Defined pension plan
My company offers a defined pension plan. I have reached 36.5 years of service and I am 65. The comstops contributing to the plan at 35 years of service. I just read a portion of the pension guidebook that states, if I work beyond my “ normal retirement date” the plan permanently withholds my monthly benefit for every month I work until I retire whether I choose to take my pension in a lump sum or annuity. It states notification of this would be given to me in writing one month after I reached my normal retirement age. I turned 65 in August and have not received any form of notification. How do they determine the amount that I forfeit? I’m afraid this is going to drastically affect the amount available to me when I do retire at 66.8 months which is my FRA. Rates for the pension calculation are not favorable and I’m hoping by the time I do retire they will be better. Can’t win! Thank you for your time.
Terry Says
This is pretty sophisticated. YOu need to check with the language of the plan to see if your “normal retirement date” is specifically linked to your Social Security Full Retirement Age.
It is really up to the HR department or plan sponsor to answer those questions for you. And to see if they will/can waive the penalty if they really want to keep you on. Sounds like a steep penalty for continuing to work past whatever they see as ‘normal’ retirement age. I can understand perhaps no future contributions — but a forfeiture of benefits at retirement is unusual. Perhaps, they are just warning you that if you continue to earn money as a salary, you won’t receive pension benefits for that month.
You must sort it out with them because they know –and are obliged to provide education –re the details.
