How to add a PERS retirement pension plan account?

LH2009

In Quicken I created a new account for PERS (in my state of Iowa it's called IPERS). This is a pension plan and isn't a 401(k) or 403(b).

It's an offline account so I am manually adding it. What type of account is it?

jacobs

For Quicken's purposes, I don't think the type of account matters, as long as you choose one of the retirement account types. Quicken only needs to know a account is a retirement account so it categorizes income as tax-free rather than taxable on the Tax report. I might be wrong, but I don't think Quicken does anything differently with a Traditional IRA, SEP IRA, or Simple IRA, and I suspect all of the retirement accounts are treated the same. Quicken isn't tax software; it doesn't know your age, filing status, or the rules associated with each type of retirement account.

You can track the contributions you make into this pension account, but I'm not sure how useful that will be, since Quicken doesn't know anything about how long you've been in the pension plan and what the payout will be. My wife works for the state, so each paycheck there's a split line for her mandatory contribution to the pension plan. So I can see in a Quicken asset account exactly how much she's contributed over time — but other than an object of curiosity, it seems kind of useless because it doesn't tell me what her future pension earnings will be.

volvogirl

Is this for contributions or are you getting the pension now? And it's probably not tax free but tax deferred.

jacobs

I only meant that any income in a retirement plan is (correctly) ignored by Quicken Mac for generating tax reports. Perhaps I should have said taxable versus non-taxable income. Quicken Mac doesn't have any built-in intelligence about withdrawals from retirement accounts and the tax consequences, if any, of such withdrawals.

retird

I too have a state pension plan (tax deferred until withdrawal). I have tracked it for over 25 years now. I set it up as a Retirement Account. The fields I use are listed:

Date, Payee, Memo, Category, Payment, Deposit, Amount, and Balance. Also Attachment and Cleared fields.

I use the Payee Field as a Notes field. I can designate here whether it is a deposit of contributions, Interest Earned, Withdrawal, etc. Set up your own Categories….

retird

https://community.quicken.com/discussion/7939613/how-to-add-a-pers-retirement-pension-plan-account

You should call the Pension Office (of your pension) and ask them what type of plan it is.

Jon

As far as I can tell, it isn't exactly like any of the options that Quicken offers. While you're working, it's sort of like a 401K except the contributions are involuntary, the contribution amount is set each year by the pension plan, and you don't have any control over how the money is invested. If you leave before qualifying for retirement, you can roll the money over to another qualified retirement plan (IRA, 401K, etc). So I would do what @jacobs suggested and track it as one of those types of accounts if you're still working.

When you retire, it converts to a defined benefit pension based on your salary. At that point there's no longer an account to track, just the monthly payments.

retird

@Jon …. your statement "When you retire, it converts to a defined benefit pension based on your salary. At that point there's no longer an account to track, just the monthly payments." is not applicable to all plans…. . A pensioner should know what his plan design is thus my comment to contact them and find out what type of plan they have in Iowa….

Jon

@retird I wasn't looking at all states, just Iowa.

https://ipers.org/

retird

https://community.quicken.com/discussion/comment/20383087#Comment_20383087

THX for clarifying…

jacobs

The issue with tracking paycheck deductions for a defined benefit pension plan is the the cumulative value of the deductions just isn’t relevant — from a Quicken standpoint.

Of course, your time it in the plan affects your monthly payment, but Quicken isn’t able to help you calculate what your monthly payment will be. In most plans, your payment is based on your cumulative earnings or your top 3 or 5 earnings years; that goes into a formula to determine your payout. Then, in some plans, you get to chose from a variety of spousal survival options, where you can opt to receive less money each month in return for how much your surviving spouse would receive should you predecease them. In my wife’s state plan, I believe there are about 10 such options. And none of this has anything to do with tracking your contributions into the pension plan in Quicken!

Think of it like Social Security. You’ve had money withheld for years, but the amount you’ve paid in isn’t something you track. Based on your employment history, the government calculates what you’ll receive each month.

I think some Quicken users have said they treat their mandatory pension contributions as expenses in Quicken, just like Social Security. I chose to accumulate the contributions in an asset account, but it’s not a real asset as the payments once my wife is collecting will be income, not a transfer from the asset account, and the asset account has no relation to what her payment will be.

retird

@jacobs I agree that Quicken is not designed for defined contribution nor defined benefit pension plans. It can be a tool, however, to track and monitor the plans. My plan has options also and 1 option allows splitting the plan and part of it is still invested. I use Quicken as a tracking tool and a tool to verify my figures and investment return calculations agree with the pension offices calculations. The pension system provides a formula to use to calculate taxable amounts per individual based on seversl factors so Quicken certainly can't be used for that… but an Excel spreadsheet is a good tool for that since calculations are needed in my case.