Will a $500,000 lump sum be worth less on Jan. 1, 2019???

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anonymous

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Please explain, will the balance be worth less if I don't retire on 12/31/2018.?? I know it changes to a cash balance plan, but why must I leave the company by the end of 2018?? I spoke with EY, this is what lump sum is worth today, I'm 20 years in. Thank you! I wonder if this is why packages are not being offered as Merck knows many tenured reps will leave soon due to pension changes???
 






anonymous said:
Please explain, will the balance be worth less if I don't retire on 12/31/2018.?? I know it changes to a cash balance plan, but why must I leave the company by the end of 2018?? I spoke with EY, this is what lump sum is worth today, I'm 20 years in. Thank you! I wonder if this is why packages are not being offered as Merck knows many tenured reps will leave soon due to pension changes???
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The conversion will leave approximately 40%.
 






anonymous said:
Please explain, will the balance be worth less if I don't retire on 12/31/2018.?? I know it changes to a cash balance plan, but why must I leave the company by the end of 2018?? I spoke with EY, this is what lump sum is worth today, I'm 20 years in. Thank you! I wonder if this is why packages are not being offered as Merck knows many tenured reps will leave soon due to pension changes???
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The smart ones who plan to continue to work are leaving now. The example above describes the typical sales rep at 20 years, 400-500k in lump and 400-500k in 401k. Young enough? Leave now while the pharma job market is hot again. Your 500k lump cannot be touched and will be waiting for you at 62, earlier if you take a penalty. Take the million and run. With looming cuts and 2019 rumors you do not want to wait to be in a cattle call mix with thousands of other Merck employees fighting for external jobs.
 






Stay and milk it to the very end; car, benefits and all as it will end soon enough. With 20 yrs you are 45 or so there is age d and you need to go back to school and reinvent yourself. Pharma is dead but keep collecting until you cannot.
 






Pension changes in 2020. It is not a rumor, it is a fact. Check out the summary plan descriptions.

The only thing that will affect your $500k is the quarterly interest rate changes. If rates go up, your $500k will go down. If interest rates go down (not likely), your $500k will go up.

The whole "2019" thing refers to the last full year the average income pension calculation will be in play. Starting in 2020, the cash balance starts and proceeds to screw over the 40-50ish workers by scalping the back end of their pension (the bulk of it).

By the way, if you are not 55 by then of 2019, you screwed up by not leaving a long time ago!! Your pension was cut in half when the announcement was made regarding the cash balance starting in 2020.
 






Anyone not 55 in 40's faces age d. The best deal is for them to milk it to the end as that is different for everyone anyway. Times are changing and big pharma is cutting back. It is about time.
 






No need to leave due to pension changes. You don't lose what you have already accrued. You just get screwed starting in 2020 on future earnings. That is the year the cash balance changes take place.
 












anonymous said:
Then why did someone post that as soon as 2019, your balance will be 40% less? That makes NO sense? They can't take what you have already earned or accrued?????
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Hope is not a strategy. If you decide to roll the dice and stay to find out what happens to your retirement balances then you will know in 2020.
 












Pensions are not guaranteed. Some company could buy Merck tomorrow and do what we did to Schering employees and their pensions or do away with it altogether.

If that does not happen, you will receive 22 years of service ( through 2019 ) calculated under the old generous formula and remaining years calculated under the new cash balance formula.
 






anonymous said:
Then why did someone post that as soon as 2019, your balance will be 40% less? That makes NO sense? They can't take what you have already earned or accrued?????
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Because they obviously are misinformed.

The pension calculation changes 01/01/2020. Cash balance going forward. Not sure how long Merck will keep the cash balance. You don't lose what you accrued, you just slow down the growth of your pension by a large margin.

People with alot of years who are late 40's and early 50's (and not 55 by the end of 2019) are going to take the biggest hit.
 






Live your life and enjoy all of the perks; many other people do not have them. If you have been around awhile you cannot duplicate what you have and in over two years could be hit by a doctor in a medical building parking lot. So I say take a deep breath, save, and do the best you can under the circumstances.
 












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