Has anyone been retired with a Ford genuine pension for a couple years, and asked by Ford if they will switch to a lump sum? Is this possible? I have a friend who worked for Ford from 1985-1995 ish and got some kind of pension eligibility, but has not yet retired.
They told me Ford has contacted them 2 or 3 times to get them to accept a lump sum vs the planned future pension. Anyone ever heard of this?
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I took the monthly pension in a year where the interest rates were even higher than now.
If you do research, you will see in most cases it's almost impossible to do better on your own. Why do you think Ford wants you off it's books? Several executive friends (up to LL2) who retired when I did also took monthly pension. Doesn't make sense to trade a government guaranteed annuity for an unguaranteed one with an insurance company. 505550
Try to stay balanced. I have friends who took the lump sum and put close to 100% in stocks. They are in a world of hurt but hopeful for a big rebound soon. One is even talking about needing to go back to work.
If you have the frugal gene and are skeptical of easy gains that will help.
Other friends have rental houses or farmland which helps a lot with diversification.
So poster, 4ltr+1iDXtrtz, what do we take, the lump sum or the monthly?
Some of you are so ignorant of your benefits you don't even deserve them.
The lump sum is based on a financial concept called the present value of money. Using projected future interest rates, money given to you today is equivalent to receiving the monthly pension for your lifetime based on actuarial tables. The interest rates are set by the IRS not Ford.
The monthly pension has nothing to do with interest rates. It's a formula that includes pay, years of service and age among other things. It's invested in numerous financial instruments.
So no, the monthly pension is not impacted by interest rates. Doesn't go up or down when the rate changes. And is not adjusted.for the cost of living.
I understand that if one retires with the monthly annuity instead of the lump sum, this form of pension is NOT affected by interest rates.
State Street is a big money center like Black Rock. They administer Ford's pension and the checks do come from State Street.
Question -- when the lump sum drops due to interest rates do pensions rise. This would make sense as the Ford pension is never adjusted for inflation.
You should recheck. Mine went down 26%
I am taking the LUMP. Don't want to leave 20%+ loss of my lump to the POS Farley for his non deserved bonus
The government didn't allow lump sum pensions until 2012. At that time, Ford made a one time offer to everyone getting a monthly pension a chance to convert to lump sum. Now, you must decide when you retire between monthly or lump sum and the decision is irrevocable for life.
I worked at Ford from 1996 - 2004. In 2012, I received a letter and took the lump sum instead of waiting until I was eligible for my monthly amount. At the time, my lump sum was $30k.
Response to post about taking annuity over the lump sum... everyone's circumstances are different. Until November 30, the lump sum amount is a good deal for me due to the higher segment rates yielding a high lump sum. After November 30, the lump sum goes down ~23%. Plan wisely, folks, and consult a financial adviser, NOT Ford Financial Engines.
It was allowed and offered around 2012, then disallowed by the IRS a few years later, and apparently allowed again based on this: https://www.calfee.com/newsletters-64
The lump is not a good deal in any case at this time.
All based on general interest rates, i.e. what you could earn with conservative investments.
Go with the annuity for now if you expect to live on for a while.
Pensions are pretty rare nowadays anyway.
Feel blessed.
Ford be with you.
Ford reached out to their monthly pension retirees once back in 2012 and offered to buy out their monthly pensions with a lump sum. It hasn't happen since then.
https://workforce.com/news/ford-to-offer-lump-sum-pension-payouts-to-ex-workers
Never heard of it. Ford pensions are an annuity, if you take the pension your checks come from State Street, not from Ford.
There are companies that buy annuities for a lump sum but we have never heard of Ford or State Street initiating this.
Ford started offering the lump sum pension in 2012. Before that, the monthly pension was the only option. Since your friend hasn’t retired yet, it seems reasonable that they would be offering both.
My wife worked at another large company and left after 10 years. About 8 years later, we received a voice mail regarding her ability to take the pension as a lump sum. Her amount was small and did have adjustments for inflation, but tech companies were running through some tough times and I was concerned about bankruptcy. We took it and never looked back.
I would advise your friend to ‘retire’ this year by take the lump sum and roll it over to an IRA. It does not affect your ability to keep working. As always, your friend should consult a financial professional.
My husband was offered the lump sum and took it, after having left, voluntary quit, with 20 yrs of service.
One other note from the previous post. My previous employer has not made a lump sum offer with the interest rates low the last few years.
I have a small pension from a previous employer payable when I turn 65. On several occasions, they have offered the opportunity to take it as a lump sum. I don't know if similar offers are ever made once the monthly pension starts.
My elderly dad was offered like 75k, but he declined it. My uncles dad also got an offer, not sure how much, i think around 50k or less, but he declined as well. He died shortly after (my uncles dad.) My dad is still living at 81, so he was better off with the monthly.
Yes, they do it every few years. But I've not seen anyone accept it. Once they are used to getting the monthly for decades they just want to stay with that.
I haven't heard of it.
You have to retire by Nov 30 to get the lump sum at the current value.
The interest rate adjustment kicks in Dec 1, then lump sums will be 25-30% less. (Per my financial guy, based on what he is seeing for GM for a person in their 50s. GM adjusts using July rates, Ford uses Aug rates.)
My guess is Ford is hoping to clear out a bunch of pension obligations by getting them to take a lump sum, and I'm guessing they will say it will be as of some date later than Dec 1.
Yes