Did Dow transfer my pension to an insurance company?

Yes. Dow Inc. has executed at least one pension risk transfer, buying a group annuity contract from Metropolitan Tower Life Insurance (a MetLife subsidiary) to transfer approximately $700 million in U.S. pension obligations. Participants whose benefits were included in that transfer are no longer covered by PBGC federal insurance. Their monthly payments are now backed by Metropolitan Tower Life's reserves and applicable state insurance guaranty fund protections — typically $250,000 per insurer per insured, which is not equivalent to the PBGC's $7,789.77/month guarantee cap at age 65. If you received a letter indicating your benefits transferred to Metropolitan Tower Life, you are in the affected group.

How does Dow calculate my pension lump sum?

The calculation method depends on which component of the Dow Employees' Pension Plan (DEPP) covers your benefit. The DEPP Component (traditional pension equity formula) uses IRS §417(e)(3) segment rates to discount your projected monthly annuity to a present value. The PPA Component (Personal Pension Account — a cash-balance-like account) calculates lump sums differently: your PPA balance is essentially your lump sum, adjusted using interest rate assumptions that Dow sets annually using a January 1 through December 31 look-back period. This annual lock-in is unique; most corporate plans use November segment rates that shift monthly. Your Summary Plan Description specifies which component covers your benefit.

What happened to the Rohm and Haas pension after Dow acquired them?

When Dow acquired Rohm and Haas in 2009, Rohm and Haas employees' pension obligations were eventually integrated into Dow's pension structure. The Rohm and Haas Company Retirement Plan was formally merged into the Dow Employees' Pension Plan on December 30, 2015. In 2025, Dow issued special lump sum election notices to former Rohm and Haas participants — both active employees and deferred vested terminated (DVT) participants — offering a one-time election window to choose between a lump sum payment, immediate monthly annuity, or deferral to a later date. The election deadline for active former Rohm and Haas participants was August 29, 2025.

Does the Dow Savings Plan Rule of 55 survive an IRA rollover?

No. Under IRC §72(t)(2)(A)(v), if you separate from Dow in the calendar year you turn 55 or later, you can take penalty-free withdrawals from the Dow Savings Plan without waiting until 59½. This exception is specific to qualified plan distributions and does not carry over to an IRA. If you roll the Dow Savings Plan to an IRA after separation, withdrawals before age 59½ face the standard 10% early-distribution penalty unless you set up a 72(t) SEPP schedule or qualify for another exception. Do not roll the Savings Plan to an IRA before age 59½ unless you are certain you will not need penalty-free access in the interim.

What is the DEPP Personal Pension Account (PPA) and how does the lump sum work?

The DEPP Personal Pension Account is a cash-balance-style component of the Dow Employees' Pension Plan. Unlike a traditional defined-benefit pension — where your benefit is expressed as a monthly annuity and the lump sum is derived by discounting that annuity — the PPA is structured as a notional account balance that grows with employer pay credits and interest credits each year. Your PPA lump sum is effectively your account balance. The interest rate assumptions used to calculate PPA annuity conversions (if you want monthly income instead of a lump sum) are set annually for the January 1–December 31 period, rather than shifting monthly with IRS segment rate releases as traditional pension lump sums often do.

What were the 2025 Rohm and Haas lump sum election options?

In 2025, Dow issued lump sum election notices to former Rohm and Haas employees who were active participants or deferred vested terminated (DVT) participants in the DEPP. Three options were available: (1) Lump Sum Payment — receive your full pension benefit as a single cash distribution or direct rollover to an IRA, (2) Immediate Monthly Annuity — begin collecting monthly payments immediately, and (3) Defer Payment Until Later — leave the benefit in the plan to collect at a future date. The election deadline for active former Rohm and Haas participants was August 29, 2025. Interest rate assumptions for 2025 PPA lump sums were lower than 2024 assumptions, which in general produces a larger lump sum in a lower-rate environment.

What should I do with my Dow pension lump sum rollover?

Once you execute a direct rollover to a traditional IRA, you have several planning decisions to make. First, build an investment strategy that accounts for the pension as a fixed-income equivalent — if you kept an annuity from Dow or have Social Security, you may be able to allocate more aggressively in your rollover IRA. Second, model a Roth conversion strategy to fill lower tax brackets before required minimum distributions begin at age 73 or 75 (SECURE 2.0). Third, manage IRMAA exposure — large Roth conversions or RMDs can push you into Medicare surcharge tiers starting at $109,000 (single) or $218,000 (MFJ) in 2026. A fee-only advisor can sequence these decisions across the 10-15 year window between rollover and first RMD.

Dow Chemical / Dow Inc. Pension Lump Sum vs. Annuity: A 2026 Guide for Dow Employees

Dow Inc. (formerly The Dow Chemical Company) is one of the largest chemical companies in the world, with approximately 35,000 U.S. employees and a substantial defined-benefit pension program covering current and former employees across its materials science, packaging, and industrial solutions divisions. The Dow Employees' Pension Plan (DEPP) is structured in two distinct components — a traditional pension equity formula and a Personal Pension Account (PPA) — and also covers former employees of Rohm and Haas (acquired 2009) and Union Carbide (acquired 2001) through integrated sub-components. Dow has executed at least one pension risk transfer, buying a group annuity contract from Metropolitan Tower Life Insurance to transfer approximately $700 million in U.S. pension obligations — ending PBGC federal insurance for the affected participant group and shifting their backstop to state insurance guaranty funds.¹ For current and former Dow employees evaluating whether to take a lump sum or monthly annuity, these plan mechanics, the interest-rate environment, and the Dow Savings Plan Rule-of-55 trap all shape the decision.

Who this guide is for: Current and former Dow Chemical / Dow Inc. employees — including legacy Rohm and Haas and Union Carbide employees whose benefits are now administered under the DEPP — who have an accrued defined-benefit pension benefit and are evaluating whether to take a lump sum at retirement or separation. Also relevant for former Rohm and Haas participants who received the 2025 lump sum election notice, and for Dow retirees managing a pension rollover IRA.

Dow's pension risk transfer to Metropolitan Tower Life: what it means for you

Dow Inc. has executed a pension risk transfer (PRT) — the mechanism by which employers permanently reduce pension balance-sheet risk by purchasing a group annuity contract from an insurance company that then assumes direct responsibility for paying benefits to affected participants.¹

The transaction: Dow purchased a group annuity contract from Metropolitan Tower Life Insurance Company, a subsidiary of MetLife, to transfer approximately $700 million in U.S. pension liabilities.¹ Participants whose benefits were included in this transfer received written notification from Dow or the insurer. For that participant group:

Monthly payments continue uninterrupted. Metropolitan Tower Life took over exactly where Dow left off. Payment amounts, survivor elections, and benefit terms did not change at the time of transfer.
PBGC federal insurance ended entirely. Once pension obligations transfer to an insurance company, the PBGC guarantee — which covers up to $7,789.77/month at age 65 in 2026² — no longer applies. The backstop is now Metropolitan Tower Life's own financial reserves.
State insurance guaranty funds apply instead. Most states guarantee annuity obligations up to $250,000 per insurer per insured, with some states higher. This is not equivalent to PBGC protection for participants with large monthly benefits.

To put Dow's transfer in context with other major corporate pension risk transfers:

Employer	PRT amount	Insurer	PBGC protection after transfer
IBM	~$22B total	Prudential / MetLife	Ended; state guaranty fund
AT&T	$8.05B	Athene	Ended; state guaranty fund
Verizon	~$13.4B total	Prudential / RGA	Ended; state guaranty fund
Lockheed Martin	~$9.2B total	Athene	Ended; state guaranty fund
RTX / Raytheon	$2.5B	Prudential	Ended; state guaranty fund
Dow Inc.	~$700M	Metropolitan Tower Life	Ended for transferred group; intact for remaining participants

Participants who were not included in the Metropolitan Tower Life transfer retain their PBGC protection on the remaining benefit. For those participants, the lump-sum decision involves weighing the benefit of keeping PBGC coverage (on benefits up to the $7,789.77/month cap) against the benefit of taking the lump sum and managing it independently.

Dow's pension plan structure: DEPP Component, PPA, Rohm and Haas, and Union Carbide

The Dow Employees' Pension Plan (DEPP) is structured in two distinct components, and not all participants are covered by both:

DEPP Component — traditional pension equity formula

The DEPP Component is a traditional defined-benefit formula. Your benefit is expressed as a monthly annuity based on your pay history and years of service. If you elect a lump sum, the plan converts your monthly annuity to a present value using IRS §417(e)(3) segment rates — the same methodology used by virtually every large corporate defined-benefit plan. Higher segment rates compress the lump sum; lower rates expand it.

PPA Component — Personal Pension Account

The PPA Component is a cash-balance-style account. Rather than a formula-based monthly annuity, the PPA credits your account each year with employer pay credits and interest credits. Your PPA lump sum is effectively your accumulated account balance. If you want monthly income instead of a lump sum, the plan converts your account balance to an annuity using plan-specific actuarial assumptions.

The PPA has a critical distinction from traditional DEPP-formula lump sums: the interest rate assumptions used to calculate PPA amounts are set annually for the January 1 through December 31 period.³ Most large corporate plans use November segment rates — meaning the rates published each November set lump sum offers for the entire following calendar year. Dow's PPA uses a January-through-December lock that means your PPA offer is stable throughout the year but can shift meaningfully between years as interest rate assumptions are reset. In 2025, Dow's PPA interest rate assumptions were lower than 2024 assumptions, which in general produces a larger PPA lump sum — a factor that made 2025 a favorable time window for Rohm and Haas participants offered a lump sum election.

Rohm and Haas legacy participants

Dow acquired Rohm and Haas Company in 2009. The Rohm and Haas Company Retirement Plan was formally merged into the Dow Employees' Pension Plan on December 30, 2015.³ Former Rohm and Haas employees whose pension benefits were part of that plan are now covered as a sub-component within the DEPP, with benefit calculations reflecting their Rohm and Haas service and compensation history.

Union Carbide legacy participants

Dow acquired Union Carbide Corporation in 2001. The Union Carbide Employees' Pension Plan continues to exist as a separate qualified plan for former Union Carbide employees, maintained alongside the DEPP. Former Union Carbide employees should identify which plan covers their benefit — the DEPP or the Union Carbide plan — before modeling lump sum numbers, as plan terms and distribution mechanics may differ.⁴

The 2025 Rohm and Haas lump sum election window

In 2025, Dow issued special lump sum election notices to two groups of former Rohm and Haas participants within the DEPP:

Active former Rohm and Haas participants: Current Dow employees who had legacy Rohm and Haas pension benefits were given a one-time election window. The deadline to make an election was August 29, 2025.³
Deferred vested terminated (DVT) participants: Former Dow/Rohm and Haas employees who left the company before retirement and retained a deferred vested pension benefit also received election notices with a similar window to choose a distribution form.

Three options were available in the election:

Lump Sum Payment: Receive the full present value of your pension benefit as a single cash distribution or direct rollover to a traditional IRA, Roth IRA, or other eligible retirement plan. A direct rollover avoids the 20% mandatory federal withholding that applies to cash distributions.
Immediate Monthly Annuity: Begin collecting monthly pension payments immediately, with survivor election options (joint-and-survivor, period-certain).
Defer Payment Until Later: Leave the benefit in the plan for distribution at a future date, subject to the plan's normal commencement rules.

If you missed the August 2025 deadline: The special election window for active and DVT Rohm and Haas participants has closed. However, your benefit remains in the plan and is still payable at normal retirement age under the plan's standard distribution rules. Your current options depend on your employment status and the specific plan terms. Contact Dow Benefits at the number on your Summary Plan Description to confirm your current distribution options.

If you elected the lump sum and received your distribution in late 2025 or early 2026, you are now in the rollover management phase. See the post-rollover strategy section below.

How interest rates affect Dow pension lump sums: the January look-back

For participants in the DEPP Component (traditional pension equity formula), lump sums are calculated using the standard IRS §417(e)(3) three-segment methodology:

Segment 1 — applies to the first five years of projected annuity payments (near-term cash flows, lowest rate).
Segment 2 — applies to years 6 through 20 (intermediate-term).
Segment 3 — applies to years 21 and beyond (long-dated cash flows, highest rate).

Higher rates produce smaller lump sums; lower rates produce larger ones. Most large corporate plans use November's published segment rates to set the following year's lump-sum offers. For reference, the November 2025 segment rates — which set many employers' 2026 lump sum offers — were 4.07% / 5.15% / 6.01%.⁵ These rates are materially higher than the 2020–2021 near-zero environment, which means lump sums today are smaller relative to annuity benefits than they were five years ago.

For PPA Component participants, the mechanics differ. Dow sets PPA interest rate assumptions on a January 1 through December 31 calendar-year basis.³ This means:

Your PPA lump sum offer is stable throughout the year — it does not shift month to month as IRS rates are published.
Rate changes take effect at year-end when Dow resets the annual assumption.
Unlike November-look-back plans where choosing a December vs. January retirement date can swing the offer by tens of thousands of dollars, Dow PPA participants face a different timing dynamic: the important date is the calendar year, not the month within the year.

In 2025, Dow's PPA interest rate assumptions were lower than 2024 assumptions. In a lower-rate environment, the PPA lump sum is larger — because the conversion of the account balance to an annuity or the present-value calculation runs at a lower discount rate. This favorable rate environment was part of the context for the 2025 Rohm and Haas lump sum election window.

The Dow Savings Plan Rule-of-55 trap

Many Dow employees and retirees have significant balances in the Dow Savings Plan (the company's 401(k)-style defined contribution plan). The Rule of 55 under IRC §72(t)(2)(A)(v) provides a critical but widely misunderstood exception to the 10% early-distribution penalty:

What it allows: If you separate from Dow in or after the calendar year you turn 55, you can take penalty-free withdrawals from the Dow Savings Plan before age 59½.
What it does NOT allow: This exception is specific to distributions from the qualified plan where you separated from service. It does not transfer to an IRA. If you roll the Dow Savings Plan balance to an IRA before age 59½, withdrawals from that IRA face the standard 10% early-distribution penalty (unless you set up a 72(t) SEPP or qualify for another exception).

Critical decision point: If you are under 59½ and may need to draw on your retirement savings before that age, do not roll the Dow Savings Plan to an IRA until you reach 59½. Keep it in the Dow plan (or roll it to a new employer's qualified plan) to preserve the Rule-of-55 exception. This is one of the most expensive mistakes in pension rollover planning — once the rollover is executed, the exception is permanently lost on those funds.

This consideration is separate from the pension lump sum rollover. Rolling your DEPP lump sum to an IRA does not affect the Dow Savings Plan's Rule-of-55 eligibility — the two accounts are tracked separately. The trap occurs only if you also roll the Savings Plan itself to an IRA before 59½.

Lump sum vs. annuity: the Dow-specific decision framework

Dow's pension situation involves several factors that make the standard lump-sum vs. annuity framework more nuanced:

Factor	Favors lump sum	Favors annuity
PBGC transfer risk	If your benefit transferred to Metropolitan Tower Life, counterparty exposure makes lump sum + IRA rollover more appealing	Benefits still in the DEPP retain PBGC coverage (up to $7,789.77/mo cap) — a federal backstop the lump sum forfeits
Benefit size	Benefits above $7,789.77/mo at 65 have no PBGC backstop anyway; lump sum eliminates insurer risk	Smaller benefits are fully PBGC-covered; guaranteed income is valuable if you lack other fixed income
Other income	Strong Social Security, spouse's pension, or rental income covers baseline expenses — the lump sum's investment flexibility adds value	Limited other guaranteed income — the annuity fills the income gap
Health / longevity	Below-average life expectancy or family history of early death makes the lump sum more likely to win	Above-average longevity expectation — annuity provides longevity insurance past break-even age
Rate environment	Rising rate environment (segment rates going up) compresses future lump sums — taking the lump sum now locks in a higher value	If rates decline further, annuity offer grows in present-value terms; waiting can increase the annuity-implied yield
Roth conversion opportunity	Rolling to an IRA enables a 10-15 year Roth conversion window before RMDs begin — significant tax value for large balances	Annuity produces fixed monthly income with no conversion flexibility; RMDs from any rolled IRA still apply to other accounts
Heirs / estate	Lump sum leaves remaining balance to heirs; annuity typically ends at death or surviving spouse's death	Period-certain election provides some death benefit; no investment risk for surviving spouse

The decision involves present-value math, longevity modeling, tax sequencing, and Dow-specific plan rules. A fee-only advisor who has modeled this decision many times — and has no commission incentive to push the lump sum — can quantify which option is better for your specific numbers. Match with a pension rollover specialist →

Post-rollover IRA strategy for Dow employees

If you took the DEPP lump sum and rolled it to a traditional IRA, the planning work is just beginning:

Investment allocation: the pension-as-bond insight

If you kept a Dow annuity (monthly pension income), a Dow COLA supplement, or have Social Security income, that fixed income functions like a bond in your overall portfolio — it provides stable, predictable cash flow regardless of market conditions. This means your rollover IRA can often carry a higher equity allocation than traditional age-based rules suggest, because your "bond" exposure is already built into your guaranteed income. Many retirees with strong pension income systematically under-invest their rollover IRA.

Roth conversion window: ages 60–72

After rolling the pension lump sum to a traditional IRA, you typically have a window of 10-15 years before required minimum distributions begin at age 73 (born 1951–1959) or 75 (born 1960+) under SECURE 2.0. During this window, strategic annual Roth conversions — filling the 22% or 24% bracket — can materially reduce lifetime taxes and RMDs. The 2026 brackets: 22% bracket tops out at $105,700 (single) or $211,400 (MFJ); 24% bracket tops out at $201,775 (single) or $403,550 (MFJ).⁶

Convert too aggressively and you push into the 32% or 35% bracket and may trigger IRMAA Medicare surcharges. Convert too conservatively and you leave future RMDs to be taxed at potentially higher rates. An advisor can model the optimal annual conversion target.

IRMAA management

Medicare Part B and Part D surcharges (IRMAA) kick in at $109,000 MAGI (single) or $218,000 (MFJ) in 2026, adding $974–$11,688/year in combined Part B and Part D surcharges for a couple across the five IRMAA tiers.⁷ Roth conversions, large IRA distributions, or RMDs can push you across IRMAA thresholds. If your pension annuity income is near or above the first IRMAA threshold, plan Roth conversions carefully to avoid compounding surcharges.

The 20% withholding trap

If you elected a cash distribution rather than a direct rollover, the plan is required to withhold 20% for federal income tax. To complete a tax-free rollover you must deposit 100% of the gross distribution (including the withheld 20%) into an IRA within 60 days. You must fund the withheld 20% from other sources. Missed rollovers or partial rollovers are fully taxable in the year of distribution — at ordinary income rates, potentially pushing a large lump sum into the 32–37% bracket. Always use a direct rollover (trustee-to-trustee) to avoid this entirely.

Dow pension risk transfer to Metropolitan Tower Life: "Dow buys annuity from Metropolitan Tower Life to transfer pension liabilities," Pensions & Investments.
PBGC maximum guarantee for 2026: PBGC — Your Guaranteed Pension (Single-Employer Plans). Straight-life at age 65: $7,789.77/month.
Rohm and Haas plan merger date, PPA look-back period, and 2025 election window: Dow Inc. HR documentation — "2025 Active Employee Lump Sum Notice" and "2025 DVT Employee Lump Sum Notice" for former Rohm and Haas Company Retirement Plan participants. Available at corporate.dow.com HR resources.
Union Carbide Employees' Pension Plan annual funding notices: corporate.dow.com — HR documents, "Annual Funding Notice for Union Carbide Employees' Pension Plan."
IRS §417(e) minimum present value segment rates — November 2025 (4.07% / 5.15% / 6.01%): IRS Notice 2026-XX; verified via IRS.gov minimum present value segment rates.
2026 federal income tax brackets: IRS Rev. Proc. 2025-32.
2026 IRMAA thresholds and Part B premium amounts: CMS Medicare & Medicaid Services; base premium $202.90/month in 2026.

Values verified as of October 2026. Tax law and PBGC guarantee amounts adjust annually. Consult your Dow Summary Plan Description and a qualified tax advisor for your specific situation.