Pensions

lee1 · Mar 25, 2003

I guess NO ONE out there has a defined pension to explain to us????

llg, PhD, RN · Mar 25, 2003

OK -- I'll bite. I used to work for a hospital with a defined pension -- for 5.5 years of service, I received a pension that was worth approximately $4,000 when I left at age 36 back in 1991. Of course, I have no choices about what to do with those pension funds, so they are still at that hospital, totally out of my control. At age 55, I will be allowed to take control of them and I will roll them over into my IRA.

The hospital I worked for with a defined pension plan, you had to work there for 5 years to get vested. That means that if you leave before 5 years, you get nothing for your 4.5 years or whatever.

I prefer a 403B or 401K because there is usually less vesting time. The money they contribute is usually yours to keep either immediately or after a very short time.

Another reason I don't like most defined benefit plans is that many companies base your benefits on a formula that weighs your latest career years more heavily than your earlier ones. For example: they might base your payments on your "highest five years of salary out of the last 10 years you worked for them." As many nurses (if not most) prefer to work part time in their later career years, their pensions payouts are based on those years when they may have been working the least. The fact that the nurse worked full time when she was younger is ignored.

Finally, if the company/hospital is purchased by another or goes bankrupt or something, your pension is endangered. I prefer to have the money in my hands, where I can choose to invest it safely.

Just my $.02,

llg

Going80INA55 · Mar 25, 2003

Yep, I would have to agree with llg. I prefer the 401 or 403 over a pension. I like to have control over my money.

When I worked bedside I had a pension. They would contribute 2-3% of my pay per yr. I could not contribute anything. We were vested after 5 years, not 4 1/2 or 4 3/4...must be at least 5. We had no options on where the money was to be placed.

Another thing about nurses in general we change jobs a lot. Statistically we change jobs Q 2 years.

The pension you could not take with you but whatever you have put in the 401 as well as what had vested is yours when you move along.

lee1 · Apr 6, 2003

How about does anyone have a pension that was recently started?? We are asking for this in our upcoming union contract negotiation. Now, I have 18 years longevity at this hospital. Would my pension vesting period start from 0 or I be automatically vested due to my length of service???