Dow Pension Lump Sum Calculator

Dow Pension: What You Need to Know

The Dow Employees Pension Plan covers chemical manufacturing workers with specific eligibility requirements based on years of service and, in some cases, collective bargaining agreements. Benefits vary significantly by hire date, plan tier, and whether you are in a union or management track.

Plan status: Frozen

Dow (formerly DowDuPont, now operating as Dow Inc. following the 2019 separation from DuPont and Corteva) froze most US salaried defined benefit pension accruals and moved new employees to a 401(k)-only structure. The 2017 DowDuPont merger and subsequent three-way split created complex benefit histories for employees who moved between entities. Employees from legacy Dow, legacy DuPont, and Corteva may have different plan sponsors administering their accrued benefits. Check your benefit statement to confirm which entity is your plan sponsor.

Buyout history

Dow has offered lump sum elections to terminated vested participants in prior years. The complexity of the DowDuPont merger and subsequent separation has created multiple plan sponsors and benefit administration structures. Participants should confirm their plan sponsor before seeking lump sum information, as different entities (Dow, DuPont, Corteva) administer different cohorts of benefits.

Understanding your lump sum offer

If Dow has offered you a lump sum, that number was calculated using the IRS 417(e) formula with the applicable segment rates for your plan year. The minimum lump sum the plan must offer is the present value of your accrued benefit discounted at those segment rates.

Plans can offer more than the minimum, but rarely do. If the lump sum offer is close to what this calculator produces using the current segment rates, the offer is actuarially fair. If it's significantly lower, it's worth asking your plan administrator which lookback month they used and confirming the mortality table.

For 2026 plan years, the segment rates from November 2025 are 5.03% for years 1-5, 5.35% for years 6-20, and 5.57% for years 21 and beyond. Compare these against the rates in your lump sum election notice, which should appear in the offer paperwork.

Tax considerations

The lump sum is taxable in the year you receive it unless you roll it directly to a traditional IRA or your new employer's 401(k). A direct rollover (plan to IRA) is not a taxable event. Taking the cash is. If you take cash, the plan is required to withhold 20% for federal taxes, and you'll owe the remaining taxes when you file.

A $400,000 lump sum taken as cash with $80,000 withheld still results in tax at ordinary income rates on the full $400,000. For most retirees in that range, the total federal and state tax bill on a cash distribution runs $100,000 to $140,000 in the year of receipt. The rollover avoids all of that until you take distributions later.

When the lump sum makes sense

For Dow retirees specifically, the lump sum can make sense when: you have serious health concerns and don't expect to reach the break-even age, you have other guaranteed income sources (Social Security, spouse's pension) that cover your baseline expenses, or you're a disciplined investor comfortable managing a seven-figure portfolio.

The annuity is typically the right answer for people who don't have other guaranteed income, whose spouse is younger and may outlive them significantly, or who simply don't want to manage a large portfolio in retirement. The guaranteed payment doesn't fluctuate with markets. It shows up every month regardless of what the S&P did.