2015, that had effectively banned the practice after officials determined that lump-sum payments often shortchanged seniors.
Now, advocates for the elderly worry that millions of people receiving monthly pension checks could be at risk."
 
So far, it seems only to allow it to be offered, not mandated. I don't mind them offering me a bad deal. I'd be angry if it were forced on me. A mandatory exchange at a price of less than an equivalent annuity would remove part of what was understood to be compensation at the time the employee & employer agreed to the deal. I do believe that my former employer should be free to exchange my pension for an annuity of equal value that they purchased in the market. But not just to unilaterally say "we're going to give you fifty bucks for it".
 
Correct. Companies can offer, but individual accept or deny. Seems having the choice could be very beneficial to some. There are always people who will make the wrong choice and complain about the consequences, but I don't see how this is a bad thing. I think it would be a very small percentage of people who would actually benefit from taking the lump sum, but it is not hard to see circumstances where it would help.
 
You got it right:
NOTE:
This may just be CNN's usual "make a big deal out of just about anything" mode of reporting but here it is . . .
The subjective word "dump" has negative connotations that tells me the article will be skewed to produce outrage.

Outrage generates clicks that sells ads on the internet.

The headline could have been "It just became easier for employers to offer retirees another pension option."

Sounds better, eh?

The kernel of truth, buried in the article:
"For retirees, taking a lump sum is entirely voluntary. "

A lump sum is probably a risky choice for most who have already based their retirement income on a fixed pension. It's hard to beat the returns of a pension fund with big assets and professional managers, especially if you are taking immediate withdrawals.

We made the option work for us when we both retired early, but we had other savings to live on while the lumps had time to grow AND we had a good financial advisor we trusted to find the right spot for the money. Companies have been known to reduce pensions and other benefits after retirement. After watching our corporation strip away management benefits and reduce benefits for incoming hires, we felt safer with the funds in our control.
 
Salaried retirees from my company were all offered buyouts about 7 years ago. Given my young age and excellent health, it didn't make any sense for me at that time. However, had I been much older and of poor health, it might well have made financial sense (of course, the offer likely would have been less). There was certainly no pressure or encouragement to accept or reject the offer and it was completely voluntary. I believe around 30% of salaried retirees did accept the offer.
 
NOTE: I don't think this falls into the politics category, but if the mods/admins think so, then please delete this thread and I apologize . . .

This may just be CNN's usual "make a big deal out of just about anything" mode of reporting but here it is . . .

https://www.cnn.com/2019/03/20/economy/lump-sum-pensions-retirement/index.html

"With no fanfare in early March, the Treasury Department issued a notice that allows employers to buy out current retirees from their pensions with a one-time lump sum payment. The decision reverses . . . guidance issued in 2015, that had effectively banned the practice after officials determined that lump-sum payments often shortchanged seniors.
Now, advocates for the elderly worry that millions of people receiving monthly pension checks could be at risk."

As a 'pension'er' rather than a '401k'er', I took a look at this, and you're right.

CNN trying to make news, rather than just report it. :banghead
 
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