I called about receiving my pension at 55. Mass Mutual told me that I could but the company was offering a full pension at 62 instead of 65 if I chose not to take it early. Why are they offering this? Is it to discourage people from taking their pension early because of cash flow issues? I thought it was a paid up annuity but maybe I'm wrong. Will ask some financial experts why they are doing this.
I'm no expert in pension accounting but I do know that there is smoothing of shortfalls. Companies don't have to take the full hit when fund assets decline in value. JCP had to take a big charge when they did the big layoffs as so many ex-employees chose to take a distribution rather than wait for retirement age. With the increase in share values I imagine the shortfalls are much smaller now.
Always tough to know what to do. I knew a 50 year old man whose company terminated the pension plan and he took the distribution. Got cancer a couple of years later and died. He made the right decision for his family to take the money even though from a tax perspective it was crazy. One just never knows.