As advisors, increasingly you’re working with retirees who have pensions, or more commonly than you’d like to see, pensions with problems. Rick Rodgers, a CFP, and founder and CEO of Rodgers & Associates, has written a book, “The New Three-Legged Stool” that details pensions, their problems, and what advisors and consumers can do to protect their clients and themselves.
Rodgers writes that while the Pension Protection Act of 2006 “was designed to close loopholes in the pension system and addresses problems for the roughly 34 million Americans covered by traditional pensions known as defined-benefit plans,” one problem not addressed by PPA but continues to affect millions of people of all ages, not just retirees are pension miscalculations.
“Anytime you change jobs or take a lump-sum pension cash-out, you are at risk,” adds Rodgers. “Women are especially vulnerable to pension mistakes because they tend to move in and out of the workforce more often than men. For the most part, pension mix-ups aren’t intentional.”