Early retirement Buyouts

[Earthshine]

I have been with Ford over twenty years and am in my 40s. 

I see the recent VIP offers are for those of retirement age. I’m wondering at what age and years of service are people typically offered a package to leave early? . 
 

Also what are the major milestones for a pension? Are there bend points like with SS? 

[paintguy]

As a retired salary employee, some experience with this. In the past full retirement required a total of 85 points (total of years of service and age). If your service date is before a certain date (2002?) you are eligible for benefits until age 65. This used to be inexpensive, but is up over $200/month this year. Still cheap compared to Obamacare or COBRA. Usually the packages start with employees over 50 years of age. When you are eligible the email comes to you. I took the phased retirement. Other organizations were eligible for a richer package. Usually by organization with need to "right size". Ford does change policies over time. Read through the stuff on HR online. For me, what I got was a good deal, even if others got more. If you are in an organization targeted for cuts, tread carefully. If you are well regarded, say in a high demand specialty, could end up with a counteroffer or being denied the package. 

[Decker]

Bend points or a Ford pension have requirements to receive full monthly payments. 
If you are hourly in the Ford system you being 40ish will put you in line for an age penalty or as it’s stated reduced benefits. There is not contractual language that allows for a full pension benefit prior to age 62. 
It would take me a few minutes to give specific percentages but off the top of this old head I’m thinking you’d be reduced by 25 or 26 percent of your monthly income benefit. No matter how many years invested in the pension. If you are thinking about taking an incentive to sign on the dotted line be very careful and realize that 30 years in vested only gives full benefits at age 62. Good luck and get everything you can in the way of information. 

Edited October 25, 2020 by Decker

[Earthshine]

Thank you @paintguy and @Decker

thats really helpful

 

I am salary and started at Ford in 2000 and that’s when I started GRP also. 

 

How did you calculate the 25 percent? From doing projections and then taking a percent base on separation date vs full retirement date? 
 

For those not planning to stay 30 years (or don’t get an offer) seems the health benefit is not available, correct? 
 

seems like the FRP (That became available for those hired after 2004) is actually a better benefit, unless I’m missing something?
 

I don’t fully understand how much ford pays into our pension but understand that we can’t access it until we’re retirement age. I assume if I leave in my 40s, I’d be eligible at 55? 

[Decker]

I was referring to the hourly master agreement language. This part of the hourly contract is never really discussed much at all. As for the salaried contracts I`m not familiar with all the different agreements that Ford has in place. Paint Guy may be able to give some good insights on the salaried benefits. 

 

The 25% is reduced at the time of separation and is based on the age of the individual requesting the benefit. There is a chart in the master agreement that shows a graduated scale of benefit reductions. To a large number who didn`t ask or understood there was another eye opener at age 62. First the full pension benefit does not kick back in at age 62. Then the bridge benefit that is sold as a helping income till a person applies for SS just stops at age 62. The bridge benefits in most cases is equal or very close to the pension age reduction.  Reduce a benefit then give an income benefit called a bridge for about the same percentage can be seen as a masking of the long term benefit. Then as so many people do when the first month of pension benefit shows this reduction people jump to sign up for SS. Then there`s a SS reduction that is another eye opener, yep start SS benefits at 62 and yes another age reduction. In my case it is another 20 to 25 percent of the monthly SS benefit.   

 

Doing the projections on the reductions in income over the average male life span, all I will say is its a very large loss of income. The loss in income is something that will never be recouped. Yes my statements are based on separation date plus age of beneficiary, against full pension and SS benefits without age penalties.  

 

I hope the situations you have to look at are clearer than the hourly benefits are. Bridge benefit is income but it masks the loss of income that many have no idea are going to kick in place with their age, hopefully you can work around any loss. 

 

 

Edited October 26, 2020 by Decker

[paintguy]

I was less than 30 years with Ford, under 65, and received health benefits. Health Benefits are not guaranteed, and certainly employee contribution has increased. Know a couple of hourly who did 30 and out before age 50. Decker is right as usual. For salary, know a few who left before 50 who are pension "eligible" but only when they reach an age milestone. A lot of lengthy sections of HR online on "when employment ends" or "when you retire". Some modification of rules are allowed and if you participate in the contributory retirement, those rules are also not carved in stone until you sign for retirement. 

[paintguy]

One other thought... There was a pension calculator in HR online. With it you could enter a number of variables including intended date of departure, date you take the pension and options based on payout type, (Lump sum, with or without surviving spouse). Takes into account your age, spouse age, and so on. Can run several scenarios. Calculations it provided essentially nailed the final dollar amounts when I took pension.

[Ididntdoit]

take the money and run ?