QPSA anyone actually understand it?

T

tshephard

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Aug 10, 2018
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Location
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OK, ALCOA is offering my married wife a pre-retirement pension buyout.
(Apparently the people 'explaining' things did not even see the forms sent out!)
A QPSA (apparently a monthly reduction) is listed before the various monthly selections, including no survivor, 75, and 50% - as though it becomes a reduction in all cases for her.
Then they list the buyout, as though the QPSA reduction is part of the buyout equation.

So it lists:
A full retirement benefit $,
a early reduction benefit $ (minus a few %),
a QPSA reduction $, (say $100, seems to reduce all below),
0, 75, 50% survivor option benefit $
then the buyout $.

We trying really hard to understand, it seems like a penalty for having been married, but there have been no questions about continuity of marriage, etc to develop a cost(?).
They do seem to want to charge for it, forever (?).
I can almost understand an annuity-like 'cost' to providing a pre-retirement chance of a benefit (so as to NOT penalize singles), but then wouldn't that be a fixable cost (at actual retirement) that would eventually time out? (Like say $100 from the next 20 years' payments, then NOT reduced?)

Anyone?
 
This is not a good forum for financial advice (or medical or legal advice either).

Here is an article on QPSA that you should read and understand before you do anything:
Qualified Pre-Retirement Survivor Annuity (QPSA)

A pension buyout offer is rarely a good deal for the retiree or pre-retiree and if you are in good health I would just take the pension. You really ought to speak with a financial planner who specializes in retirement though because it all depends on the terms they offer and your situation. You need professional advice.
 
I am NOT seeking financial advice - we can run the numbers, time values, etc, - already have done so.

I am seeking an expert in a particular field (such as show up here all the time) as all QPSA searches define the same (as above), not supply details of calculations - especially allowable reductions.
 
In a sense it is financial advice and the decision you make today you will have to live with.

Firstly, I’m not a fan of annuities but that is what many 401k plans do. They are moneymakers for the underlying company. I assume these are all your options? Is this a 401k plan or a pension? Can it be rolled over into another account with you having control?

The company may be giving you all their options but those may not be all your options. Since these situations get complicated I would seek out a independent advisor who could help decipher this and spell out all your options.
 
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