1,000 salaried Ford workers retire after pension warning from automaker

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A businessman, standing while holding a briefcase, looks up at a chart on a wall that indicates interest rates are rising.

 Retirement-eligible salaried employees at Ford were warned  and advised about retiring this year to maximize a lump sum pension payment.

The company confirmed Wednesday that approximately 1,000 employees elected to retire by the Dec. 1 deadline.

“You have sown much, and bring in little; You eat, but do not have enough;
You drink, but you are not filled with drink; You clothe yourselves, but no one is warm; And he who earns wages, Earns wages to put into a bag with holes.” Haggai 1:6

1,000 salaried Ford workers retire after pension warning from automaker

“If you are considering retiring and choosing the lump sum option, it is important to understand the impact of higher interest rates on your individual lump sum amount, should you retire after Dec. 1, 2022,” read the Ford memo, which also included a brief survey to help the company plan for employee retirements.

The warning – sent to employees in an email in September with the subject line “Important Information Regarding Your Pension” – specifically pointed out that anyone who is considering retiring and opting for a lump sum payment needs to look at the numbers.

Rising interest rates in 2022 will trigger a significant drop in the potential payout for those who choose the lump sum pension option next year.

The lump sum for 2023, according to the Ford memo, would decrease by an estimated 20% to 25% relative to the lump sum values that Ford employees would get if they took it in 2022.

For example, if someone is looking at a $500,000 lump sum payout in 2022, the loss in 2023 could be in the range of $100,000 to $125,000.

Thanks to Leo