Quote:
Originally Posted by ton80
Lump Sum Changes With PBGC Defined Rate for a defined time period usually 3 months
When I retired in 2002, my employer published what the PBGC rate will be for the next 3 month period. With some digging we verified that the HR provided Lump Sum Amount was really a Net Present Value of the retirement payments up to the actuarial expected life expectancy . This was about 83 years and 6 months in 2002. Net Present Value is a standard Application/formula in Excel and other spreadsheets.
If the rate went up the lump sum went down and you actually lost money by working the extra month even after taking credit for the one month extra salary. If the rate went down your lump sum went up.
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Thanks! I should have paid more attention during math classes!