Joe Occhipinti
Wealth Advisor
Warren Street Wealth Advisors

September is the most important month of the year for grandfathered pension plan holders at Southern California Edison.

To catch up on previous Rate Watch articles, you can find them here:

Rate Watch – April
Rate Watch – May
Rate Watch – June
Rate Watch – July

For grandfathered pension holders considering retirement, August is a pivotal month because Edison uses the minimum present value third segment rate to update the pension rate into the new year.

Let’s take a look at what the rates look like now:

Month-to-month provides very little change from 4.37 to 4.36. However, the real comparison needs to be made from August 2016 to August 2017. The current rate for the grandfathered pension is 4.18 (August 2016), and we would expect Edison to continue using the August rate to announce 4.36 as the rate for 2018.

Those who are grandfathered will see a decrease in their lump sum value should they retire in 2018. The one variable would be if you continued to work through a part of 2018, then you would continue to accumulate pension credits by working.

Employees who are on the fence about retirement should be taking note. If you were considering retirement in late 2017 or early 2018, then it may be in your best interest to retire in 2017 to receive a larger lump sum pay out.

As always, this should not be the only factor when considering retirement, but it can play a part in retirement planning and timing.

If you have questions on retirement planning with your grandfathered pension, then contact us for a free consultation. We have helped 100’s of SCE employees navigate their pension and retire with confidence.

---

*These are not current plan rates for Southern California Edison’s pension plan, they are minimum present value third segment rates from the IRS. Official plan rates are derived from the minimum present value segment rates table. Plan rate changes are made by Southern California Edison on an annual basis.

Joe Occhipinti is an Investment Advisor Representative of Warren Street Wealth Advisors, a Registered Investment Advisor. The information posted here represents his opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional.  Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.