Winter wrote:
- quote -

I worked with defined benefit plans for a number of years. And while
some pension plans will allow a retiree to take the lump sum value
of their pension in cash or allow them to purchase an annuity
through an insurance company, e.g. Metropolitan, I don't know of any
pension plan that would allow a retiree to sell the stream of payments
he was actually receiving from the pension trust fund and pay them to
a third party. There would be issues with the guaranteed joint and
survivor option for the spouse. The pension plan would be counting
on the return on mortality in its funding of the plan, etc. I believe
there is even a statement in the plan documents that the funds cannot
be assigned to someone else. The plan may risk being disqualified
and lose its tax deductible status for assigning payments.

I can only see this "sale" happening if the retirement plan actually
allowed the retiree to take the lump sum directly to do whatever
the retiree wanted to do with it. And then there is no need for a
"sale".

If the retiree can only get an annuity paid from the pension plan
assets, the only way the retiree could "sell" it would be to endorse
the checks that are made payable to him every month to the person
he sold it to. The plan isn't going to write out the checks to anyone
else.

Now an annuity puchased from an insurance company might be able to be
sold, just like a life insurance policy can be "sold"(a viatical).

But a stream of payments from a pension trust fund, that doesn't sound
right......

Frank

Winter wrote:
- quote -

I would suggest that he take the annuity and then borrow money to be
paid off with the annuity payments.

--
Ron

I do beleive that I did answer the initial question. The way it was framed, there IS NO PAYMENT FLOW
at this time. The worker has to make an election to receive that payment flow [at] 55. Once the
payments start, then the Annuitant (former worker) would, permitting that the Pension Program does
NOT prohibit it, have the opportunity to "sell" that flow of payments to another party (generaly for
less than it is worth, since they must realize a profit).
Cal Lester CLU



bo peep wrote:
- quote -

It looks like nobody has actually *answered* your question...

Here are some companies that will purchase your friend's payment flow
in exchange for a single lump sum payment:

http://www.askburris.com/cgi-bin/sma...ed+settlements

John Cowart

- quote -

100% correct. There might also be an option available that would provide
for that income flow for a specific number of years (asy 20 yrs), so that
if he died PRIOR to the end of the 20 years, the flow would continue
to his heirs for the "balance".


- quote -


Not illegal at all, and there probably IS a market. I was simply stateing that
he did NOT have the right to sell UNTIL he made the decision to annuitize.
Once thta is done (right or wrong) he could then look for a market.


- quote -

already answered...
Cal Lester CLU

- quote -

Okay thanks. I accept your answer but am trying to understand it a
little more. At age 55, if he accepts the lifetime annuity the monthly
payments commence at age 55. So there is a "guaranteed" flow of monthly
income subject to the risk of the person dying which a purchaser would
need to weigh along with the upside risk of the person living to be a
100.

Are you saying that it is not legal to sell through reassignment this
future flow of income or simply that there is no secondary market for
it?
Once the person is receiving the income (it has been annuitized) what
is the practical difference between "not having an income at age 55"
versus being "eligible for one."

Thank you again.

Winter

Winter wrote:
- quote -

I believe that the proper answer would be a resounding NO.
He does NOT have an income at age 55, he is eligible for one.
If he elects to NOT receive that income at 55, then apparently
one of his options at age 65 might be Lump Sum.

There is nothing that he HAS at this time that he can sell
(legitimately that is). He might go onto E-Bay, and see if
the people that bought the cheese sandwich would like to buy itCal Lester CLU

Winter wrote:
- quote -

To state the obvious, annuities in general good assets to own because
one cannot outlive them. Why does your friend need the lump sum? If he
really must have it, can he borrow money (perhaps through a second
mortgage) and use the annuity to make the payments? I think there is a
secondary market in annuities, but the purchasing company will expect
to make a profit, meaning that your friend will probably not be getting
actuarial "fair value" for the annuity. He is more likely to negotiate
a fair mortgage interest rate, since it is a highly competitive market.

I think there have been cases where retired military personnel have
sold their pension benefits at very low prices -- see
http://credit.about.com/library/weekly/aa111000a.htm .

I have a friend who is eligible for a monthly lifetime annuity at age
55 as part of retirement from a company. However, he is told that he
cannot take it in lumpsum until age 65. Is there any mechanism or
market for selling the rights to this monthly income in return for a
lump sum. Is this something that is done?

Thank you.

Winter