what do you think of pensions? Do you have one, are they worth it?

Answer 1

that's a simple answer with a REALLLLLY complex answer. It depends on: assuming your talking about company plans
1. is there matching funds and what percentage(this means for every 1% of your income the company will contribute a % example: you put in 1% and the comapany puts in 1/4% or 1/2% or 2/3%-you get the idea
2. what are the options: usually ALL matching funds(the money the comapny contributes) must go into company stock. Usually, the money you contribute can go to several places(high risk/high yield) down to bonds(low risk/low yield)
3. how's the comapny stock doing?
4. find out what % the company pays on the ENTIRE package. example: my wife just went to work for Home Depot. They pay 1 1/2% WOW. but when you read the fine print they only pay that for the first 1% the rest (up to 6%-the max) is only 1/2%. and the comapny stock has gone down for the last 5 years.
5. the money the company puts in is not yours until your "vested" you get 0% of the money THE COMPANY PUTS IN for the first ? years(the money you put in is ALWAYS yours) you become "fully vested"(this means the money the company puts in is your's also. in some number of years. usually 7 to 10 years. this decision is made by the comapny.
6. the money both you and your company put in "invest" is USUALLY without load. this means there is no charge for putting in your money(but this also depends on the company)
7. BOTTOM LINE! IF you plan on staying there(even if the comapny doesn't pay a good % you will be money ahead by contributing to the "pension plan"
8. TRAP!!!!!!! you can not touch this money until your retirement(unless you meet one of several exceptions) with out paying a severe penilty. My wife got a wild hair(southern term meaning she lost her mind) and withdrew 150,000 from the pension plan. it cost us $47,000 in taxes and penilties.(due at tax time)

hope this helps

Answer 2

The answer to this depends on your location.In Ireland we have PRSA's which if your employer does not provide a company pension you may set one up independently, you may also have voluntary pension contributions to bump up what your employer already contributes.
A pension is vital these days as the amount of people that will rely on them far out numbers the amount of money in the pensions funds around the world.

Most financial institutions will offer a type of pension/saving scheme...ring around see whats out there.
There is no point being 65 and broke as the chances of getting work are slim.

Good Luck

Answer 3

I think pensions are great. My employer has a pension plan and the amount you get depends on how long you have worked and what age you retire at. Now whether or not this pension plan will still be in existence when I retire in 25-30 years is another story....

Answer 4

In the USA at least, the word "pension" has two different meanings, one of them broader to cover a range of retirement plans, and one of them narrower to mean a retirement plan paid for by the employer or a government.

I'll answer the question using the latter definition because I think it is the commoner one. What I think of them is that they're not going to be around much longer, in ANY country.

The problem is that corporations that offer them are having to compete with corporations that don't offer them--and, quite frankly, they can't compete. It doesn't help that most of them in the USA at least were raided in the 1980s after being declared "over-funded". Now many large, older US corporations have pension liabilities so big that the plans are likely to be terminated during bankruptcy court proceedings. Indeed, intentionally going bankrupt is a popular corporate strategy for getting rid of these plans. Being regulated, it is hard to get rid of them, especially in unionized industries.

The Pension Benefit Guarantee Corporation is probably teetering on insolvency itself, and in any case you are NOT guaranteed full benefits if your pension plan goes insolvent.

Government pensions are being phased out by letting inflation eat away their purchasing power.

If you are asking from the point of view of a prospective employee, it is actually to your advantage to "pay your own way" in a "defined contribution plan" (such as a 401(k) plan), because it puts less financial stress on your employer, and prevents the employer from having an incentive to downsize you, offshore your job, or otherwise economically starve you.

There are other issues. In a defined contribution plan, any money that you contribute to your own retirement is YOURS. You might lose an employer's contribution that hasn't vested, but they can't take away anything that you contribute. Since you contributed pre-tax dollars and, more importantly, the earnings are also tax-deferred, this is basically free money. Since most retirement programs are integrated, getting a "free" pension plan can result in taking away some of your ability to provide for your own retirement (only so much money can be contributed by you and your employer for your benefit in any one year--roughly the lesser of your annual pay or $42K--not responsible for constantly changing numbers please). It's better to have as much money as possible fully vested (meaning, you own it), than to have a promise that may never be fulfilled.

This answer is provided for informational purposes only and does not constitute financial advice.

Answer 5

Unfortunately pensions and medical coverage, gained by a small group of workers and execs, are available only to a "select few".
They are considered to be "free" benefits to those "select few".

However, you and I are paying for those "free" benefits and pensions in the price of those products produced by those "select few".
And certain of our government support this, as those companies and the "select few" contribute to their coffers.

The rest of the populace pay the price with no similar benefits.

Answer 6

Well, if the alternative is living out your old age in poverty, then I would say they are a good idea.