The DuPont Co. has told 18,000 former workers they have from Sept. 12 until Oct. 21 to trade their future pensions -- for up-front cash, or for an earlier but smaller monthly annuity -- instead of waiting until they reach retirement age to collect traditional pension checks. (Latest update: see Why Now? below) 

The voluntary choice, which takes place as DuPont prepares to combine operations with Dow Chemical Co. and break into smaller firms, is for people who left the company by Dec. 31 but aren't yet old enough to collect their DuPont pensions. For those who want money up front, "payments will be made at the end of November (or) early December," DuPont spokesman Daniel A. Turner told me. More from DuPont at pension FAQs here.

Why not wait for the pensions? "I think the company has scared everybody," says Craig Skaggs, a retired DuPont lobbyist who runs the DuPont Pensioners Facebook page, a forum for concerned retirees and future retirees which has attracted over 3,000 members. 

Skaggs and other retirees are asking who will end up guaranteeing the Wilmington-based company's $24 billion in pension liabilities for 140,000 current and former workers. 

The options, as DuPont lays them out:
1) "Take a lump sum now," totalling the present value of a worker's future pension. The money can be rolled over into a company savings, 401(k) or retirement plan; it can be collected in a single check; or some of both.
2) "Begin monthly annuity payments now," reduced for "early commencement," and possibly transferable to a surviving spouse.
3) "Wait to take your pension benefit." 
People who want the money sooner can apply online.

UPDATE:  "This is very likely to be the most important financial decision that these people face and shouldn’t be taken lightly," says Joellen Leavelle, spokeswoman and outreach head at the Pension Rights Center in Washington, D.C.

"People who chose to take the company up on its lump sum offer will be solely responsible for making sure the money lasts for the rest of their lives." Her group have posted a decision guide: "Should you take your pension as a lump sum?"  

It's "worrisome" to have to choose, says Olivia Mitchell, head of the Wharton Pension Research Council at the University of Pennsylvania. DuPont pensions "are backed by the Pension Benefit Guaranty Corp. But PBGC also has limits, and is facing solvency questions," she noted.

"Do people really think they can invest the money better by themselves? People tend to understimate the fees, and the charges. If they do take a lump sum, and if they can roll it over into a well-managed retirement plan or a deferred annuity, and wait awhile before they start to take the money, that may be a good option.  It really depends on their personal situation."

What's in it for DuPont, Mitchell added, is clear: "The people who 'lump it out' are no longer obligations" for the company to keep funding in the future.

"This 'pot of gold' may be tempting. but there are so many risks with making sure the money will last," added the Pension Rights Center's Leavelle. "Will they be okay with the fluctuating stock market? What are the tax implications? Some IRA managers charge really large fees. The employees should make sure they fully investigate all the possibilities before they step away from the company's pension."  

WHY NOW? The government is pressuring the nation's surviving pension funds to tighten their liability calculations, notes Skaggs. While well-meaning, and long-delayed, this also has the effect of pressing companies to set aside more money for pensions -- which they'd sooner avoid.

From this article in about a "lump-sum" buyout offer by another company: "The IRS helped to fuel the trend toward lump-sum offers when it said in July that it would put off using new mortality-rate calculations based on longer lifespans until 2017. That suddenly made it cheaper for companies to offer pension buyouts now than in the future. The new assumptions that people will live longer will make lump-sum offers more expensive to companies."

EARLIER: DuPont has not yet detailed who will take responsibility for paying everything DuPont owes bondholders, pensioners and pollution clean-up, from current and former plant operations.  "DuPont remains committed to making contributions to the Plan consistent with the company's funding policy and the funding requirements under U.S. laws and regulations," the company told employees in a statement.

DuPont shareholders last month ratified a plan by DuPont boss Edward Breen, Dow Chemical Co. CEO Andrew Liveris and major shareholders to combine their companies.

Over the next two years, Dow DuPont plans to split into three firms -- one to sell both companies' pesticides and engineered crop seeds, one to focus mostly on Dow's other chemical plants, and one for DuPont's remaining businesses. DuPont has built or bought and later sold or spun off a long list of businesses, including Chemours chemicals, Axalta paints and Invista fabrics, among others.

Skaggs said DuPont veterans are concerned DuPont might not be able to fund the pensions after it is broken up, and that the government-run Pension Benefit Guaranty Corp. could end up reducing benefits to legal minimums.
That has some workers and their financial advisers angling to try and get at least some of the money out before the break-up. DuPont has an interest in minimizing its longterm liability.
"I wouldn't want to take the cash up front," Skaggs told me. "Once you start paying me a pension, you can't offer me the buyout -- the government made it illegal because people [at other companies] took those payments and spent it all and went broke."