Susan,

Sorry to hear about your situation. I will say this, there are more options available these days that allows them to have a diversified portfolio without having to pay high fees. Just set up your LIRA with a robo advisor and forget about it. You’re good!

AC,

Generally speaking, if it’s a DB plan, you’re going to come out ahead. Since it’s a DB plan for a major health network, it likely isn’t underfunded. I’m sure the information about how much money the pension has and what they’re invested in is available publicly.

To be honest, I never fully understood the formula for my DB plan, but I knew it was guaranteed money and it was basically free money. Now looking at my decision to cash out when I left the company, it was the right thing to join. I just wish I did it earlier.

Barry,

Yes that’s right, the employer matches 1% more than what I contribute. But it’s one of those plans where I don’t know how much I’ll get back in retirement because they use complicated formulas and numbers, such as the number of years of pensionable service.

That would be a great idea! This topic seems to be rarely covered by finance bloggers, so such a post would definitely set you apart from all the others!

AC,

If I’m reading this correctly, The AHS DC plan will match you 11% for every 10% of your pay you contribute. That’s an instant guaranteed return of 11% and it doesn’t factor any gains that you would make on that 21%. In my opinion, you should ALWAYS max out any employer incentives as it’s literally free money.

My biggest mistake was not joining my pension plan earlier. I assumed that since I was making regular contributions to my RRSP, I didn’t need to join the pension plan. At the time, I had no idea what a pension was. When someone finally explained it to me, I signed up right away.

For content, I had about 8 years of service in my pension. However, I was with the company for double that time. It’s possible that my payout would have been close to $250K had I joined from the start. Sure, my RRSP account would have been smaller due to my pension adjustment, but I could have diverted any extra cash to other goals such as my home down payment.

I do think I need to write a post about DB and DC pension plans that really explain the advantages of joining. I’ve covered the subject in the past, but not with any real numbers.

I also think that there’s a risk of doing nothing if the company’s outlook isn’t generally that good. A lot of people such as myself don’t realize pension funds can be underfunded.

Another advantage with commuting the pension is it allows you to pass some money to your kids provided that you invested wisely.