From what I hear, it used to be 66% of your best three years in perpetuity.
Now (provided that you are vested), it’s 150k for every year that you were partner. But you have the option to take lump sum during the start of retirement.
The above is incorrect. It works somewhat similarly to a defined contribution plan, where their is a defined contribution each year, that increases with age. This is a coupled with a large 401k contribution too. So I don’t really view it in terms of the future pension, but rather the money I’m getting each year. This is because if I leave, I would still have it. It’s much more portable and no vesting concerns. The sweetener to stay is the above two amounts go up considerably as you age.
Compared to the old plan, they have charts that show they get you to the same place if you are a long term partner. However, the plan reflects the changing dynamics that many partners won’t stay their whole career.
EY partners are also earning much more in DIPP today than 5-10 years ago with DIPP expected to continue growing more than inflation, so you have to factor that in as well.
You have to get one of the newer partners to confirm. My understanding is the new pension plan is worth to $2-3m; I believe there’s a total max now but more relaxed rules on vesting period.
At some point in the PPMD process is there a session to share salary, bonus, pension info? I am in Partner process now, and keep thinking at some point I will be provided more info.
From what I hear, it used to be 66% of your best three years in perpetuity.
Now (provided that you are vested), it’s 150k for every year that you were partner. But you have the option to take lump sum during the start of retirement.
I thought there was a $400k/year maximum before. So even if you made $2m in best three years, you’d get $400k.
The above is incorrect. It works somewhat similarly to a defined contribution plan, where their is a defined contribution each year, that increases with age. This is a coupled with a large 401k contribution too. So I don’t really view it in terms of the future pension, but rather the money I’m getting each year. This is because if I leave, I would still have it. It’s much more portable and no vesting concerns. The sweetener to stay is the above two amounts go up considerably as you age.
Compared to the old plan, they have charts that show they get you to the same place if you are a long term partner. However, the plan reflects the changing dynamics that many partners won’t stay their whole career.
Not funded from our distribtutions (although in theory everything is funded by a partners distributions). Amount is based on age.
150K/year of partnership seems high. So if you were a 10 year partner, you would would have an annual payout of $1.5M in retirement?
I believe the current partner changes were implemented around 15/16.
Pro tip: if something like this changes, it does not change for the better.
EY partners are also earning much more in DIPP today than 5-10 years ago with DIPP expected to continue growing more than inflation, so you have to factor that in as well.
Subject Expert
You have to get one of the newer partners to confirm. My understanding is the new pension plan is worth to $2-3m; I believe there’s a total max now but more relaxed rules on vesting period.
Correct - new Partner here
At some point in the PPMD process is there a session to share salary, bonus, pension info? I am in Partner process now, and keep thinking at some point I will be provided more info.
Oh I see! Thanks!