Has anyone heard about cutting the lump sum payment for people with ver 30 years? Is there any documentation stating that the details?
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It’s only the lump sum that gets changed base on the internet rates. Your pension is not changed if you take the annuity. It’s years of service capped at 35 years + number of years paying into Contrib. When interest rates go up, your lump is going down. Anyone over 65 eligible for Medicare should pay COBRA to the beginning of the year because your deductible should be met. Good luck to anyone still there. I’m sure it is stressful.
Thanks. Few years ago, I did use the mortality table and present value starting from the age of retirement. It did not match NESC's number. IRS has a life expectancy value for other purpose, it is too low for this pension calculation. So pension calculation can change without any trace back to what the baseline known to us.
@khs+1ibeiXdv
I assume Ford uses the IRS mortality tables when they calculate the lumpsum. Ford's lumpsum calculation uses 3 interest rates taken from the August Government Discount Segment rates. The first rate is used for the first 5 years of the person's retirement, the 2nd rate is used for the next 15 years of retirement, then then the last rate is used for the remaining years of the person's life. I assume Ford uses the mortality table to determine an age the person may die for that last interest rate usage. The calculation is very confusing. You would need to just wait until Ford's estimator is updated to this August's rates to figure out your lumpsum.
It's not just for those with over 30 years, it's for everyone with a pension. Beginning Jan 1, the value of the pension will drop 10 to 20%. Those who retire by Dec 1 won't be affected.
Rates are well defined by IRS. Do you know how "mortality factors" are used in calculation?
No! Here are the details ....
The lump sum amount is calculated using the government mandated interest rates and mortality factors in effect at the time your requested retirement benefit is calculated. The actual lump sum amount payable to you will be calculated based on the interest rates and mortality factors in effect for the calendar year in which you commence your retirement benefit.