Union Pensions

[LivingAlmostLarge]

I have a friend whose husband works for a union. The problem is they just changed the laws for collecting the pension. Earlier it was 25 years worked = 80% of salary for life. Now it's 55 = 75% of salary.

Her husband is 40. He was planning on retiring in 5 years but can't now. They are wondering do you think they can change the retirement again before he retires?

Do you think they will increase the requirements or lower the pension amount? Should they get out now and go work for a private company for more money?

She is debating this heavily now and they are both very worried. This was the majority of their retirement planning and yes they realize it was a bad idea.

But where do you think union pensions are going? And anyone have experience with it?

[Taribor]

yes, his pension can change/lower again. In this day and age there are no more promises when it comest pensions. I personally would not stay, or leave a company based on having/not having a pension, as my only criteria.

At 40 he is young enough to still have a very nice retirement with a smartly invested 401(k) and IRA, then he doesn't have to stress it. I have watched my dad go through the same thing with his US Steel pension.

[dardhel]

I tend to do all retirement planning with the assumption I won't be getting a pension. That way I am set if the planets don't line up.

[tripods68]

Anything is possible, but i would seriously think it hard before leaving his current job. Having a pension is still the best way if you can retire at 55 @ 75 of his final comp. I don't think you'll ever find this type of benefit in private sector unless your husband reach a SR VP status.

[dfeucht]

I'd be surprised if they could just change earned benefits like that. Typically if a change is made in the formula for calculating benefits that change can not be retroactive only prospective. I'd have to research pension law including ERISA a little more, but something seems to be missing here.