Pensions - What Should I Do ?

Nocita Carter asked:


That’s a good question, do you know whether or not your pension plan is stable, and if so will it remain that way? Well, if you’re part of your employers pension plan, you should find out the answers to these questions. Once you find out, stay informed about your pension plan.

You say you know you have a pension plan but really don’t know what this is. A pension plan is a retirement account that your employer contributes funds as part of your future retirement. The amount paid to your retirement fund by your employer is based on the number of years you have worked and the amount of income you have earned.

How long will it take for me to become eligible for my employer’s pension plan? It is normally between 3-5 years that you become eligible for the plan offered by your employer.

What if I no longer work for the employer after I become eligible will I still be vested? Yes.

I hear some employers have terminated their pension plans, why is this? Some employers are finding it very expensive to continue with their pension plans due to: increased number of retirees, low interest rates and instability of the stock market.

My employer is terminating our pension plan, how will this affect me? The government agency Pension Benefit Guaraty Corporation will pick up pension payments when the employer defaults. Note, this agency pays a certain amount of your pension benefits on an annual basis. Unfortunately in most cases you will receive less for your annual pension amount then you would normally have received via your employer.

Is there any way to know if my employer’s pension plan is in trouble? If your company is showing signs of financial trouble, normally the first thing to go is the pension plan. If you are trying to find out if your employer may be headed for financial trouble consider checking the following: financial news information on your company, newspaper financial section, stock market, business financial magazines and the internet.

I just recently found out that an employer I worked for a few years ago just went out of business. How would I find out about the status of my pension plan that I had with this employer, I’ve been unable to contact them directly? If your past or former employer defaulted on it’s pension plan, check the Pension Benefit Guaraty Corporation website at www.pbgc.gov to see if this program has taken over the handling of your former employer’s plan.

Stay on top of your pension plan, by keeping yourself informed of your plan’s current status. This is important because your pension is part of your retirement for your future! If you don’t stay informed about your pension, you may loose valuable funds that are important for your future retirement funds.



Kaylee

vinx98 asked:


i am considering a career in pensions sales, I was wondering what sort of billing figures I need to be successful and what sort of numbers would be required to be top biller? Sorry if the question is really specific, but would like to know!
please dont waste time by asking a question to answer mine, please only answer if you know the answer!

Angelina

Steve C asked:


Millions and millions are beginning to find out that the pensions they worked for all their lives have just vanished! Under current law, if the employer goes out of business there is no recourse; if the union mishandles the pension funds there is no recourse; if the stock market takes a dive and pension funds are lost there is no recourse. American is aging; by 2020 over half the population will be over 65 years of age. Yet we allow the pensions of America’s workers to be placed in jeopardy. This makes no sense to me at all. The current set of laws allows employers and unions to play a shall game with pension funds. The employer gets a tax deduction merely for “earmarking” pension funds without having to actually part with the cash.

I think it’s time this country treated pension funds as employment taxes and had employers make deposits in to secure trusts, insured by part of the earnings. No more of this paying in to the union pension fund!

Antonio

misterjohnnyfever asked:


mainly interested in football, baseball, basketball here - thanks!
yeah OJ was found not guilty (?!?!) so I guess that would be unlwaful to take his pension away

but then again so would be murdering your wife!
what is a stakeholder pension?

John

Mike B asked:


My mother is collecting my fathers pension and medical benefits my father earned while working for and retireing from General Motors. IF the fold, file bankrupcy or are sold will she loose everything? Is there any way to secure these benefits agaist GM’s miss managment?

Diego

Chi Guy asked:


…due to the bailout?

Not to mention their $440,000 AIG spa treatments.

Dylan

Maggie Beetz asked:


The Pension Protection Act, signed into law on August 17, 2006, is designed to address the nation-wide problem of under-funded pension plans. The law penalizes noncompliant companies and encourages employee contributions, but many of the changes directly impact taxpayers of all ages, regardless of retirement status.

“Taxpayers will benefit from many of the act’s provisions, some of which come in the form of tax breaks, but individuals cannot take full advantage of the tax breaks until the new laws are fully understood,” said Michael Smith, Managing Authorized Taxpayer Representative at tax services firm FSI Tax Corp. (www.fsitax.com).

The following is a rundown of the most important tax code changes and how they will likely affect taxpayers, as well as retirees.

1. Direct IRA Tax Return Deposits

Taxpayers can now have their tax returns deposited directly into their IRA accounts. The IRS already offers taxpayers the option to automatically deposit returns into checking and saving accounts. By adding IRA accounts, legislators hope taxpayers will contribute more funds toward their retirement accounts.

2. 529 College Savings Plans

Many temporary tax laws enacted by the 2001 tax cuts were made permanent by the Pension Protection Act. This includes the ability to make withdrawals from 529 college savings plans without suffering tax penalties.

“Tax-free college savings withdrawals may seem inappropriate in a pension law, but this provision is welcomed by parents who would otherwise resort to tapping their IRAs to fund their children’s education,” said Smith.

3. Saver’s Credit

Another 2001 tax break that was set to expire this year is the Saver’s Credit, a tax credit matching up to $2,000 for lower-income workers who put money into their retirement accounts. This tax break benefits workers who earn less than $25,000 because pre-tax contributions lower the taxpayer’s reportable income and the Saver’s Credit provides additional tax relief with its matching funds.

4. Increased Contribution Levels

In 2001, the IRS temporarily raised employee-sponsored retirement plan contribution levels from $2,000 to $4,000 this year, $5,000 in 2008 and then adjusted by inflation. The higher limits were set to expire in 2010, but the act made them a permanent increase.

This change, also intended to encourage increased contribution amounts, applies to 401(k)s, IRAs, 403(b)s, 457s and catch-up contributions for workers aged 50 and older.

5. Direct Rollovers from a 401(k) to a Roth IRA

Employees who move from one workplace to another were previously permitted to transfer their 401(k)s to traditional IRAs, both of which require taxes to be paid once money is withdrawn. Only then was the individual allowed to transfer the account into a Roth IRA.

The law now permits former employees to transfer their employer-funded retirement accounts directly into a Roth IRA, a popular option due to the fact that contributions are made after taxes are taken from earnings, which means that there are no taxes due upon withdrawing funds.

“The tax code changes enacted by the Pension law benefit taxpayers and steer them toward contributing to their own retirements,” explained Smith. “While companies should be held accountable for funding employee pensions, each taxpayer should take advantage of changes that make it easier to ensure a secure retirement.”

Tax Deductions for Charitable Giving

Non-pension-related tax code changes include several provisions that significantly increase charitable giving regulations, some of which are unlikely to please donors.

5. Documenting Items

To discourage taxpayers from inflating the value of non-monetary charitable donations for inflated tax deductions, the IRS now requires taxpayers to fill out a form detailing the gifts. Additionally, any significant household item, valued at more than $500, must be appraised before the taxpayer can take a deduction.

Many charitable organizations, including Goodwill Industries International, say the new provisions will guard against worthless donations more suitable for the trash bins, but critics argue that increased regulation will discourage would-be donors and cause a decrease in charitable giving.

6. Documenting Monetary Gifts

Monetary donations will also require documentation. Regardless of the amount, a taxpayer should retain proof of any donation. Appropriate documentation can be a bank record, canceled check, credit card statement or receipt from the charity.

“These records are not required to be included in the tax return but they should be kept on hand should the IRS request proof,” advised Smith.

7. Direct Donations from IRAs for Seniors

Another tax law that many charities support affects only seniors. For the next two years, donors 70 ½ or older will be able to donate to charities directly from their IRAs, an accommodation that keeps the donated amount tax-free and avoids tax penalties for early withdrawals.

This provision benefits eligible taxpayers who take the standard deduction, which many older filers do because they receive larger standard deductions. This can also benefit individuals facing donation limits. Generally, people cannot donate more that 50 percent of their incomes, but the money does not count as income when it comes directly from the IRA.

Officials at charities such as United Way claim that despite being temporary, this provision will likely bring in tens of millions of dollars.

Other Pension Provisions

8. Automatic 401(k) Sign Up

Employers are allowed to automatically sign up employees for a 401(k). This change encourages participation from people who may not otherwise bother to sign up for the plan in the first place, though they will have the option to opt out.

9. Investment Advice

Because employees often choose safer investments for their 401(k)s, which generally result in modest returns, the act allows them to receive investment planning advice to encourage riskier investments with the potential for higher returns. The act also provides protection against dishonest advisers who steer employees toward decisions that could increase their own profit.

10. Non-Spousal Benefits

Two provisions that expand allowable withdrawals are pleasing gay rights activists. The non-spousal rollover lets retirement account assets be transferred to a designated beneficiary upon the retiree’s death and the hardship distribution allows retirement account assets be used for a medical or financial emergency of a beneficiary other than a spouse or a dependent.

The majority of the Pension Protection Act aims to ensure that companies fully fund traditional pension plans over a seven-year period, starting in 2008. But many provisions promote increased individual employee participation in retirement planning.

Smith said that while the new law expands allowances and makes it easier for individuals to increase retirement savings, it may be a step toward employee-funded retirement plans - a move that has many critics concerned.



Anthony

Eric L asked:


I am a mortgage broker in California and I am looking for a lender who will allow borrowers to state their income for pensions?

Joseph