How much value would you put in a pension if you got another job offer?

Question

Here's the scenario: You currently have a job that has standard stuff (reasonable pay, benefits, etc). This job also has a pension plan in place, but will no longer be available to new hires as of 1/1/07. But as for right now you would have the pension if you stayed until retirement (assuming no circumstances like the company going broke and terminating pension).

My question is how much weight would you put in that pension plan if you got a job offer similar to your current job but it was a little better (in terms of pay, cheaper insurance, shorter drive, etc) without the pension plan?

To clarify: 29 years old so retirement is a ways off...and I'm not the best with saving and putting money back but try to contribute to 401k...

Answer 1

If the pension benefit offered by your current employer is substantial, this is certainly much better then a slightly better job without a good pension plan. Doubly so for a person who admits they are not saving on their own for retirement.

I wouldn't casually consider leaving your current job until you are at least 100% vested in the pension plan. If down the line they freeze the plan (meaning no new benefits earned by anyone), or you have already earned sufficient credit to receive the maximum benefit allowable in the plan, then it is fine to leave for a slightly better job. Only if you receive a great job offer should you leave beforehand.

Answer 2

Part of your decision will depend on your age now. Is retirement around the corner or are you still in your 30's? The younger you are the more freedom you have to replace the value of the pension. Do you have the personal determination to put your savings on the expenses into an annuity that could replace the pension? If you have control of your retirement funds you are in better shape than relying on another's program but only if you are strong enough to do what is required for your long term benefit.