Pension Benefit Guaranty Corp.?
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Anonymous
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Hi, all.
A former employer (a struggling metropolitan daily newspaper) has offered me a lump sum pension payment. I'm 40. Fooling around some life expectancy calculators, I see I could live to 90. Ordinarily, I wouldn't even consider a lump sum. I'm not an investor, I'm risk averse and I like the idea of guaranteed monthly payments for life. BUT considering that the employer is a newspaper that is likely to start publishing only four days a week, I worry that the company won't exist in 25 years. I'm just learning about the Pension Benefit Guaranty Corp., which sounds like an FDIC for pension plans. I'm wondering, though, if the company shuts down in the next few years, would I still be able to get payments through the Pension Benefit Guaranty Corp.? What kind of documentation would I need? I worry that when the time comes, if the company doesn't exist anymore, I'll get zero. Thanks for any insight or advice. |
Anonymous
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Yes, the PBGC acts sort of like the FDIC. However, if the news paper fails and PBGC takes over your pension, you likely will get only pennies on the dollar. Call the PBGC's help line. They are happy to answer questions (but will not give advice).
Without knowing more, I'd suggest taking the lump sum and simply investing it in a safe Vanguard fund. But if you struggle with willpower and might use the Vanguard fund, I guess you could buy an annuity instead. |
Anonymous
Apparently that's not the case. I read others discussing this on a financial forum. Should get mostly all of it - but makes some calls and find out. |