Money Talks

03/11/2026

Can you convert your Traditional NIPSCO Pension to the Account Balance 1 Plan (Cash Balance Plan)?

This question has come up recently, so it’s a good time to share some insight.

On June 1, 2004, NIPSCO employees in Local 12775 were given a one-time opportunity to convert their Traditional Pension to the Account Balance 1 Plan (Cash Balance Plan).

During that conversion period, several factors, such as years of service and accrued pension value, were used to calculate what your benefit would have been under the new Cash Balance plan if you chose to convert. Employees who elected to switch were moved into the Account Balance plan at that time. However, employees who chose not to convert remained in the Traditional Pension plan.

A common follow-up question is:
“If I’m still in the Traditional Pension today, can I convert to the Cash Balance plan now?”

Unfortunately, the answer is no. The conversion option was only available during the one-time election period in 2004, and there is currently no option to switch plans today.

If you are still enrolled in the Traditional Pension plan, your benefit will continue under the original pension structure.

Both plans have their own advantages and play an important role in retirement planning. Understanding how your pension works, along with your other retirement benefits, can help you better prepare for the future.

If you have questions about your NIPSCO retirement benefits, feel free to reach out. I can help walk through your options and answer any questions you may have.

03/09/2026

With so much conversation surrounding NIPSCO right now, there’s no better time to review and better understand your retirement benefits.

Taking a moment to revisit your financial benefits including your 401(k), pension, savings, and long-term planning options can help you feel more confident about your future.

It’s always valuable to understand the benefits available to you at NIPSCO and how you can take full advantage of them as you plan ahead. Feel free to review the retirement booklet below, and reach out if I can help answer any questions.

Specializing in helping NIPSCO union workers take control of their financial future whether it's retiring early, supporting your kids’ education, or having the freedom to travel more. Ken understands how busy life can get, and that managing finances can feel overwhelming. But with the right plan, ...

02/26/2026

NIPSCO Union Employees Hired Before June 1, 2004: Key Information for Retirement Planning

Early Retirement Basics
Once you've submitted your pension paperwork, your first pension payment will arrive on the first day of the month following your retirement date.
If you qualify under the Rule of 85 (age + years of credited service totaling at least 85, typically requiring at least age 55), you're eligible for a supplemental benefit. This benefit acts as a bridge and continues only until you reach age 65. Importantly, the supplemental amount is added directly to your regular monthly pension check it's not paid as a separate deposit.

Retirement Date Timing Tip
When planning your retirement, strongly consider retiring on the last day of the month rather than the first. This can help ensure your first pension payment is deposited the day after your retirement (or very soon after), avoiding a longer wait until the first of the following month.

Need Help?
If you're planning your retirement and would like assistance understanding your NIPSCO pension or other benefits, I've invested countless hours researching these details to support a smooth and successful transition. Feel free to reach out with any questions. I’m happy to help!

02/24/2026

If you're a NIPSCO Union employee planning on retiring this year, here is what you need to know.

1. Pension: Knowing which pension you have will determine what your retirement options are. If you were hired before June 1st, 2004, and have not converted your pension, you are on what’s called the Traditional or Final Average Payout Pension (FAP for short). This pension plan guarantees a monthly payout throughout all of your retirement years. This is the only distribution option that you have with the FAP plan.

If you were hired after June 1st, 2004, you are on what’s known as the AB 1 or Cash Balance Pension Plan. This plan is completely different than the Traditional plan. There was an opportunity for former Traditional pension employees to convert their pension to the AB 1 plan, but we will discuss that further in a different post.

Regarding your AB 1 plan, you have two options when it comes to taking your pension. You can either annuitize your funds and receive a fixed monthly payout, or you can roll your funds out of your pension and into a Traditional IRA, allowing you to continue to grow your investments even after retirement.

2. 401(k): All NIPSCO Union employees have access to a 401(k). There will come a time when you are retired and may want to roll these funds into a Traditional or Roth IRA (depending on your allocation) to continue growing your investments after retirement.

3. Medical Insurance: This is one that I typically get many questions on, and that’s because it’s often one of the biggest concerns you’ll have when you go into retirement. Fortunately, NIPSCO has a good retiree medical insurance program. Whether you retire pre-65 or post-65 will determine prices, as well as supplemental plans and options available to you. Likewise, it’s important to also consider any spouses, dependents, and health complications you have when determining the best plan option for you.

All of these are necessary steps to consider before retiring. The retirement process is not an overnight thing. This happens over the course of several months of proper planning and selecting the best options for you.

Starting with your pension, you will want to request your pension packet from HR about 3 months before your planned retirement date. This will allow HR to run your pension payout calculations. Moreover, you will have a call with the NIPSCO benefits department, and they will go over not only the pension options but also your health insurance options. Once this is all planned out, they will send you a final pension packet, which you will sign and send in. Once your packet is accepted, they will process your retirement for your scheduled retirement date.

This can be quite the process, especially if you are unsure what the best option is for you. This is why I have dedicated years to learning the ins and outs of each of these specific plans and can help guide you to a successful retirement from NIPSCO.

02/19/2026

Contributing to your 401(k) as a NIPSCO union employee is a must. NIPSCO offers a generous matching contribution towards your 401(k) retirement plan. You're probably asking how much do they contribute?

Depending on which pension plan you are enrolled in AB 1 and Traditional FAP plan, your contribution percentage is different. There are actually 3 different contribution percentages because of a merger that took place in 2011; however, listed below are the two most common matching percentages for each respective employee based on which pension they are enrolled in.

If you're looking for assistance with your 401(k), don't hesitate to reach out regarding your NIPSCO 401(k)

02/17/2026

NIPSCO union employees, as you get closer to retirement, here is what you'll need to know about your Final Average Payout Pension, commonly referred to as the Traditional Pension Plan. If you've been hired before June 2004, you're likely on the Traditional Pension plan.

There are three essential parts of figuring out your pension payout. These three parts are your years of service, age, and pay class.

*Keep in mind the rule of 85 matters when it comes to retirement under this plan. The rule is that your age plus years of service must equal or be greater than 85 for unreduced retirement benefits.

Below is a possible pension payout calculation for an employee who is in the D pay class. With 32 years at NIPSCO.

It is also important to know that there are options for pension distribution. Here you have 4 options:

-Single Life Annuity: This example is exactly that; it is the full pension payout portion that you will receive each month. If you are unmarried, this is the payout that you will receive. If you are married, you may select this option as well; however, it is required that your spouse sign off on this before selecting this option.

-50% Pop-up Annuity: This is one of the options that you have as a married individual. Your pension benefit will be reduced; however, it will ensure that your spouse will receive a monthly pension payout in the case that you pass first.

-75% Pop-up Annuity: This is similar to the 50%, however, in this case, your benefit is reduced even further, but your spousal benefit increases.

-100% Pop-up Annuity: This, like the previous two examples are also reduced even further. What is interesting in this case is that your pension payout while alive will be exactly the same amount as your spouse would receive if you passed first.

Decisions like this are crucial to consider before retiring. If you are married, it's important for you to speak with your spouse first to decide which option to take. NIPSCO's retirement department will pre-fill this information and make all of the required calculations to get your pension options available for you to select. This process takes roughly 3 months, so begin planning early. This way you can head into retirement with confidence.

02/12/2026

Let’s talk pay-based credits.

NIPSCO AB1 employees often ask how their pension grows. The first component is pay-based credits, which are determined by your pay and years of service at NIPSCO, using your pay as of December 31 of the prior year.

The chart shown is based on the combined total of your age plus years of service. As you continue working, you move into higher pay-credit brackets, which means larger contributions are made to your pension.

The incentive is simple: the longer you stay, the higher your pay-credit percentage becomes. As you approach retirement, you’ll likely be in one of the highest brackets, which can significantly increase your pension contribution.

Keep in mind, these pension credits are typically deposited into your account in February, so they may not appear immediately.

02/10/2026

The Rule of 85 and Why It Matters

For the few employees still on the Traditional Pension, the Rule of 85 determines eligibility for full retirement benefits.

This is especially important if you plan to retire early or before age 65.

To see if you meet the Rule of 85, simply add your age + years of service. If the total is 85 or more, you are guaranteed your full pension benefits.

If your total is below 85, your pension benefits may be reduced.

02/05/2026

Is my matching contribution accurate for last year? This is a common question for NIPSCO employees, especially if they maxed out their 401(k) early in the year. Since your match is based on your annual pay, what happens for the rest of the year?

Fortunately, NIPSCO offers True-Up matching. At year-end, they account for your full-year pay and make an adjusted, or “trued-up,” contribution to ensure your match accurately reflects the prior year.

This process usually takes place in mid-February, when the contribution is deposited into your 401(k) account.

02/03/2026

One of the most common questions is: What will my health insurance look like when I retire from NIPSCO? The answer depends on several factors, including whether you retire before or after age 65, and whether you are married.

*AB1 Pension Plan employees considering retirement at age 55 must meet certain requirements: you must be at least 55 years old and have a minimum of 10 years of service to qualify for NIPSCO retiree health insurance.
Eligible employees have access to retiree health coverage. Like pension calculations, your age, years of service, and your spouse’s age (if married) will factor into your options. When you submit your pension packet and finalize your retirement, you will be asked for this information.
The goal of retiree health insurance is to continue supporting employees in retirement, while keeping monthly premiums similar to what they pay while working.

Retirees pre-65 and post-65 qualify for different health insurance plans. If you enroll in Medicare Part B or Part D, you may also be eligible for a supplemental plan.

Given all the nuances, it’s important to carefully consider your options before selecting a plan in retirement.