Pensions sold to Prudential--announced today

Apparently, BMS has sold or transferred pension obligations for 8,000 employees and their families to Prudential, for $1.4 billion. Not sure if this is good or bad for those people.

 

Bad news, as the pensions will only be insured by individual state limits that vary starting at $100,000. The company is saving premiums paid to the Pension Benefit Guaranty Corporation. Usually, this type of action occurs for firms such as GM that go bankrupt.

 

They will do the same thing again in the future, when the retiree number climbs again. Eventually there will be a huge reduction in retirees, because people won't stay that long, which is what they want.

Good luck!

 

You're better off taking the lump sum and investing yourself, then BMS can go down the tubes for all you care.

 

Fully agree

 

I checked with a person in the pension fund industry and they said this should have no impact on anyone receiving benefits. If this is true then Prudential basically purchased the risk from BMS on these employees and will be paying out the benefits according to the plan which is a fixed benefits plan.

 

Probably safer with Pru than BMS. BMS is just part of the NEW America. Get away with whatever you can get away with. Personal integrity has no place in business. At least Prudential is subject to some regulations. Wish I had taken the lump sum. Fat girls and koosters.......hind sight is twenty twenty.

 

Has BMS made any pension lump sum buyout offers? I've been gone since 2010 but had a decade in so I'll get something when I'm old and gray. I'd rather take a payout, roll it into an IRA, and get a better rate of return than an annuity would get me.

 

If anyone takes the BMS annuity at retirement, they are idiots. Get a financial advisor before you do anything and do some homework.

 

Re: Pensions sold to Prudential--Buyer Beware

Let the Buyer Beware when it comes to moving your money out of the pension fund.The bottom line is that most financial advisors are motivated to tell you to move the money out of the Pension and here is why.

You must consider how your financial advisor makes their money. Many are paid rich commissions on the sale of financial products. This means that they are motivated to get you to move the money out of BMS and to a product they offer. Often as much as 8% of the volume. That's $40,000 on a $500,000 pension payout. Then they make money by "churning" you every few years getting you to move your funds to a different product, again generating a commission.

Others are paid a small percentage on the total volume for "managing the money." It a smaller amount but in a few years it adds up to the same amount. And again they are going to advise you to move the money out of BMS to get the annual management fees. Often they have you put the money into a mutual fund which is sucking an additional management fee off the top.

Pure brokers will get their money per transaction, so they will make their money by advising you to move it out of BMS as well, and then churning you with a better investment every so often.

So make sure your eyes are wide open and beware of who you trust!

 

Sure enough, go the letter that mine is going to Prudential. Not too worried about it, actually, as I think Prudential is about as good as you are going to get with respect to reliability of paying the pension.

With regard to the lump sum, I opted to take the pension instead, because I needed income immediately and what I got from the pension was much more than if I rolled it over to Fidelity. The reason is that Fidelity told me they would only use half of the lump sum amount to generate an income stream, and that didn't amount to much.

 

Ditto. Took the lump sum awhile ago. FIDELITY Portfolio Advisory Services has an AGE/RISK specific plan from 1-10 that will work for you. Doing $$$ better now that when working but, you do need a good $ base, Get the $ amount each year that you phone in to them. Do the homework.

 

Re: Pensions sold to Prudential--Buyer Beware

Trust that's pretty funny.

 

I finally got the straight answer - upon departure from BMS an employee can take a lump sum pension payout at any time - it's not a case where a decision has to be made during a certain date window (not all employers with traditional pension plans offer this).

 

dont think thats true. a 46 year old who leaves BMS would have payout cut in half compared to waiting to 65 for lump sum payout.

 

If you leave any time after 55 but don't collect until 60 you will see the amount is at its highest for lump sum.

 

There is no reason NOT to take the pension or roll it over if you are now eligible. BMS quit contributing to the pension years ago, so it is not going to grow.