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Discussion Starter #1
Well, at this point I don't really have to make a decision, but there is a possibility I might....

The situation is this. As many of you know, my job is being eliminated due to a restructuring and I am out by the end of the month. I have been offered a very fair severance package, which I am very pleased about as I am not really happy in my position anyhow and this is a great opportunity for me to move on... You see, my employer is very decentralized into individual units with their own budgets and own hiring decisions. The HR dept here is really only responsible for advisement and processing paperwork. They don't make hiring decisions. As such, there is no real career-track because promotions tend to involve jumping from one department to another, and senior positions are few and far between.

Meanwhile, I had applied for a position with a different department with my employer, before I was offered the severance. I've just been selected for an interview. This position is at a lower classification and pay-scale then my current position, and if I were to accept it I would NOT get the severance package. I do think that in the future it could be reclassified upwards, because this particular dept is very new and growing, and it would be a very interesting place to work.

However, I also have heard of a few positions with other employers that I would have a good shot at... And if I went to another employer, I would get to keep my severance. But of course, nothing is guaranteed and some of these positions I am hearing about are 12-month terms (although there is always a good possibility of being kept on if you do good work).

The other wrench in this whole scenario is that I would like to have another baby soon, and I can really only do that if I am in a permanent, full-time position.

My conundrum is - should I be offered this position with my current employer, do I give up my severance (significant money) for a guaranteed full-time, permanent position... even if it is less money to start and potential for career advancement is limited?

You know, as I write this out, I think I know that I will likely turn the position down... the only way I would truly consider it is if they said they would really make an effort to develop the position and reclassify it upwards in the near future... although at this point I don't even know if they would have the budget to do that...

Anyhow, I welcome your comments!!
 

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Jo.. here's the thing.. you're not giving up your severance.. you're keeping what could end up being a very good retirement fund when it comes time.

If you take the severance just because the extra money would be nice, you're really sacrificing your retirement money for some short-term breathing room. I really think you have to consider a more long-term gain here and not just the next few years.

Your pension will be worth exponentially more in 25 years than it is today, and if you can't find another position that has a decent pension plan, you're going to be on the hook for it yourself. And that's not easy.

I think, personally, if you can stay on, keep your pension vesting.. i'd do that. I know you were hoping to put the severance toward some house renos and other odds n' ends.. but trust me.. when you're 60 and you don't have to worry about how you're going to make ends meet, you'll be very glad you did.

You need to guard a good pension, now a days, with all you got.

JMO
 

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If things weren't so unstable right now, I'd say take the severence and take a shot at the other jobs. But if it's security you want, so you can have a baby, maybe you should accept their offer and hope to advance later. That's a tough one to decide, especially if you'd like the work better. My first instinct would be to take the severence, but then I'd be nervous of the future. Sorry, I didn't help much, did I?
 

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For what it is worth.

Kelli brought forward a good point. If your current employer offers a pension, those companies are few and far between today. It may be reason to stay put all by itself.

The main issue you have to assess is long term verses short term. The severance is nice, if you have another position. But you are planning a possible addition to your family. How much time off do you have where you are, verses what would a new job offer? The salary reduction, any potential that you could maintain your salary, giving up potential increases until the new job rate catches up? Do you like the company, will staying provide you better opportunity to catch a better position when the economy turns and the company grows again? Lots of questions, long term thinking or short term thinking. A job in hand or the hope for a better job somewhere in a hard environment for any job? ... and on and on.
 

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I agree with Kelli 100%. :)
 

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Discussion Starter #6
kelli - the thing is, I get to take my pension (both mine and employers contributions over the past 8 years) and roll it into an RRSP. Its a significant amount of money, and now with the market near bottom it might be a great time to buy in.

Also, I am quite sure that the two other potential employers I have irons in the fire with currently do have pension plans. Yeah, starting out at 30 isn't as good as at 21, but then I have that nice RRSP too...

As for the family planning, that's the kicker. In Canada we get 12-months leave, and if I were in a permanent position they would have to keep my job for me... But in a contract position they would not, so I could potentially be out of a job when I came back from leave. Of course, i would not have to take the entire 12 months, and that is an option as well. My husband could potentially take some of that leave...

The state of the economy is DEFINITELY a factor in my decision making...
 

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I think that you have been offered some very good and worthy advice. Good luck with the decision! I know that these are never easy ones to make.
 

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I'm going to go with.. "its weight in gold".

lol.

So can anyone tell me, is it better to have RRSP's or a pension plan?? I know a pension plan is guaranteed (well, you would hope)... but with RRSP's you have the potential for greater income, plus they would be part of your estate if you died... unlike survivor benefits with a pension plan....
 

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Pension.

When you retire.. you probably receive more money than you've contributed very early on.. within a few years i'd think.. after that.. it's pure profit.. and it's guaranteed income for the rest of your life.. when you invest in RRSPs.. you get what you saved and any money you make.. but once you start drawing from it.. you get what you get.. when you spend it, it's gone.

I have what's called a Million Dollar Pension because if i live an average life span, i will have received a million dollars in pension money.. can you save that much in RRSPs?

You need both, Jo.. but you will find it very difficult to conitinue your lifestyle with just RRSPs.

Currently I pay 6.5% of my salary to a pension plan. My employer matches that. When i retire they'll base my payments are the best FIVE YEARS of salary income. It's a **** good plan. Most private sector companies offer no pension or a low 2% matched.. a good pension is really worth more than good benefits these days.. so if you have one, try and keep it.
 

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Kelli is giving you good advice - the only caveat if it's a non goverenment pension, it's only as good as the company - take Nortel pensioners for example - not in a good place
 

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Kelli is giving you good advice - the only caveat if it's a non goverenment pension, it's only as good as the company - take Nortel pensioners for example - not in a good place
This is why i warn against private sector.. and i believe Jo works for a uni.. which is pretty much on par with gov't, i believe..
 

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Could you use the severance amount and the potential cuts in salary to "bargain up" your compensation and seniority in the new position?

I don't know anything about the Canadian pension system. Does the value of it increase with higher salaries (I assume yes). Because in that case, you might also want to weigh in potential long-term career path.

I'm not much help, am I? Good luck with the decision in any case.
 

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wow; that's a lot to think about jo....wishing you the best and i know you will do great with whatever you decide.
 

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You're gotten some really good advice, Jo. I just wanted to say--as someone who's in the exact same position as you (just not as far along on the path to layoff)--GOOD LUCK! :)
 

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I agree with Kelli. A full time job is a full time job. whht if it takes months, and you don't end up with something you like? Would it be better to take this one & just keep looking for something better while you work there? I'd just be afraid of running out of severance and have no job at all, or one you don't like, or one you "settled" for because your severance was almost up . There's a lot of competition for the good jobs, especially now. I'd feel safer with a net under me while I looked. I am speaking fom the chicken-**** POV, btw. =)
 
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