Thread regarding AT&T layoffs

With the Fed lowering rates this year from 1.75 to .25, the lump sum should go up on Jan 1. Unless AT&T gets some judge to rule otherwise. SInce the Fed won't raise until 2023, this should not be a concern for 2 years or so.

Always take the lump sum and roll it into your IRA rollover account. The reason is that if you drop dead one week after leaving, your loved ones get nothing except perhaps your spouse who gets a percentage. If you and your spouse get run over by a garbage truck, your kids get nothing. If you roll over to an IRA, then you can specify beneficiaries who would then be protected. If you invest the money decently, you will get more overall than you would have from the pension anyway. Lastly is the issue with runaway inflation. It degrades your effective payout severely.

Two lumps or three? Wonk wonk from a big hammer.

If anyone’s pension needs smoothing it’s Ratty’s Not sure where you’re getting that info about the lump sum but don’t really see that happening anytime soon. Besides Ratty is gone

Do not overlook the fact there is not a COLA (cost of living adjustment) when taking the annuity. Inflation will erode your purchasing power drastically over a 20-30 year retirement.

@nql+16hl67Gq

"ATT that would cap the impact of downward interest rates and limit the increase to the lump Doebelieve when the FED cut rates earlier this year Randall did make a comment regarding the words "pension smoothing" could possibly be used. I have not seen anything else about this, but it is something to be aware of. Basically, you're right, so I am not sure if we will see the benefit of an increased lump from the low interest rates next year.

I think you can take the lump sum and divide it by the single life annuity number and you will have the number of months T expects you to live. If you expect to live longer then the annuity might make sense.

You’re a fool to take an annuity. If your CFP advises you to not take a lump sum, you need a new CFP.

Inverse relationship. Lower interest rate = bigger lump. I believe they are expected to go down a tick again in November. I don't see how they could get much lower...?

Last year when the wife was wacked, T recommended to everyone to take the lump sum immediately, as the Fed was expected to raise rates and so the lump would be less. Of course the Fed cut and if she would have waited her lump would have been CONSIDERABLY more.

I though the Lobbyist had the low lifes in Kongress put in some little overlooked provision in the Payrcheck Protection Act to provide relief to rip off artists like ATT that would cap the impact of downward interest rates and limit the increase to the lump sum? That would save T from borrowing more billions of $ to pay out the lump when everyone would have left to rake in the large lumps this December. Why would them trying to rip off retirees not surprise me! Comments?

The lower the rates the more money AT&T has to put in to guarentee the same level pension amount, this means lump sum goes up.

Which MPV segment (1, 2 or 3) is used to compute the lump sum?

You can check PPA rates at https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates
They typically get updated on the 15th of the month or a few days later. You should be able to plug them into the Fidelity pension planner to get an estimate.

Note that Nov-19 rates were the lowest Nov rates ever recorded and the currently posted (Jun-20) rates are much lower. The lower the rates, the higher your lump sum payout.

It’s based on what the 3 PPA segments rates (pension protection act) are in November. Also see Minimum Present Value Segment Rates. If these segments are higher than nov 2019 rates, lump sum will be less.

Inversely proportional. Interest rates rise, lump sum decreases.