Any Thoughts about the UC and TCP1 Pension Plans and The Decision now? It’s been about 10 years since LLNL changed management and employees were given the choice between staying with a UC pension (TCP 2) or going to the “equivalent” TCP1 pension plan. It was a difficult choice for many. Seems now that depending on the point that one was in one’s career, either option could have been a good choice. Any thoughts on TCP1 / TCP2 looking back on the decision now with 20/20 hindsight?
Comments
I went with TCP2 and have the benefit of not paying 7% after tax (10%) into the plan but also getting the 11.5% match. A 21.5% swing.
Tough choice for sure.
I retired in 2011 and promptly forgot about this stuff.
Now, getting about 100% of my last salary between TCP-1 and social security. Collected about 6 years so far, wife gets 1/2 when I breathe my last. Inflation adjusted. Well or overfunded funded. Good system.
Was a very long sometimes redundant career that perhaps could have accomplished more had I not opted mid career to forget the lure of greener pastures for the certainty of collecting my earned compensation UC deferred into the UCRS/TCP1 pension.
Very fortunate that UC had the foresight to set up this mandatory relatively inexpensive deferred compensation vehicle . (~ 12 -15% of wages deferred annually and well invested for 35'40 years will do this for anyone). I take credit for doing the maths to see the value.
Back On topic, too lazy to go back and work out the differing actual results of the two options,
December 1, 2017 at 10:08 PM
Just wait for the next crash, that is when your TCP2 will take a bit hit. Why do companies not offer pensions anymore? Simple answer:it is more expensive. Who is paying for it? the workers. I always find it interesting though, that all the CEOs still get a pension:
https://www.washingtonpost.com/news/get-there/wp/2017/10/09/platinum-pensions-rich-ceos-arent-like-you-and-me-they-get-multimillion-dollar-pensions-even-when-theyre-forced-out-of-their-jobs/?utm_term=.574065ade6ec
And BTW, what exactly has Trump done so far to help the economy?
I sure am glad that I chose TCP1, and I think December 2, 2017 at 10:01 PM is also a happy camper.
For example the lab contributes 11.5% to a senior person in TCP-2 when the person contributes 6%. If a new pension plan did this, absent previous liabilities, if would be fully funded with a very attractive payout. The key is psying it current, not letting the company write a promissary note to pay later. It's more about long term management discipline, not contribution rates.
It is true pensions are percieved as more expensive. But it is a bad rap based on LAZY or delayed contributions, that is historical errors, rather than a poor system.
Pensions even at much lower max payout rates may have a place in the future.
In my particular situation, I think my 85% pension in TCP-1 gives me more payout than the 75% payout that I would have frozen into UCRS TCP-2, plus 4 years of LLNS TCP-2 401k deferred compensation about, 45% of final salary, growing at the invested capital rate. Over the six years that have been retired, I would have likely exhausted the 401k account making up the difference in the two pension payouts.
It is not appropriate to generalize this retrospective. Each conclusion depends on the details of each particular situation.
I sincerely thank the UC financial wizards who setup UCRS early in the last
December 4, 2017 at 8:00 PM
Doing a little google search about the typical employer contributions, I found
the following website: http://www.foxbusiness.com/features/2017/07/17/u-s-companies-have-new-401-k-fix-spend-more.html
where the average contribution is shown as 4.7%, less than half of what you quote. (BTW I stopped there, that was the first one which came up)
I certainly agree with your statement about companies having to pay in and not writing some promissory notes
December 7, 2017 at 6:47 AM
I wouldn't give too much accolades to UC, especially those managing the UC pension. It has an unfunded liability of $16B. That right $16,000,000,000. Folks living off the UC pension have blinders on. That pension is near collapse.
December 9, 2017 at 8:58 PM
Ah, no not even close. Your hate for UC is starting to distort reality for you. What is wrong with you?