On January 20, 2026, Intermountain Health’s Board of Trustees announced that the pension plan will be frozen effective December 31, 2026. If you’re one of the roughly one-third of Intermountain caregivers with a pension benefit, you’re now facing a set of decisions that will shape your retirement income for decades.
This guide is designed to walk you through exactly what’s happening, what it means for you personally, and what you should be thinking about — all in plain language. After meeting with some Intermountain caregivers regarding their retirement planning, here are some of the most common questions we are hearing and will discuss here.
The most important thing to know right away: you are not losing what you’ve earned. Your pension benefit is fully funded, legally protected under federal law, and held in a trust. The freeze stops future accrual — it does not take anything away from you that you’ve already earned.
But that doesn’t mean there’s nothing to do. In fact, you now have several decisions in front of you that deserve careful attention.
What Does “Frozen” Actually Mean?
When a pension plan is “frozen,” it means employees stop earning new pension benefits after a specific date. In Intermountain’s case, that date is December 31, 2026.
Here’s what freezing does and doesn’t do:
What the freeze does:
It stops the accumulation of new pension credits after 12/31/2026. After that date, your years of service and salary increases will no longer increase your pension benefit. You’ll transition fully to a 401(k)-based retirement program.
What the freeze does not do:
It does not reduce, remove, or change the pension benefit you’ve already earned. Everything accrued through December 31, 2026 is yours, fully funded, and legally protected under the Employee Retirement Income Security Act (ERISA). The funds are held in a dedicated pension trust that cannot be used for anything other than paying benefits to caregivers.
This is an important distinction. Intermountain has been clear that the plan is being frozen, not terminated. A frozen plan continues to exist and hold your benefit until you’re eligible to take it. A terminated plan would pay out all benefits and close entirely — that is not what’s happening here.
Your pension benefit will continue to be accessible to you when you meet the plan’s distribution criteria: when you leave Intermountain, when you retire, or (under a new provision starting in 2027) when you reach age 59.5 and elect a distribution while still employed.
Am I Affected?
Not every Intermountain caregiver has a pension. The plan was closed to new participants effective April 4, 2020, which means:
You have a pension if you were hired before April 4, 2020 and were not part of an acquisition that occurred after that date (for example, Classic Air Medical or HealthCare Partners Nevada employees who came to Intermountain through a merger or acquisition after April 4, 2020 do not have a pension).
You do not have a pension if you were hired, rehired, or acquired after April 4, 2020. If you’re in this group, you’re already in the 401(k)-only retirement program and receive the automatic 2% employer contribution.
Approximately two-thirds of Intermountain’s current workforce does not have a pension benefit. The remaining one-third — roughly the caregivers who have been with the organization the longest — are the ones affected by the freeze.
If you’re not sure whether you have a pension, log into PensionConnect at intermountain.ehr.com/Pension. If you have a pension benefit, you’ll be able to see your current balance and payout options.
What’s Changing After December 31, 2026
Several things change on or after the freeze date. Here’s a clear timeline:
Now Through December 31, 2026
You continue earning pension benefits as normal. Your benefit continues to grow based on your years of service and compensation. There is no immediate action required.
This is a planning window. Use this time to understand your options, gather your numbers, and think through your decisions.
January 1, 2027
Three things happen on this date:
First, pension accrual stops. You will no longer earn new pension credits.
Second, pension-eligible caregivers become eligible for Intermountain’s automatic 2% employer contribution to the 401(k). This is money Intermountain puts into your 401(k) account regardless of whether you contribute — it’s separate from the 4% match on your own contributions. Combined, Intermountain can contribute up to 6% of your pay each year to your 401(k). The 2% contribution is deposited at the end of each year.
Third, caregivers who are 65 or older and still actively working at Intermountain can begin accessing their pension benefit without any stipulations. Before this change, caregivers 65 and older who were still working needed to reduce their hours before they could start receiving pension payments. That requirement is being removed.
March 2027
Caregivers between ages 59.5 and 65 who are still actively working at Intermountain can access their pension benefit early. This means you can elect either monthly payments or a lump-sum distribution of your earned benefit while continuing to work at Intermountain. You can also choose to leave your benefit in the plan until you’re ready.
This is a significant new provision. Previously, the only way to access your pension while still employed was to be 65 or older and reduce your hours. The freeze is being accompanied by more flexible access options for active employees.
January 1, 2030
This is the eligibility milestone for the Retiree Medical Savings Account (RMSA). Pension-vested caregivers who remain employed at Intermountain through this date and subsequently retire at age 63 or older become eligible for a $50,000 Intermountain-funded RMSA — a tax-advantaged account that can be used for medical expenses in retirement, including insurance premiums.
Both conditions must be met: employed through 1/1/2030 and retirement at age 63+. If you leave before 2030 or retire before 63, you do not qualify.
Your Pension Payout Options
When you become eligible to take your pension — whether at retirement, upon leaving Intermountain, or through the new in-service distribution options starting in 2027 — you’ll generally have three choices:
Lump Sum
A one-time payment of the full present value of your pension benefit. This is the option that gives you the most control and portability. You can roll it into an IRA, a Roth IRA, your Intermountain 401(k), take a cash lump sum, or another eligible retirement plan.
The lump-sum amount is not arbitrary — it’s calculated using IRS-prescribed interest rates and mortality tables, which means it can change from one year to the next (more on this below).
Single Life Annuity
A fixed monthly payment for the rest of your life. This is typically the highest monthly payment option because the plan only needs to pay for one lifetime. However, payments stop completely when you die — there is no benefit to a surviving spouse or beneficiary.
10-Year Certain & Life Annuity
A monthly payment for the rest of your life, with a guarantee that payments will continue for at least 10 years. If you pass away before the 10-year period ends, your designated beneficiary continues to receive the monthly payments for the remainder of that period. The monthly amount is lower than the single life annuity because of this added protection.
A Note on Spousal Consent
If you are married and elect any form of benefit other than a Qualified Joint & Survivor Annuity with your spouse as the beneficiary, you will need to obtain spousal consent at the time of retirement or distribution. This is a federal requirement and it applies to lump-sum elections as well. Make sure your spouse is part of the conversation.
How Interest Rates Affect Your Lump Sum
This is one of the most misunderstood aspects of pension distributions, and it’s worth understanding clearly.
Pension lump-sum values are calculated using a “present value” formula that relies on IRS segment interest rates. These rates change periodically, and they have a direct, inverse relationship with your lump-sum amount:
When interest rates go up, your lump-sum value goes down. This is because the plan needs less money today to fund the same future monthly benefit when it can assume a higher rate of return on that money.
When interest rates go down, your lump-sum value goes up. The plan needs more money today to fund the same future benefit when the assumed rate of return is lower.
Intermountain’s own plan documents explicitly call out this relationship and encourage employees to model how changes in interest rates affect their payout.
What does this mean practically? It means the lump-sum value you see in PensionConnect today is not guaranteed to be the same six months or a year from now. If interest rates rise meaningfully between now and when you take your distribution, your lump sum could be lower. If rates fall, it could be higher.
This doesn’t mean you should try to “time” your distribution based on rate predictions — that’s speculative and usually not a sound strategy. But it does mean that understanding the current rate environment is one more input in your decision, and it’s worth discussing with a financial advisor who can help you assess whether the current value is favorable for your situation.
The Tax Decision: Rollover vs. Cash Out
If you choose the lump sum, the next decision is how you receive it. This is arguably one of the most consequential tax decisions about your pension you’ll make, and getting it wrong could potentially cost thousands in unnecessary taxes.
Option A: Direct Rollover
With a direct rollover, the money moves straight from the pension trust to another retirement account — your IRA, Roth IRA, Intermountain 401(k), or another eligible plan. You never touch the funds, and there is no immediate tax withholding (for a traditional IRA or 401(k) rollover).
If you roll into a Roth IRA, the amount is taxable as income in the year of conversion, but it can grow tax-free and qualified withdrawals in retirement are also tax-free.* This can be a powerful strategy, but it requires planning — especially if the lump sum is large enough to push you into a higher tax bracket. Partial Roth conversions spread over multiple years can help manage the tax impact.
*Roth withdrawals are tax-free after age 59-1/2, and the account has been open for at least 5 years.
Option B: Direct Distribution (Cash Out)
With a direct distribution, the check is made payable to you. Before you receive a dollar, the plan is required to withhold 20% for federal income taxes. Depending on your state, additional state tax may be withheld as well.
If you’re under age 59½, you may also owe a 10% early withdrawal penalty on top of the income tax.
A hypothetical example: On a $125,000 lump sum, a direct distribution means roughly $25,000 is withheld immediately for federal taxes. If you’re under 59½ and owe the 10% penalty, that’s another $12,500. Add state taxes, and your net could be $75,000–$85,000 — a loss of $40,000–$50,000 compared to a direct rollover where the full $125,000 stays in your retirement account.
The critical detail is requesting a direct rollover. If you receive the check yourself (an “indirect” rollover), you have 60 days to deposit the full amount into a retirement account — but the plan still withholds 20%. You’d need to come up with that 20% out of pocket to complete the rollover. If you miss the 60-day window, the entire amount becomes taxable and potentially subject to the penalty.
Always specify a direct rollover in writing. It’s the single most important instruction you’ll give.
What About Your 401(k)?
The pension freeze doesn’t affect your existing 401(k) account. Your balance, your contributions, and the employer match all continue as before.
What does change is the addition of the automatic 2% employer contribution starting January 1, 2027. This is a new benefit for pension-eligible caregivers — the two-thirds of the workforce who don’t have a pension have been receiving this contribution already.
Combined with the 4% match on your own contributions, Intermountain can now contribute up to 6% of your pay each year to your 401(k).
However, for many mid-to-late career caregivers, the 401(k) employer contributions may not fully replace the pension accrual you’re giving up. Whether the gap is meaningful depends on your age, salary, years of service, existing savings, and planned retirement date. This is one of the most important calculations to do — and the sooner you do it, the more time you have to adjust your contribution rate, take advantage of catch-up contributions (if you’re 50+), or explore other savings vehicles.
Common Myths and Misconceptions
Intermountain has published a “Pension Myths” resource addressing common misunderstandings. Here are the ones we hear most often from caregivers we’re working with:
“My pension will automatically roll into my 401(k) on January 1, 2027.”
No. Under ERISA, your pension benefit cannot roll into a 401(k) or IRA simply because the plan froze. Your benefit stays in the pension trust until you meet the plan’s distribution criteria — leaving Intermountain, retiring, or being 59.5+ and electing a distribution (starting in 2027). Nothing happens automatically.
“My pension earns interest.”
No. A pension benefit is not like a savings account. Once the plan is frozen, the age-65 benefit amount stays the same. If you’re under 65 and the amount in PensionConnect appears to increase over time, that’s because the tool is showing you a projection to age 65 — not new earnings or interest. The available amount grows by approximately 5% per year as you approach your normal retirement age. Starting payments before age 65 would result in a reduced amount.
“The money in the pension isn’t really secure.”
It is. Frozen pension benefits are legally protected under ERISA and held in a trust that cannot be used for any purpose other than paying benefits to caregivers. If something were to happen to Intermountain, the Pension Benefit Guaranty Corporation (PBGC) — a federal agency — would step in to guarantee benefit payments up to legal limits. Intermountain also publishes an annual pension funding notice; the 2024 notice is available on MyIntermountain and the 2025 notice will be released in April.
“I’m experiencing a pay decrease.”
Not exactly. A pension benefit is a promise of future income at retirement — it’s not part of your current paycheck or take-home pay. The freeze does not reduce your salary, health benefits, paid time off, or any other current compensation. However, it does mean that part of your long-term total compensation picture is changing, and it’s worth reviewing your 401(k) contribution strategy in light of that change.
“The math says I’m losing millions of dollars.”
This one comes up when people use online calculators or AI tools to estimate the value of a lifetime pension benefit as a single dollar figure. Those calculations typically assume decades of future payments, inflation, and life expectancy — small changes in those assumptions can dramatically inflate the number. It doesn’t mean you’re “losing” that amount. Understanding how pension benefits are actually calculated (based on a formula involving age, years of service, and salary) helps put the numbers in proper perspective.
What You Should Do Right Now
Intermountain has said there is no immediate action required, and that’s true — the freeze doesn’t take effect until the end of 2026. But “no immediate action required” is different from “nothing you should be doing.”
Here’s what we’d recommend:
Log into PensionConnect and review your numbers. Look at your lump-sum value, your monthly annuity options, your 401(k) balance, and your retirement profile settings. Model different retirement ages to see how your benefit changes. The more familiar you are with your own numbers, the better your decisions will be.
Don’t make any hasty decisions. You have time. The worst thing you can do is panic and make a rash choice — especially around cashing out a lump sum without understanding the tax implications. Use this window to learn, plan, and get advice.
Talk to a financial advisor. Intermountain’s retirement team can explain how the plan works, but they’ve said directly that they cannot give you personalized financial or tax advice. That’s the role of an independent financial professional who can look at your complete picture — pension, 401(k), Social Security, savings, taxes, healthcare needs, and retirement timeline — and help you make decisions that are right for your specific situation.
Factor in the RMSA. If you’re vested and think you might qualify for the $50,000 Retiree Medical Savings Account, understand the requirements (employed through 1/1/2030, retire at 63+) and factor that into any decisions about your timeline.
Consider adjusting your 401(k) contributions. The sooner you evaluate whether the new 401(k) employer contributions close your retirement savings gap, the more time you have to make adjustments if they don’t.
How Teton Wealth Group Can Help
We’re a Utah-based independent financial advisory firm with offices in Murray, St. George, and Kamas. We specialize in retirement income planning, and since the pension freeze announcement, we’ve been working with Intermountain caregivers across the state to help them navigate these decisions.
We’re offering a no-cost IHC Pension Freeze Impact Review — a 15–30 minute conversation where we walk through your specific numbers and give you clarity on your options. You’ll walk away with:
A Payout Options Snapshot — your lump sum vs. annuity options compared side by side
A Rollover & Tax Checklist — to help ensure you don’t leave money on the table
A Retirement Gap Estimate — showing what changes after the freeze and what you can do about it
There’s no cost and no obligation. We’re not affiliated with Intermountain Health — we’re independent advisors who want to make sure every caregiver who needs help gets it.
Schedule Your No-Cost IHC Pension Freeze Impact Review →
You can also download our Intermountain Pension Freeze Decision Checklist — a step-by-step guide that walks through all six major decision areas — at creativeo1.sg-host.com/ihc.
