# pension vs annuity



## cdrvt (Sep 8, 2015)

what's the difference between pension and annuity? I currently have Pension and no annuity. Local 606 offers annuity and no pension.
Thanks


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## Voltron (Sep 14, 2012)

Might as well ask one more time.


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## 360max (Jun 10, 2011)

pensions pay until you die, annuities only pay til your annuity account runs out of money. Pensions are funded by you as you work, funded by others as you retire


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## cabletie (Feb 12, 2011)

They might not have a local pension but I thought all members receive the international pension. 

We have at least three pensions in my local.


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## don_resqcapt19 (Jul 18, 2010)

cabletie said:


> They might not have a local pension but I thought all members receive the international pension.
> 
> We have at least three pensions in my local.


There are two that everyone has. One very small one covered by part of your dues, and the NEBF that all (as far as I know) signatory contractors pay into. 

In general a pension is a defined benefit plan and an annuity is a defined contribution plan. Most are not really set up as a real annuity, they are much more like 401K.


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## LARMGUY (Aug 22, 2010)

cdrvt said:


> what's the difference between pension and annuity? I currently have Pension and no annuity. Local 606 offers annuity and no pension.
> Thanks


I know one fact about an annuity. Most are shielded from creditors in a bankruptcy.

:thumbsup:


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## LARMGUY (Aug 22, 2010)

An annuity is a pre paid savings type insurance document with a set date to annuitize or start paying out to the holder or the designee. IRA's are a type of annuity set up by the government in the 80's. Since that time they have been screwed with by legislation making them harder to accrue and making some taxable especially for advanced withdrawl. 1800 cash now with buy you annuity for a percentage and either pay you the difference immediately or in larger lump sums while they own it, it is gaining interest.


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## Powertech1957 (Sep 22, 2015)

I am a member of IBEW Local 129 Lorain, Ohio. Our local has both a Defined Contribution (Annuity) and Defined Benefit Plan (Pension) on the local level, funded by money we set aside from negotiating contracts over the years. These plans are in addition to the NEBF Pension at the International Level. If I am not mistaken both of the local plans have many ways that they can be used. Both can be taken as lump sum, taken over time, early, certain and life, spousal benefits and without; each with an adjustment to the amount of payment per period upon retirement.We took a portion of our wage increases and put them into the plans because zone dollar raise might get you 60 cents on the check, whereas one dollar going into one of our plans netted the whole dollar. The money isn't taxable until it is withdrawn, The whole amour compounds faster under normal conditions and hopefully taxed at a lower rate after your working days are behind you.


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