Brad Allen On the other hand

When Craig Hanson left 3M Co. in 1998, then in his mid-40s after a 20-year career, he walked away with a traditional defined benefit (DB) pension. Now 60 and living in rural Wisconsin, the former chemical engineer is one of a shrinking number of American workers with employer-sponsored pensions that promise monthly payments for life in retirement.

Over the past three decades-plus with the introduction of defined contribution (DC) plans like 401(k)s, retirement planning has become much more a do-it-yourself proposition with individuals responsible for managing and investing their own retirement savings. Financial websites have responded with do-it-yourself tools empowering many to manage their financial lives on their own. But sometimes financial decisions turn on more subtle and complex calculations than formulas and spreadsheets alone can solve.

That's the situation Hanson faced last summer when 3M joined a growing list of companies that, since 2012, have offered to "buy out" the DB pensions of more than half a million American workers and retirees participating in traditional DB plans. He along with several thousand other current and former 3Mers received a letter from the company, urging them to "make a choice for your future" by offering an "opportunity to access your pension benefits now."

From the company's point of view, it makes sense to shift the risk of funding retirement onto employees. With people living longer and interest rates below historic norms, the annual cost to fund those future pension payments keeps growing. But Nancy Hwa, communications director at the Pension Rights Center, a consumer advocacy group in Washington D.C., said that while there is no simple answer for individuals offered a buyout, in general "guaranteed income for life is better than a lump sum. It's really hard to make a lump sum last through retirement on your own."

3M said in its financial filings that at the end of 2013 more than 42,000 current and former U.S. employees were either eligible or earning credit toward pension benefits. While the company has not disclosed how many took the buyout, Nick Gangestad, 3M's chief financial officer, told investors late last year that structural changes to its pension plans were "largely complete" and the company has closed most of its DB plans. Gangestad expects reduced pension expense to contribute 1 percent to earnings-per-share growth through 2017.

As he pondered his options, Hanson posted a comment in an online forum for current and former 3Mers as a way to check his own thinking, hoping current employees might reveal information about the buyout "not publicly available to noncurrent 3Mers." He also sought to gain from 3M employees and alums who he regards as "more highly intelligent and hav[ing] access to specialty advisers." Hanson said the forum forced him to carefully think through several issues and helped him focus his research, finally deciding to take the buyout.

In the DIY financial planning world, online forums allow strangers to offer back-of-the-envelope calculations and opinions ranging from sober advice to conspiracy theories and warnings of a global economic collapse. But individual participants also take away what they want.

"The math part of it is fairly simple for most people," observed Craig Bane, a former 3M employee who also received the buyout offer. In his current career as a managing partner at Edina-based investment adviser Bane O'Leary, where he focuses on retirees and pre-retirees, Bane seems particularly well equipped to do the math himself.

Bane's firm posted a comment on the forum pointing out that the irrevocable decision hinges on more than a simple calculation of a discount rate and the estimated value of each option. A person's current state of health and life expectancy, importance of spousal benefits, taxes, savings, social security payments and other income all play into the decision, he said, urging forum participants to consult a financial adviser.

Steve Dropkin left 3M in 2012 after 15 years in IT and software. Currently self-employed as a real estate photographer, at 56 he's not yet eligible to receive the pension benefits he earned. Having managed his family investments "for decades," Dropkin primarily relied on his own research and his financial adviser. "Retirement planning is fairly new ground for me, so it was good to have a pro look at our plan and assets and bring up considerations particular to our situation." He found the forum helpful in sharpening his analysis and his questions for his financial adviser. After spending 25 hours researching and evaluating his options, he decided to remain in the pension plan.

One forum participant, who asked that her name not be published because she still works at 3M, said her decision was simple.

"I'm very healthy, expect to live at least as long as my parents who are both over 85 and active." After she crunched the numbers on her own (she avoids financial advisers), she decided to stay with the pension plan. But she said participating in the forum gave her a sense of how many would take the buyout, lowering 3M's overall pension costs, benefiting those like her who stay in the plan.

Brad Allen is a Minneapolis freelance journalist and former investor relations executive for companies including Imation Corp. and Cray Research. His column appears monthly. His e-mail is