LEGACY EXCEPTION · NOT A CURRENT-AIRLINE BENEFIT

A pension election is a household risk decision—not an investment-return contest.

Use this guide only if you personally retain a frozen or PBGC-managed airline pension. Compare the actual offer with survivor need, plan strength, taxes, longevity, inflation, and the rest of the portfolio.

Compare the official offer → Review current pilot contributions

THE OFFER CONTROLS THE MODEL

Do not estimate a benefit the administrator already calculates.

Use the administrator’s current written offer: lump sum, every annuity and survivor form, start-date adjustments, restrictions, and deadline. Confirm whether the plan is ongoing, frozen, terminated, or PBGC-administered. An old statement is not an election package.

01

Current lump-sum amount and expiration date

02

Monthly benefit under each available survivor form

03

Plan status, administrator, beneficiary, and documents

04

Spending floor, guaranteed income, and liquid assets

COMPARE THE RISKS

Each form transfers a different problem.

Decision map
Risk	Monthly annuity	Lump sum
Longevity	Transfers some lifetime-income risk to the plan.	Household manages withdrawals for an uncertain lifetime.
Investment markets	Payment is not tied directly to portfolio returns.	Income depends on allocation, returns, fees, withdrawals, and behavior.
Inflation	A fixed payment loses purchasing power without an adjustment.	Assets can seek growth; protection is not guaranteed.
Survivor income	Depends on the form; straight-life may stop at death.	Remaining assets can pass to beneficiaries, subject to spending, markets, and tax.
Liquidity	Usually cannot be accelerated after election.	Adds flexibility plus overspending and advice risk.
Plan or insurer exposure	Depends on the plan, sponsor, and guarantees.	Moves assets to household control with investment and custody risk.

RUN THE HOUSEHOLD TEST

Compare income first, then flexibility.

Income floor

Measure how much essential spending Social Security, pensions, and reliable income already cover.

Survivor case

Model the first death under every form, then test the survivor’s income, taxes, and portfolio.

Portfolio case

For a lump sum, define allocation, fees, withdrawal rules, tax location, and guardrails. Test weak early markets and long life.

Behavior case

Choose between a stable check and flexible capital. Name who manages assets after incapacity or death.

PRIMARY REFERENCES

Verify the benefit and guarantee at the source.

PBGC: annuity or lump sum
PBGC: benefit options
PBGC: understanding pension coverage
Department of Labor: retirement plans
Your plan: current election package, summary plan description, benefit estimate, and administrator confirmation

Educational comparison only. Pension forms, guarantees, taxes, interest-rate assumptions, deadlines, and spousal-consent rules vary. The current plan documents and administrator record control.

RUN THE ACTUAL OFFER

Use the monthly benefit and lump sum you can really elect.

ELECTION

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