via NWI Times,
by F. Marc Ruiz, Nwitimes.com,
October 1, 2015
The traditional defined benefit, or pension plan, is truly becoming a thing of the past. A recent GAO survey of 183 pension plans indicated that even among those plans that do still exist, 20 percent of employer sponsors intended to terminate the plan in 2015 alone. This trend is certainly in full swing in Northwest Indiana as well.
When a pension plan terminates, each vested participant in the plan receives a notoriously complicated notification letter announcing the termination. For many younger workers, their employer’s pension plan was something way off the radar, so when the convoluted notice comes in the mail it often causes even more confusion.
But it does require some decisions, and options must be considered wisely.
Usually the employee entitled to the pension can choose one of four primary options: to keep the retirement benefit (typically payable at age 65), take a much smaller income benefit immediately, take the current cash value of the benefit in a check now or rollover the cash value of the benefit to an IRA.