Jump to content

Lump Sum Problems


Guest wgfbackdraft
 Share

Recommended Posts

Guest wgfbackdraft

I would like to know any information on financial problems caused to any Defined Benefit Public pension funds because a lump sum payment was put into the plan?

Link to comment
Share on other sites

Guest CVCalhoun

I haven't seen a lot of information on problems caused to public plans themselves by instituting a lump sum option. The two contexts in which I have seen them causing problems are (a) in private plans, which have a very limited ability to modify the interest rate used to calculate the lump sum option, and (B) for employees, who may spend the lump sum and then have no resources for retirement. It is my understanding that at least one state considered the second problem sufficiently likely to be a drain on its welfare system that it instituted a lump sum option only for those retirees who became residents of other states.

---------------

Employee benefits legal resource site

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...