Conference 7.286::digital

    Yes-
    
    That would be nice.
    
    Maybe even someone could write a program to do this that we could
    access from VTX, kinda like DLN.

    It was suggested to me that it might be inappropriate to mention a
    specific name in this note.  With this in mind, I am reentering the
    base note with a generic substitution made for the person's name.
    
================================================================================
Note 865.0                Pension lump sum calculation?                  1 reply
MEMORY::BERKSON "What do they make scratch from?"     7 lines  17-JUL-1989 11:37
--------------------------------------------------------------------------------
    Would someone be able to direct me to a person who would be able to
    calculate the present value of my retirement benefit?  The person
    in Corporate, to whom I was directed by my PSA, is too busy to use my 
    age and the interest rate to look up the necessary figure in the
    actuarial table.  Thanks.
    
       Mitch

    
    I doubt there is any formula to calculate it.
    Not until you actual retire, they can't tell you the true
    value of your pension.  Especially the pension fund has been
    losing money in the last year.  Anybody can do it better by
    putting it in the bank saving account.

    re .3
    
    I doubt there ISN'T a formula. They cash your pension out if you're
    vested and your present value is under $3500 and you leave the
    company.
    
    There are vested people who leave Digital all the time. Personnel
    must certainly have access to a formula.

    I believe the pension contribution is 1/2 of 1% . Don't know if
    this is figured at the end of every year, half or quarter.
    
    If it were one year, and salary was as follows :
    
    year 1   10000 x .005  = $50
      "  2   14000 x .005  = $70
      "  3   18000 x .005  = $90
      "  4   26000 x .005  = $130
      "  5   30000 x .005  = $150
    -----------------------------
    total pension accrued  = $490
    
    Multiplied by the percent vested gives cash payment

There certainly is a formula and there is a NEW piece of software
that will one day be available to all PSA to enable them to run a
projection on your particular case.

Having just been thru a pre-retirement seminar, we were privy to be
used as Test subjects on this software and I was given 3 variations
depending on whether I retired at 55, 62 or 65.

I'm sure the package is close to completion and should be released
thrughout the Corporation soon.

The folks at PK3 do have it already.

Lloyd

    RE.5 It figures - I no sooner answer, then pick up the new
    DTW - the one with details of the new pension plan.
    
    As of this year, your pension contribution will be 1.5 %
    of annual salary. Contribution for previous years service will
    be calculated at 1.5% x (average salary of last 5 years) 
    x (# of years service)
    
    if your salary for the last five years was 10k,14k,18k,25k,
    & 30k, the average is 19.4k . 19,400 x .015 x 5 = $1455.
    
    Also, you are now 100% vested after 5 years.
    
    Dana

    The 1.5% is the amount of pension you will receive per year if you
    retire  at  age  65.  The  present  value  (or  lump  sum)  can be
    calculated  from  that  if you know what the assumed longevity is,
    and assumed interest costs.

--David

    
    RE: .8
    
    Those are what we like to know about -- longevity and interest.
    But interest to what?  Does DEC give you the interest to the pension
    (from now to retire)even if you quite the job now(if you don't get
    cash pension)?  Seems to me the only way DEC compensate the effect of
    inflation(to some degree) is recalculating everyone's pension using
    the last five years salary.
    
    If one quite his job, his last five years salary will stay put.

	I believe that the details of the plan have to be made public
	by law. What I suspect is that no one who knows the details
	is reading or feels like answering. There is no reason to make
	anyone read or reply here. If you haven't got the answers you
	want/need than go to personel. Don't accept "I don't know" from them
	because finding out is there job. 

				Alfred

    Ok, I admit, I have been reading these responses and haven't put
    in my 2 cents.
    
    In June you should have received a Benefits Bulletin.  Your PSA/PA
    may have additional copies.  Part # EZ-A0222-50.
    
    Basically, it speaks to the changes in the Digital Pension Plan
    effective July.
    
    The changes are in part:
    
    *  Update scheduled for July 1
                
    Digital will update the pay used to calculate your benefit, thereby
    increasing beneftis for most employees.
    
    *  Adjustment made to "grandfather" formula
    
    The grandfather formula in effect for employees hired before July
    1, 1979 will change.
    
    *  Vesting schedule accelerated
    
    Employees will now be 100% vested after five years of service.
    
    The bulletin goes on to say " Your pension benefit is calculated
    in at least two and, if you were hired before July 1, 1979, three
    different ways.  You always receive whatever formula produces the
    highest benefit."
    
    The bulletin goes on to explain the formulas along with examples
    for anyone who is inclined to do this calculation.
    
    Hope this helps.
    
    Carla
    
    

    Since there seems to be some misunderstanding about what I want, I'll
    explain further.  I've read the benefits books and understand how the
    monthly pension calculation is made.  You may notice that it also says
    that if the pension value is less than $3500 when you leave Digital, it
    is paid as a lump sum.  I'm interested in finding out what the present
    value is.  This is different than knowing how much I will be paid per
    month when I retire.
    
    This is completely deterministic and there exists a formula for
    computing it somewhere in Digital.  It will be calculated using
    actuarial tables which provide a statistic based on how long someone of
    my age is expected to live.  It will also use the current interest
    rate.  Even though interest rates vary, they are going to use whatever
    interest rate we have now - maybe with some adjustment factor.
    
    I agree that it seems unlikely that the calculation will be forthcoming
    in this forum.
    
       Mitch