Most likely I will get chopped tomorrow. I qualify for the MTP but rip off is they tax you on the 100% of your severence pay, which is 33.65% (part of it and after ss limit of 137,700 for the year) comes down to 29.45% in Taxes. Basically in my case I calculated it comes to roughly taking $45K (after taxes) cut in my severence pay to get the MTP. Is it worth to pay $45K to get Retirement Benefit (I am 53 years old)?
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I was laid off in March, 52. I had thought I qualify for MTP based on combo years of service and age to get to 75. They changed MTP. Minimum age is 55....And no it’s not worth it either way. Once you turn 65 you get $2500 HSA/year toward Medicare and are off the corporate plan. (Another lil tidbit hidden behind ‘lifetime’ benefits)
BTW.....there are zero exceptions for meeting MR75 NCS anniversary dates....
Net Credited Service is determined by the date of hire....so layed off or surplused prior to your NCS date, there are zero exceptions to bridge the gap...even if it's one day (example...started Jan.1 of 20th year, with NCS of 7/1 but off the books and last day of work on 6/31...your Net Credited Service is still only 19 years.)
These are the current Modified rule of 75:
Age and service must equal 75, and you must be a minimum of 50 years old with one exception — you qualify for retiree benefits when you have 30 years of net credited service at any age. You qualify if you are:
50 years old with 25 years of service
55 years old with 20 years of service
65 years old with 10 years of service
or any age with 30 years of service
HR Person is WRONG! T follows the modified rule of 75–all references to 65 in HR Person’s post are incorrect.
Troll.
If you are separating and you are within 24 months of qualifying for retirement (55 + years of service = 65; age + 20 years of Service = 65; or 30 yers of service), you will qualify for MTP; provided your job is outsourced and you accept the position with the new company. You will also be required to waive severance.
So please be sure to check this out. Don’t go with the assumption that you’ll qualify.
There’s certainly better life outside AT&T.
MTP...Is the manager transition plan....its for managers that are within 24 months of the Magic Rule 75 calculation of age/years service number to retire.
If you have already met the MR75 number, you don't qualify for MTP.
If you qualify....they will allow you to retire but it will cost you 50% of any severance offered...and it's still taxed at around 40%.(example....100k salary=50k severance=25k MTP...minus taxes leaves only a 12-14k payout)
It allows you access retirement benefits only (discount cell/tv/internet)....it does not bridge any pension gap.
If you don't qualify for medical subsidies (most won't...subsidizing stopped if you were hired after about 1995) then after COBRA ends, you will have to pay 100% of the medical cost of your current plan.
Its a useless plan unless your after employment medical cost are significantly higher than your 100% MTP portion....that is the only benefit
Just don't midunderstand the Managament Transition Plan to imply that you get to Retire if you are within 24 months of normal retirement when you get the axe. The MTP only allows you to get the discount off of your services and there is no guarantee that you get it for life like a retiree. The MPT DOES NOT give you the status of RETIREMENT. This matters a lot, because level 3 people who have stock grants still get paid for those grants on a pro-rated basis after they retire, but not when they simply separate. If someone thinks the MTP equals retirement, they will be sad to find out that is not the case.
The subsidized coverage fo a family for bronze plan is like $400 per month.
“Is it worth to pay $45K to get Retirement Benefit (I am 53 years old)?”
The short answer is “Maybe Not”.
Compare the company Health insurance premium upon retirement with the ACA premium and then decide.
My insurance for me and spouse is 1800 per month under Obama care. I did not qualify for medical insurance but I wish I had. Cant find a job that pays good money or has good insurance but I only have 15 months till Medicare. Good luck
No you can find better services and cheaper elsewhere when you leave even with your discount.
Note: It is no longer as difficult as it used to be to tell whether or not you are eligible for subsidized medical or not. Simply go to HR One Stop, then Money, Compensation, and then check out your YTR statement. It answers that question for you now "Medical Benefits In Retirement".
You can also model the cost to you there on HR One Stop. Even with subsidy, it is far from cheap.
With "access only" (i.e. you foot the whole bill) there is no point on forfeiting any severance pay for MTP. You can do better on the open market or through ACA coverage.
Even with a competent financial advisor its a tough call. You have got 12 years before Medicare kicks in. That's 144 months that you might have to pay for insurance on your own nickel and at maybe $1,000 a month for family coverage - well you can do the math.
On the flip side if you do get another job with reasonable health care coverage then it's a different story.
Also, keep in mind that JS promised earlier this year that retiree health care coverage would be the same coverage but different delivery. That's JS speak for less is more.
I know much uncertainty but I do wish you the best of luck!!!
MTP = Management Transition Program. Allows eligible employees to bridge the gap to retirement benefits if they are within 24 months of retirement eligibility (Mod Rule of 75.) Downside is that this costs almost all of the severance money you might have received otherwise.
Also, echoing @dad, absolutely correct! If you don't qualify for subsidized benefits, and you have to pay for 100% of the contributions, then there is not much point in giving up severance pay.
I was eligible for MTP last year when they outsource our group. I was eligible for insurance access and the cost for Silver family plan is $2346/month, no subsidize. You need to find what insurance subsidize you're eligible. I know it is very hard to find this information, but if you get surplus they will send your specific benefit package.
What is mtp?
You need to find out what health insurance will cost you, in order to analyze which option is best.
Make sure you aren’t eligible for Access only benefits. Then you have to pay 100% of the cost with no subsidy. If that’s the case it’s better to get the whole severance, not reduced MTP severance and find your own insurance.
This is a question best asked to a financial advisor..... not a chat board imo.