Pension plan stopped

I work at a small company , only 25 of us currently have a pension plan . The company informed us today that they are no longer going to participate in the plan , they will be stopping it as soon as they can , has anyone ever experienced this ? Im fine financially but was wondering what options I will have with the money . Im assuming I can roll it into my current 401K , or cash it out . I plan on looking around before I commit to anything . Stocks and other investments are also on the table. Im wanting to keep a small portion of it out for a couple remodeling projects I have planned , didnt know if thats allowed (not talking all the cash, just some ). I guess whatever I keep out will be taxed ? I plan on meeting with a financial person in a few weeks .

 

So they have actually offered a cash out plan?

I don't think you can mix in with 401K (don't quote me on that)unless your pension plan is a "qualified employee plan."

I had the same - happened when started at a company, maybe year in. Well finally after I retired, I get $427 month. We were not offered a cash out option. Only differing monthly amounts after retirement depending on if we wanted it to continue with surviving spouse. I wouldn't be surprised if the would be the same for you.

 

Thank you . It does seem like Im going to have to find out a lot of info soon.

 

Depends on the type of pension, I think. Do you work in a union for your company?

 

Yes here's some info if you get a lump sum

https://meetbeagle.com/resources/post/can-a-pension-be-rolled-into-a-401-k
https://www.nextgen-wealth.com/blog/pension-lump-sum-401k-ira

"qualified employee plan': https://www.investopedia.com/ask/answers/206.asp
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It gets deeper, but get the facts first.

I would go IRA IF your 401K has limited options, or no Brokeragelink (where you can buy most all stocks, funds, bonds)
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Only you can decide lump or monthly. Age, when you retire, heck even how good of investor. I WISH I could have taken a lump sum, but I was not planning on a pension at all and had been fueling 401K and IRAs since I was 24. So that $427/mo buys some extra beef or whatever.

 

Yes I do. Ive been here for over 30 years

 

Thank you . Im leaning right now towards lump sum .

 

Lump into an IRA IF possible and don’t look back.

Then world will be your oyster- so many good options. Not just investment choices but Roth IRA, 59.5 withdrawals or not, eventually RMD if not Roth, etc

 

Short answer: any money you don't roll over (keep for yourself) will be taxed plus a penalty (20?).

 

Small companies, and even most big companies will screw employees over time and time again. This is why I have been desperately trying to get into a city/gov/county job, with a good union. It just works and union haters can say what they want. 90%+ of union workers are well taken care of, amazing benefits and amazing pension.

 

i've never even seen a job in my field advertised as having a pension. I didn't even know any companies still did them

 

Some government agencies still have a pension but it’s changed significantly. I was grandfather into my plan which I have now. They take the highest 3 year average then get 2% per year worked. You can take your full pension at ago 65 or any age after 30 years work. So I retired at 62 with 37 years work. I get a 74% pension with some reduction for choosing a plan where my wife gets my payout if I die. It has a COLA built in per year based on inflation. Now they have changed it to 1% per years worked and some 401K money. There are pros and cons to both plans. When I and my wife die there is no principle pot to pass to my kids. We all pay SS so we get that in addition. Too many options and too many chances of choosing incorrectly.

 

If you are a union member that has a pension in your union contract, the company cannot terminate a pension "just because". It would require the company being in bankruptcy court proceedings, with the court approving the termination. Is your company in bankruptcy court?

 

You are correct that employees will get screwed over and repeatedly. I don't know if I would agree with the statement that 90% of union workers are well taken care of - but what do I know. Pensions? Not many and big corporations try to get out from under them every chance they get. Can't speak for government pensions because I have never worked in the gov.

 

Here in CA (I know I know) LA city or LA county jobs are really strong options. The unions don't mess around. Constant big raises, tons of vacation time, disability can be taken without the fear of getting fired. Your job is somewhat protected and it's known that you have to REALLY mess up to get fired.

I know several family and friends in city or Gov jobs here. They all praise it to the max.

 

Yeah and who pays? No thanks when I see them not working on the job.

Way off topic. Waiting to hear from OP

 

Who pays? If the job is with a water or electric department, then the water and electric customers (millions of them) are paying.

 

If you do take a lump sum buyout and put it in an IRA, make sure to then get that money invested in a fund(s) that matches your risk tolerance but is actually earning. I've seen a lot of people comment/ask why their account has only returned <1% and its because their money is just sitting in cash instead of actually being invested

 

You really need to get a financial advisor/planner. Even though there are some knowledgeable people here regarding money and finances, getting financial, investing info from strangers on the internet is just a bad idea. At best use the info you get here to ask about and discuss with your financial advisor.

 

Well that's just, like, your opinion, man...