On Mon, 6 Dec 2004 10:32:33 CST, beliavsky[at]aol.com wrote:

- quote -

Like anything else, this could be good or bad, depending on the
assumptions used by each person who runs the numbers.

For example, under most defined benefit plans the monthly check varies
with income and years of service. There are other factors (early
retirement reductions, survivor choices, etc.) but income and service
credits dominate the calculations.

Anyway, it seems that early partial retirement (or whatever it is
called) would require a freezing of years of service so as to
calculate the benefit. So in effect a person is reducing their
lifetime annuity (they will have less years of service.) So it's a
tradeoff - money early versus money later.

Again, whether that is good or bad for a particular person will vary
with the assumptions used.


-HW "Skip" Weldon
Columbia, SC

I read an article "Gliding into the Golden Years" by Ellen Hoffman in
the 12/3/2004 issue of Business Week that could be relevant to people
covered by defined benefit pension plans considering retirement. I
believe the rules have not been finalized. Quoting part of the article:

"New rules proposed by the IRS will likely make it easier for those
with traditional pensions to gradually reduce their working weeks

....

Here's a basic outline of how the system would work under the proposed
rule. An employer would be allowed to set up a plan for employees who
want to take phased retirement. Participation would be voluntary; to
participate, the employee would have to be at least 59½ years old and
currently a full-time worker.

The employee would have to reduce his or her hours by at least 20% and
would receive a prorated amount of the pension -- in regular payments,
not a lump sum -- while working the reduced schedule. For example, if
hours were reduced by 30%, the employee would be able to collect up to
30% of his pension while still working."