So when does the defined benefit pension plan get cut or changed?

To #99 Ten times the annual pension amount is not that much in a lump sum as it would only be comparable to a pension for ten years. As for the post above: many people get pensions over $60,000 because many people spent decades here and many were in management.

 

Yes, the option is that it can be rolled into an IRA. So there is no tax to pay now. This is what I've decided to do. A few have posted here being concerned about if the pension itself is safe, but that's not my concern. My concern is that JNJ will come back after this one-time lump-sum option is over, and force the much lower paying annuity on us that is offered now.

 

Oddly enough, my friend who was offered this from Lucent and was already retired collecting the Lucent pension, was also offered 10 times what the annual pension was being paid out as a lump-sum. So that might just be their formula for lump-sums, I don't know. I'm only using those two data points from completely different plans, companies, ages and years of service.

I'm taking the lump-sum JNJ is offering, rolling it into an IRA and hopefully investing it will do as well or better than what the original JNJ pension would have provided. And no concerns about the pension being reduced because of social security that I saw mentioned, because it will be a lump-sum.

To me, retirement planning is about having some degree of certainty and control over a situation. Leaving it with JNJ benefits hoping they don't force us into options which are even worse in the future isn't the way I want to proceed. Doing so won't give me peace of mind even if the JNJ benefit turned out to be as originally stated and I have no problems with it in retirement.

Thanks to everyone who contributed your thoughts to this discussion. I brought it up to see where everyone else was at and their thinking and concerns.

 

These companies no longer want the lifetime responsibility of paying their employees what was promised. If you are (for example) retired and collecting a $60,000 a year pension and if you live to 92 and retired at 62 that is 1.8 million for the thirty remaining years of your lifetime. If that $60,000 is now multiplied to $600,000 for the remainder of your lifetime it is not a good deal. Although you get it as a lump sump, it is highly, highly doubtful it will achieve the additional money in your lifetime. And the longer you live, the worse the deal. And if this is what is coming we all will not be happy.

 

Poster #99 again. Yes, in this example the lump sum is a really bad deal. A few other factors are at what age are you offered the lump sum, how much longer do you have to work, etc. I personally like the certainty of the lump sum since JnJ really is a greed machine where the only certainty is change. It's tough to put a price on peace of mind.

 

In your math example, is all the more reason why JNJ is offering the lump-sum or the crummy annuities options now. I am very skeptical for those who don't take any option and leave it up to the JNJ pension benefit to continue as if none of these are offered will get what they were promised/expected. No one else here in this thread has shared if their numbers are 10 times annual JNJ pension, but it is for mine, which greatly falls short as you have shown.

The annuity they offer, if you select that option, must begin December, 2016 and it will be taxed. No way does any of the annuity options offered replace what the JNJ pension was, even if you put aside the money now until you need it at age 65. I don't know why they didn't at least offer an annuity that doesn't begin until age 65 (same as the JNJ pension), but I suspect that would easily allow people to compare apples to apples, and be upset. It guess in some way, it might help fool people the way it is presented how they are taking early retirement even though the payment is small. I guess for some people they can get easily distracted because they are being offered money each month now via an annuity.

At least the the lump-sum, it can be rolled over to an IRA now.

Anyone else being offered this situation now, what are you planning to do?

 

I don't know about any else's story, but mine is I am 58 years of age. I've not worked at JNJ for six years now. I was going to wait until 65 years of age, which is the highest monthly amount you can get for the JNJ Pension. I wasn't planning on retiring until regular retirement age which is 67. I only worked at JNJ for 8 years. There is nothing in any of the information I got from JNJ which mentions any JNJ operating companies or the one I worked for.

 

I don't know why you pointed out that no specific opco was named in your paperwork. Your paycheck & benefits came from J&J and so did this "opportunity".
I know I will get flamed but my question on this is a bit different.
I left voluntarily and on good terms. I may, like the great AG, come back someday.
If I leave my pension as-is, and return, does the pension terms pick up where I left off?
Because if I returned, I'd be making a lot more, and I always thought pensions were based on your final "X" number of years' comp.

 

Because someone in this thread asked if it applies to all JNJ companies.

You should start a new thread asking your question to get the attention of those who have that experience.

 

To #107 you would never had made it here until 67 and you can collect your pension whenever you want at 55 or whatever. If you collect it at 70 it is more than at 65 as that money increases for every year not utilized so 65 is not the be all and end all.

 

The JNJ Pension literature maxes out the monthly payment at age 65. You can start as early as age 55 but the monthly amount is very low. Perhaps this is different for those who are still employed at JNJ, I don't know, but what I read said the JNJ Pension maxes at age 65. I'm not referring to social security, just this JNJ Pension. I don't see any indication that you can get a higher monthly payment if you take it later than age 65. Maybe this has to do that I had only 8 years of service with the company, but an "Assumptions" report I am looking at now that was generated online in 2013 has three ages available when you can being receiving benefits and for me they are ages 55, 62, and 65.

 

It accrues the longer one lets it sit. If you are 70 it is more than 62 or 65.

 

If you left JNJ before age 55 you have to start taking your pension by age 65.

 

OK, thanks, that makes sense. Because I left JNJ at age 52, after having worked there for 8 years. So waiting past age 65 to take the JNJ Pension isn't an option for me.

 

Haha you idiot. TAKE THE LUMP SUM YOUR MORON. In 30 years tournament pension will be gone. In 10 years it will be gone. When you die it's payout dies (I think). Take the lump sum and place it into a properly planned Roth IRA and take the tax hit. If you set up the IRA using a trust that IRA can grow tax deffered forever and be passed onto your kids or grandkids tax free an dit will grow that way for their entire lifetimes.

You would take a pension that will be taken from you or reduced. It's a certainty. And you would pass on 10% or better returns in an IRA you control and can pass down to your kids!

PAL, I took my lump And my kids who will retire in 40-50 years will be worth 10-20 million dollars TAX FREE. How can you pass that up. Enough time and money and that same acccoubt will make my grand kids worth 100 million. The math works.

 

Despite the typos in this post this guy makes more sense than anything you will learn at JNJ. The lump payout is the key to properly setting up your kids and grandkids for life. Pay a tax attorney who only works with very wealthy people how to set this IRA up. Another big JNJ lawsuit and a few bad quarters and our pensions are toast. Take your money and change your families trajectory.

 

To post #115; no, you can make provisions for your spouse to receive your pension but it is a reduced rate you would be receiving. You are very optimistic. Tax free can be changed with tax laws at any time and taxes will increase in the future for many reasons. Those of us receiving the monthly gig love it and we are very thankful for those years we have been receiving it.

 

If were going to go by the numbers people in my family live into their late 90s. Spouse mid 90s. My kids and grandkids are being taught self reliance and initiative. They will make their own money. From what I've see, it's the trust fund brats that are the problem.

 

To #108 If you returned your new years would be under whatever the new pension is at the time of hire.

 

Who would want to come back. And from what I understood there is no traditional pension going forward.