I am surprised that ATT has not already halted the pension lumpsum? Interest rates are basically zero, which means your pension value is at its max payout. Realize that pension payouts change drastically, based on interest rates. You are guaranteed nothing, until the day you have cash in hand. ATT doesn’t have any cash. If you get laid-off, I would call Fidelity immediately, and take the pension lumpsum. You can invest that money however YOU want. Don’t leave it to Stankhole or Stinkey Stephenson, to lockdown the pension
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"It's people like this that make it very hard for me to go through life as a white person."
You have white priv. You don't know shiznit about a hard life. Move along
"If the pension is taken as lump sum, is that counted as Income and taxed as such?
Years ago when I left a job I took the lump sum pension and had to pay $8k in taxes the following April. It is infuriating to have to turn over all that money to the criminal government when it was my life spent working the 15 years earning it"
Sounds like you unwisely "withdrew" your funds. If you had done a direct transfer rollover into an IRA or a 401K, you would have avoided that tax liability.
Here are the interest rates that calculate the lump sum. The November rates will dictate the new amount.
https://www.pensionsoft.com/resources/Segment
- and once again there is some right-wing OAN watching racist who has to burble about the "Wuhan flu".
Sigh.
It's people like this that make it very hard for me to go through life as a white person.
I left in Oct 2019. The new rates for 2020 were decided in Nov but not visible until mid Dec 2019. Last Aug, some people who were laid off were sent letters saying that to get their lump sum, they must take it in Sept or they will be getting the annuity. Even though my lump sum is very large, I am going to see what happens in Aug/Sept. If I am not forced to take it, I will wait until next Spring since the corporate bond rate (tied to the Fed interest rate) went down 1.5% in 2020. I know that I am taking a risk here but I feel that it's worth the risk.
If the pension is taken as lump sum, is that counted as Income and taxed as such?
Years ago when I left a job I took the lump sum pension and had to pay $8k in taxes the following April. It is infuriating to have to turn over all that money to the criminal government when it was my life spent working the 15 years earning it.
Agree!!!
Just halt lump Doem surprised they haven't implemented a way to take pensions away completely. If the economy would tank because of Wuhan Flu or other social unrest, how long do you think it will take the geniuses that are running this company into the ground for them to renig on pensions. Look what General Motors did in ‘09 as a model. They screwed all their retirees out of pensions, forced labor to renegotiate to keep their jobs, took government loans and came back as fat cash cows (until Wuhan Flu that is). If firmly believe in not pressuring anyone to leave their job, but I think the people who are eligible to leave with 30+ years of pension need to seriously consider what would happen if they would loose that pension. Is it worth another year or two of salary? I need 5 more years to get my boy into college and fatten up the 529 plan for him (I’ll have 25 yrs then & be 63) but I am seriously concerned that are pensions may be in jeopardy if not gone by then.
There is no lumpsum until AT&T sends a letter giving you the option to. Likely this summer like last summer
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I left in November of last year and waited until Jan to collect and received the benefit of the lower rate.
/quote;
which pension plan?
I've read in other threads that said the lump sum option goes away if not taken at the time of leaving the company. Not sure what pension they were in though (bargained/non bargained/Mobility etc).
Make sure you check the calculations when you get the payout. There is an ongoing lawsuit where att has stolen pension from the workers that have help build the company.
https://layofflanding.com/att-pension-lawsuit/
When covid started and interest rates dropped, Randall sent letter to pres begging to not have to fully fund pension. That letter is out there. Randy and a dozen other ceos signed it. That scared the heck out of me. I will try to find it and post.
I left in November of last year and waited until Jan to collect and received the benefit of the lower rate.
The new interest rates come out mid Nov. If you wait till end of year, there will be benefit from lower interest rate at that time. Can they reverse the policy? Perhaps. But they benefit by getting rid of you as a pension liability ... they have to set funds aside and keep the pension funded for next few decades. If they are short of money, this is a good time for them to borrow at record low rates.
If you get laid off in the 2nd quarter 2020, will you still have the lump sum option if you wait to collect the pension lump sum after Jan 1 2021? or is the 2020 interest rate locked in?
Plan uses three PPA segment from nov of each year. Search PPA segment to see values and trends. Long form search on Minimum Present Value Segment Rates It’s in IRS site.
The reason they haven’t stopped the lump sum is because they use the rate from November of the year before so right now you wouldnt get the benefit of the new rates. The rates will have to hold until Nov and you would have to wait until Jan to collect.
Does anyone know how to estimate and use the interest rate that will be used starting at the end of this year to calculate your lump sum? Calculations that I do today are based on the interest rate set last November (I believe). My pension took a big jump at EOY last year because of the interest rate change and it should do that again this year since rates are now near zero. Just trying to determine if I should wait (if I do get the call) and get that extra bump.