We got some potentially great news from the "fine print" of D's full time job information booklet. I say potentially because D cannot access that part of the employee computer system until his 3 month probation ends in mid Nov.
The news is in regard to his pension. We were under the impression that he is taking part in an defined contribution plan whereby his work will pay a percentage of pay into an investment account and he would contribute a percentage as well ie. 6 and 6.
But the fine print is saying he is now a part of a defined benefit plan whereby the pension is determined by a formula that takes into consideration number of years worked, maximum salary years and some other factor.
This is the type of pension everyone wants to get. It is what I consider to be a real pension. The kind that teachers, public servants, police officers etc. get.
I'm still in shock. D doesn't think his pension will be as good as a police officer's but I say anything will help and once confirmed, it will change the amount we have to put away for retirement. This has the potential of freeing up a lot of our cash flow.
What we have planned when the mortgages are paid off in a couple of years was to kick into heavy retirement savings gear. If we can pare down the amount we have to save by 30 - 40%, heck, even 20%, that changes our world significantly. Fingers are crossed for good news.
That is good news, but I wouldn't bank on it. The growing trend has been for companies to reduce benefits, freeze plans or rid themselves of pensions entirely. Probably safer to assume it's not going to be available, and if it manages to survive until the day your husband starts to draw from it, then you get a little bonus.
ReplyDelete@ The Executioner;
ReplyDeleteThat is prudent advice indeed.
Even teachers' pensions (who in Canada are known to have one of the most powerful pension programs)have taken a big hit with the economy drop of recent years.
I can't help dreaming of the possibilities though. It's almost like winning a lottery... :)