9/1 is going to be an important date for those who are eligible to retire and have pension from Ford. Many Ford employees will elect to retire once they see that their pension lump sump decreased by 10 to 20 percent. Interest rate has been rising, the new pension fund interest rate will take effect at the end of August. Check your lump sump value on 9/1.
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My spreadsheet shows 23% drop. Lump sum or not a lot of folks will need to make some pretty heavy decisions in the next few months. The pension fund is well funded if you plan to go that route but if you are on the fence about wanting to stay a few more years you may never recover the lump sum loss.
Not so fast....The new government August rates won't get published by the government until mid September, and Ford doesn't get their system updated until October. So, don't go racing to the estimated on September 1st. You won't see a change then-wait until October.
https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates
I plan to retire this fall. The lump sum hit will take place on Jan 1st of 23CY. NESC will answer all questions regarding when that takes effect.
A few of my coworkers with pensions are heavily considering it with the changes upcoming and layoff concerns. I don't blame them, and don't want to see them get screwed over one way or another. If they do retire, we'll lose an insane amount of knowledge in my area, and it's gonna be a mountain to climb to pick up their job duties.
Aug 2022 rates are published on Sep 21 just like July rates will be published on Aug 21. The Ford lumpsum calculator will show the Jan1 lumpsum on Oct 1st NOT Sep 1St. You will potentially see a drop of 26 to 28 Percent depending on the Aug 2022 rates. Currently if you take the June 2022 rates, I see a 23.5 Percent hit on my lumpsum. Good luck Everybody.
The lump sum calculator for 2023 won't be updated until around 3rd week of September- after irs min segment rates for August are published.
This is false. Reset happens Jan 1st.
To be clear, in Sept the online pension tool becomes updated to show pension lump sum amounts using August 2022 fed interest rate hikes.
However, Those who choose to retire and ‘commence their pension benefit’ within the 2022 calendar year -the last day of which will be December 1- will capture the fed interest rates as of August 2021.
Those who commence their pension benefit lump sum subsequent to that will be subject to the August 2022 interest rate calculation.
A good rule of thumb is to assume that for every one point of federal interest rate hikes equates roughly to a 10% decrease in lump sum pension amount.
Good luck to all.