IBM's pension has three chapters: the end of U.S. defined benefit accruals on December 31, 2007, two large transfers of retirees to insurers in 2022 and 2024, and the Retirement Benefit Account that started in 2024.
Where the IBM pension stands
IBM stopped U.S. defined benefit accruals on December 31, 2007. Frozen benefits come from different formulas depending on the participant: average earnings, service and age, or a cash balance formula with interest credits. On January 1, 2024 IBM added the Retirement Benefit Account to the Personal Pension Plan in place of its 401(k) contributions. It credits 5% of eligible pay monthly for U.S. regular employees with at least a year of service and earns 6% interest through 2026, then the 10-year Treasury yield with a 3% minimum through 2033.
Lump sums and insurer transfers
In September 2022 the plan bought group annuities from Prudential and MetLife, transferring about $16 billion of obligations for about 100,000 participants and beneficiaries whose benefits began before 2016. Each insurer pays half, starting January 1, 2023. In September 2024 the plan moved about $6 billion more for about 32,000 participants and beneficiaries to Prudential, which pays them from January 1, 2025.
What a lump sum is worth in 2026
When a private plan pays a lump sum, it can't be smaller than the IRS 417(e) present value. Plans that use November rates for 2026 apply the November 2025 segment rates: 4.07% for payments in years 1 to 5, 5.15% for years 6 to 20 and 6.01% after that, with the IRS 2026 mortality table from Notice 2025-40. On those inputs, a $3,000 monthly benefit starting at 65 has a minimum lump sum of about $442,500. Your plan's lookback month can differ, so check your Summary Plan Description, and run your own benefit through the lump sum calculator.
PBGC coverage
Benefits still in a private single-employer plan are insured by the PBGC. For a plan that terminates in 2026, PBGC guarantees up to $7,789.77 a month for a straight-life annuity starting at 65, less for earlier starts or survivor forms. Benefits IBM moved to Prudential and MetLife left the PBGC system and rely on the insurer and state guaranty associations instead.
Social Security
IBM jobs paid into Social Security, so the Windfall Elimination Provision never applied to these pensions, and WEP was repealed anyway for benefits payable after December 2023. If the pension covers your basic expenses, delaying Social Security toward 70 raises the one income source that adjusts for inflation. Model it with the Social Security calculator.
The IBM employer page lists the filings behind every date and dollar figure here.