What’s in the VRP? I’m 55 so do I get access to my 401k without penalty? What about stock? 2 weeks for every year of service?
Are they gonna sweeten the deal?
6 replies (most recent on top)
Historically offerings in each VRP at a company are degraded from the previous one. But, that’s when it’s offered to all qualifying employees. Here, Cigna cherry picked which areas qualified last time and potentially new areas will be offered next time. So, other than the PTO there hopefully won’t be big differences ….
No more unpaid PTO. That perk goes away 1/1/26
The last VRP also offered subsidized health care, I heard it the subsidy was good where they essentially paid about the same as when they were working.
Yes, 2 weeks per year of service just like regular severance, but they started with a minimum amount, I recall it was around 20 weeks minimum (I could be off on this one, going from memory).
You are asking about Rule of 55 as it pertains to a 401k, please google this before making moves on your 401k. If you are planning on drawing from your 401k under the Rule of 55, you MUST keep your 401k as is, do not not roll it over to an IRA. And I'm not sure who to contact, but I think its best to start with our HR or plan administrator to find out if they allow for early withdrawal (not all plans do, but I imagine a company this size, we can). While the government set the Rule, the individual plan needs to allow for early withdrawals or it's moot. I would hope the company is providing better details on this in the VRP package information. If you think you will want to use your 401k funds before 59.5, keep the 401k as is for now to keep your options open while using severance, because once you roll to an IRA, you cannot go back.
One last note on withdrawing money from a 401k (early or not) I have read (and this is plan specific, so may not apply to our plan) that some 401k plans will charge for withdrawals from a 401k, so if you need this option, just be aware of what they may be and if imposed, limit doing many smaller withdrawals to keep fees under control.
To expand on a previous comment, once you leave a job, you can roll a 401k to an IRA without penalty no matter the reason you leave and at any age. But to the OP, if you want to enact the rule of 55 to withdraw funds without penalty, you need to retain the 401k as is. Once you roll to the IRA, the Rule of 55 no longer applies and you will be penalized for early withdrawals from the IRA.
I’ve heard that the difference between the last VRP and layoff is that with VRP any stock you may have vests, even if the vesting is over 12 months out. With layoff, you only get what vests within 12 months of your termination date.
You can roll your 401 into an IRA without penalties.
Ask chatgpt about the 401K rule of 55.
The package is basically severance.
Cigna doesn’t determine 401K rules.