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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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  • Derf
    Interesting ! The only reason I can see to take a
    1/2 distribution & monthly payment would be if you're on the way out, if you catch what I'm saying.
    Derf
  • shipwreckedandalone
    Yep. Doesn't have to be 1/2. Could be any combination. The more options the better. Many of my friends were forced to take lump sum to pay off debt at retirement even tho their debt was much less than the lump sum. The PBGC rate is at record lows of 0.50% right now which is pushing up lump sums substantially (around 8% YOY). Eight years ago PBGC was at 4.75%. Who predicted that???
  • beebee
    shipwreckedandalone said:

    Yep. Doesn't have to be 1/2. Could be any combination. The more options the better. Many of my friends were forced to take lump sum to pay off debt at retirement even tho their debt was much less than the lump sum. The PBGC rate is at record lows of 0.50% right now which is pushing up lump sums substantially (around 8% YOY). Eight years ago PBGC was at 4.75%. Who predicted that???

    I have a friend who will be applying for PBGC benefits soon. Could you clarify / explain the "lump sum 8% YOY" calculation your referring to?

    Thanks.
  • shipwreckedandalone
    The PBGC rate for 8/2015 was 1.50%. The PBGC rate for 8/2016 was 0.50%. This resulted in the 8% increase in the lump sum payout in the specific corp plan I reviewed. This particular corporate lump sum was based on a formula using numerous variables such as years of service, salary and the PBGC rate. Thus, the percentage will be different for each individual. I am not referring to a pension default scenario where PBGC insurance is needed. My point being the large reduction in rates could result in a nice increase in lump sums but each plan is different based on their respective formula. Do your own due diligence.
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