Thursday, September 21, 2006
Scripture Comes to Life in a Pension Plan!
Todd and I spent two days at a financial planning seminar and God jumped out of an actuary table! Not literally, of course. But here’s what happened:
Somewhere between how to plan for college and how to pay for your funeral, there was a section on “pensions.” There’s a little “twist” for men or women who have, ahem, a much younger spouse. I know I run the risk of getting clobbered for this post. But I found it rather interesting… and we're talking actuary facts… so here we go:
For some pension plans, the amount of money you and your spouse draw in retirement is based in part upon “mortality” tables that predict, on average, how long people will live. In pension disbursements, a retiree and his/her spouse will get a certain amount of company-paid money every month. The amount of this money is determined by a number of factors, including age of the retiree and his/her spouse. Take the case of two couples. One couple is close in age. Say a 60-year-old retiree has a 59-year-old spouse. The other couple has more of a spread. Say a 60-year-old retiree has a 40 year-old spouse. Who gets more money each month? Couple number one! Why? Because the company makes the assumption, based upon mortality statistics, that the 40-year-old will live longer and require extended pension funding. So the younger the spouse, the less the monthly pension money!
“May your fountain be blessed, and may you rejoice in the wife of your youth.” Proverbs 5:18
How's that for some practical application of scriptural truth!
(Photo by Planetina, see flickr.com for restrictions)