| Company Name | For plan years beginning in | Year | Month | First Segment | Second Segment | Third Segment | Plan Type |
| Kimberly-Clark | All | 2025 | January | 4.74% | 5.55% | 5.92% | |
| Kimberly-Clark | All | 2024 | January | 4.89% | 5.14% | 5.29% |
Lump Sum vs. Annuity
Retirees who are eligible for a pension are often offered the choice of whether to actually take the pension payments for life, or receive a lump-sum dollar amount for the “equivalent” value of the pension – with the idea that you could then take the money (rolling it over to an IRA), invest it, and generate your own cash flows by taking systematic withdrawals throughout retirement.
The upside of keeping the pension itself is that the payments are guaranteed to continue for life (at least to the extent that the pension plan itself remains in place and solvent and doesn’t default). Thus, whether you live 10, 20, or 30 (or more!) years in retirement, you don’t have to worry about the risk of outliving the money.
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By contrast, selecting the lump-sum gives you the potential to invest, earn more growth, and potentially generate even greater retirement cash flow. Secondly, if something happens to you, any unused account balance will be available to a surviving spouse or heirs. On the other hand, if you fail to invest the funds for sufficient growth, there’s a danger that the money could run out altogether, and that you may regret not having held onto the pension’s “income for life” guarantee.
Ultimately, though, whether it is really a “risk” to outlive the guaranteed lifetime payments that the pension offers, by taking a lump-sum, depends on what kind of return must be generated on that lump-sum to replicate the payments. After all, if the reality is that it would only take a return of 1% to 2% on that lump sum to create the same pension cash flows for a lifetime, there is little risk that you will outlive the lump-sum even if you withdraw from it for life(1). However, if the pension payments can only be replaced with a higher and much riskier rate of return, there’s also a greater risk those returns won’t manifest and you could run out of money.
Rising Interest Rates
In defined benefit plans, current and future retirees are offered a lump-sum payout or a lifetime monthly pension benefit. Often these plans have billions of dollars worth of unfunded pension liabilities, and in order to get the liability off the books, they pay the lump-sum.
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Depending on lifespan, the initial lump-sum is typically less money than regular pension payments over an entire retirement. However, if interest rates increase by 1% it could decrease the lump-sum offer by approximately 8-10%. Other factors such as income needs, need for survivor benefits, and tax liabilities often dictate the decision to take the lump-sum.
What is the 401(k) plan offered by Kimberly-Clark?
The 401(k) plan offered by Kimberly-Clark is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.
How does Kimberly-Clark match employee contributions to the 401(k) plan?
Kimberly-Clark provides a matching contribution to the 401(k) plan, which typically matches a percentage of what employees contribute, up to a specified limit.
Can employees at Kimberly-Clark choose how their 401(k) contributions are invested?
Yes, employees at Kimberly-Clark can choose from a variety of investment options within the 401(k) plan to align with their retirement goals.
When can employees at Kimberly-Clark enroll in the 401(k) plan?
Employees at Kimberly-Clark can enroll in the 401(k) plan during their initial onboarding period or during designated open enrollment periods.
Is there a vesting schedule for Kimberly-Clark's 401(k) matching contributions?
Yes, Kimberly-Clark has a vesting schedule for matching contributions, meaning employees must work for the company for a certain period before they fully own the matched funds.
What is the maximum contribution limit for Kimberly-Clark's 401(k) plan?
The maximum contribution limit for Kimberly-Clark's 401(k) plan is subject to IRS regulations, which are updated annually. Employees should refer to the latest guidelines for specific limits.
Does Kimberly-Clark offer any financial education resources for employees regarding their 401(k)?
Yes, Kimberly-Clark provides financial education resources and tools to help employees make informed decisions about their 401(k) savings and investments.
Can employees take loans against their 401(k) savings at Kimberly-Clark?
Yes, Kimberly-Clark allows employees to take loans against their 401(k) savings, subject to specific terms and conditions outlined in the plan.
What happens to my 401(k) if I leave Kimberly-Clark?
If you leave Kimberly-Clark, you have several options for your 401(k), including rolling it over to another retirement account, cashing it out, or leaving it in the Kimberly-Clark plan if allowed.
How often can employees change their contribution amounts to the 401(k) at Kimberly-Clark?
Employees at Kimberly-Clark can typically change their contribution amounts to the 401(k) plan during designated enrollment periods or as specified by the plan guidelines.