Reasons to Hold Off on That Pension Buyout Offer | Time by Mark Miller
Published: October 08 2014
If you work for a company with a pension plan, don’t be surprised if you get an offer soon for a lump sum buyout—a deal where you accept a pile of cash in exchange for the promise of lifetime income when you retire.
The price tag for these offers is especially attractive right now, from the plan sponsor’s perspective. But workers might do better by holding out for a better deal, or by rejecting the buyout altogether.
A growing number of plan sponsors are trying to get out of the pension business, or lighten their obligations, by buying out workers. The number of buyout offers has accelerated in recent years, in part because of interest rate changes mandated by Congress that reduce their cost to plan sponsors.