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The partner pension plans won’t likely collapse but they will very likely restructure. Some of the big 4 are already moving to have them be funded. This will ultimately present itself as lower unit values and lower benefits on the back end. This is nothing new. They have already restructured several times since I was an analyst. A lot of the posts I see here on how huge partner pensions are harken back to a different era. Most of us are already socking away in 401Ks and IRAs because the pension alone won’t cover our full retirement. The way I look at it though is most industries have eliminated pensions so bonus for us for still having one!
@pwc, the modified partner retirement plan isn't disclosed to staff and it's 100% unfunded.
No
The house of cards will crumble
^where can you find that?
Oh, those don’t tell you anything.
Principal 1, how do you think someone pre-partner with 10-15 years of work plus 10-20 years of retirement views these facts. The pension is “unfunded,” therefore it gets paid out based on the current firms performance ie part of the profit you create is paid out to retired partners. As the pyramid grows, it becomes more and more difficult to meet these obligations without robust business growth. the firms have a few levers. Pay for it with more of firm profits (ie partners keep less and less of what they bring in), reduce and/or get rid of the pension, start clamping down on short term fixes that risk destroying morale — cutting costs, laying off partners who are short of the pension plan etc. And we can’t pay for it with debt like the govt. Also, pensions worked in a time where there was a premise of loyalty between the firm and its employees. It’s a safety net, right? But I don’t believe for a second that I’ll last beyond a 6 month rough patch of sales. The pension carrot looks more like a unicorn to most of us trying project it’s sustainability 20-30 years out and make a decision about where to place our proverbial career bets. This is a serious question and I would love to hear the counter point!
So, for a long time, I've viewed (and some of our leaders have said) that the pension is the differences between retiring well and retiring very well. For me, I'm considering if it is worth the wait but I've also had the fortune to sock away a good deal in our other plans and cash out a bit. So, I'm inclined at this point to not wait on the pension, move to industry and take the equity. It's a gamble for sure but having more control of the funds and being able to take some off the table from time to time is starting to look better and better.
Now, with that said, I love my firm and would do anything for it. I'm privileged to be a part of it and to have had the opportunity to see the world from the seat I currently sit in. But...Sometimes you gotta know when to hold 'em and when to fold 'em... I'm thinking it might be time to...
The pension plan disclosure required by law is enlightening and it seems Deloitte's is well-funded and still on track above 100%.
You should get an annual email, otherwise I believe it's on My Wealth Portal on DNet.
It's a big PDF with funding calculations and balances and disclosures and percentages of targets and estimates. What are you looking for if not that?
Is the partner pension information mixed with the staff pension/401k disclosures?