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80% vested pension....am I losing money too?

I am reading about people with 401k plans losing money in the crisis. I have a company funded retirement plan and am vested at 80%. Am I losing money too? Or am I losing money only in the "un" vested 20%?

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  • 1 decade ago
    Favorite Answer

    It depends upon whether your pension plan is a defined benefit plan or a defined contribution plan. If it is a defined benefit plan, then no, you are not losing money because the pension benefit is determined by a formula that is typically based upon your salary, age, and years of service. The formula does not take stock market performance into account. The funding requirements of the plan are driven by the stock market, but that's your employer's concern, not yours.

    A lot of employers are getting rid of their defined benefit plans and changing to defined contribution plans as a way to shift the market risk to the employees. If you have a defined contribution plan, then you are probably losing money. That may not be a problem if you are 50 or younger because you still have plenty of time before retirement to recover.

  • Anonymous
    1 decade ago

    If you have a payment formula type pension you are not directly losing. You only risk that your employer won't fund the plan by the time you retire.

    If you have a fixed contribution plan and invest in stock, you are probably losing. If you stay to vesting your losses will be reduced by your employers contribution.

    Either way the market may recover 5-10 years from now.

  • 1 decade ago

    Vested means how long you have to work at a given company to receive 100% of what you have in your account.

    Am I losing money? Well, yes... since the market has been going down =)

    The amount... I dont know, it all depends on what funds you had your money in.

  • Gem
    Lv 7
    1 decade ago

    Vesting has to do with the amount that your employer puts into your plan and if it is yours yet, or not.

    Without viewing your plan we cannot tell you how the employer has invested the funds. Company stock? Other stocks/mutual funds? Savings?

    Not enough information, but your vesting amount has nothing to do with it.

    Do you contribute anything to the plan or is it totally employer paid?

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