does this seem right?

[FLA]

My defined benefit pension was put on hold a few years ago. It is capped but earns ~3% a year. Last year it was worth 46k, this year it's down to 41k. I fared very well with stocks last year. I just can't fathom how not only did it not go up 3%, it went down 5k. Any ideas?

[disneysteve]

How is the money invested?

[FLA]

this is bad, I don't even know anymore because it has changed hands 3 times in the 2 yrs since I left. It used to be in bonds. I'll call them tomorrow and find out.

[~bs]

is that the lump sum value of the pension? If you stop contributing to it, it should either stay the same or go up slightly if there's an inflation calculation.

[97guns]

So many pensions out there are in the red, robbing peter to pay Paul, much resemblance to a ponzi scheme

[FLA]

that is the lump sum value of the pension. I have not heard of our company having trouble meeting the pensions but who knows what's going on behind the scenes.

[~bs]

that's weird. not possible unless part of the calculation changed. It could be due to actuarial estimate changes or benefit changes. I'd guess if the actuary estimates that the average life expectancy shortens (less years to pay) or the inflation adjustment would be less, then the lump sum value would decrease.

[FLA]

I called, the woman I spoke with had it wrong. It went from 46k to 55.5k. Phew, I'm glad they were wrong. I'm thinking of asking the judge about paying for college to accept this lump sum in lieu of me paying 100k on a salary that cannot support that.

[disneysteve]

I called, the woman I spoke with had it wrong. It went from 46k to 55.5k. Phew, I'm glad they were wrong. I'm thinking of asking the judge about paying for college to accept this lump sum in lieu of me paying 100k on a salary that cannot support that.

Glad the numbers were off. Interesting idea about the college payment. There's clearly no way you can pay 100K so they need to come to some kind of agreement for a number that you can actually meet.

[~bs]

46k to 55k is a pretty big jump, that's far above 3%

[FLA]

yeah, I know, but I'm not complaining. Maybe it's set up so we get at least 3% and if the market does better, we benefit?

[FLA]

I know but I'm not complaining. Maybe the terms have changed with each company that runs it and I just didn't know.

[kv968]

The lump sum will also fluctuate with interest rate changes since it's derived from the present value of the future annuity payments. The higher the interest rate the less your lump sum will and vice versa.