Why Would Anyone Sell Pension Plans For A Lump Sum?
Why should anyone want to sell their pension plan? Well, I can understand worries about security of the pension future, companies stopping their pension payouts or disappearing along with your pension savings (there may be protections against this), but otherwise what's the advantage of selling pension?
I believe many variables really have to be taken into account when one is about to do the move to sell their pension for a lump sum.
First off, you pay a heavy price for the sale. Not only are you loosing the security of a steady annuity income, but you also will NOT get the same amount that you would from future pension pay outs. Your boss is not going to buy out your pension for the same price that they would otherwise pay you in the future payouts. They'll discount it at a given rate and give you the Present value.
Then, consider the possibility of losing the pension benefits, as well as possible tax implications. Is the income of a pension cash out considered taxable income? If so, count this in into the total of what you get from your employer who wants to buy out your pension.
Even if your plan is to take the money of the pension buy out and invest it in a plan, say annuities with some benefits not included with your pension, you should think hard if your future annuity gains will balance out what you lose by selling your pension for a lump sum including the income taxes if applicable for the pension sale.
You better think this through carefully before you act for selling your pension will be a one time and irreversible act. You can't reverse it afterwards. So think hard, make sure it pays for you.