Are pension contributions ending for the entire company or just new hires? And what happens to the money we have in our accounts? It sits there until retirement? I’m sorry for the stupid questions, I’m young and inexperienced with this.
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Maybe I am missing something here, but in my market I have a 401k and a pension plan. I was hired in 2022.
My pension was frozen in 2000. I thought the arc was a good deal until I realized my wife’s company does an ARC and a pension. Despite similar salary, her retirement plan is far superior and will provide much more security that our cr-p benefits.
Does this mean the PepsiCo Employees Retirement Plan (103) won't be affected?
If you're a new hire or young, pensions would not apply to you. Pensions were scrapped back in the early 2000s. Pepsi moved to the ARC program which is an Automatic Retirement Contribution instead - a percentage based on your salary that they contribute directly to your 401k. It is part of your total compensation package and does not impact your paycheck.
For us old folks that were here during the pension plan days, we were either capped at a set figure, or grandfathered where Pepsi still contributes to their pension. This is why Pepsi is offering VRPs. They want those of us with pensions to leave the company.
And because you said you're young and inexperienced, I'm going to offer you the same advice I give my kid. INVEST IN YOUR 401K! As much as you can. Pepsi will match the first 6% in addition to the ARC contributions. It's free money that will build up over your career and it's the most beneficial thing you can do for yourself and your retirement. Believe me, it comes a lot quicker than you image.