Looks like the pension is no longer insured by the PBGC. A lot of people could really regret taking the annuity if this goes south.
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I took the monthly payout, my investment skills suk
Take the lump sum and buy Dogecoin. Get rich.
I'm taking the lump sum and spending the rest of my life at a Nevada br----l. Does anyone have any suggestions which one?
The below statement that includes:
"....The pensions managed by Athene may perform just as well as when at&t was responsible.
It's real unfortunate this had to happen but with a CEO like Stankey, it should have been expected."
Which is it? The pension managed by Athene will perform just as well... or It's real unfortunate this had to happen?
Sorry mr. dictator, you are dead wrong. Everyone is free to make their own choice. Freezing pensions is one thing, moving annuity pensioners to an insurance company is quite another. The pensioner will now need to assume more risk with this transition. Your Monday morning quarterbacking hardly qualifies you as a hero. The pensions managed by Athene may perform just as well as when at&t was responsible.
It's real unfortunate this had to happen but with a CEO like Stankey, it should have been expected.
Case Example of other Pension Acquisitions / JC PENNEY
Over the past few years JC PENNEYS made a similar decision with Athene and Prudential Insurance Companies to take over the Administration of their Pension Plan
See the following public record WEB Site Articles
https://www.cfo.com/human-capital/2021/04/jcpenney-offloads-2-8-billion-in-pension-liabilities
https://www.reuters.com/article/us-jcpenny-pension-athene-hldg-exclusive-idUSKBN2BO6GW
https://jcprestructuring.com/wp-content/uploads/2021/04/JCP_Standard_Term_Participant_Letter.pdf
https://retirementincomejournal.com/article/prudential-buys-a-chunk-of-jcpenney-pension/?pdf=6812
In response to:
"Oh no, another Monday morning quarterback! You shoulda, coulda, woulda! All of these affected people had no way of knowing this might happen. ..."
What rock have you been living under? Stank has stated several times (in 2020 to be exact) that they were thinking of freezing pensions. Last year thousands of people were impacted by the segment rates which resulted in 30-40% loss off their pension if they didn't leave by 12/31/22.
The writing has been on the wall for years and you're just now catching up? People were warned years ago, but some, such as yourself, aren't paying attention. You are probably one of those that think Stank cares about you. SMH
Oh no, another Monday morning quarterback! You shoulda, coulda, woulda! All of these affected people had no way of knowing this might happen. They may be fine if Athene does the right thing. Who would have guessed 20 years ago that at&t would be $135B in debt with no promising future. Stankey turned this once iconic company into a train wreck bordering on bankruptcy.
How many annuities do people need?
Think about it. Social Security is an annuity.
Take the lump sum. It is a no brainer. Invest in the market with index fund and very little admin fees (Vanguard). It is about diversity. And it is all your money. You have access to it free and clear any time (other than uncle Sam's piece). It is crazy to not take the lump sum. Crazy.
It's insanity not to take the lump sum. Even with penalty you'll be back above board at about 3 years if you invest in a Roth IRA and will be smoking AT&Ts pension value at year 10.
But people love AT&T being daddy. Even if they hate daddy.
"I don't get it. I am getting paid with annuity and no risk and I don't have to do anything. So what's the problem?"
It's not a problem, it's a personal choice. However, if you pass away your spouse will only get half of what you get paid now. If you and your spouse pass away the annuity payments end. You don't have the option to pass on to any other beneficiary.
Also, annuity doesn't account for inflation that occur each year.
What may be a $2000 monthly annuity now will not be worth the same in 10,15,20 year from now.
I don't get it. I am getting paid with annuity and no risk and I don't have to do anything. So what's the problem?
The decisions on Lump Sum vs Annuity is a personal decision based on their own financial circumstances. Regardless of what you decide either option has risk.
Pensions that are annuitized come with protection via the Pension Benefit Guaranty Corporation (PBGC) while under the control of the sponsoring Company.
If the pension obligations are transferred to an Insurance Company for administration that protection shifts to your own state under the State Guaranty Associations and no longer under the National Federal Pension Benefit Guaranty Corporation (PBGC).
In either case there is protection.
If you elect to take the Lump Sum, you have the option to invest (which can carry a short term risk, or you have the option to buy your own annuity via an Insurance Company that may not give you the same rate of return for your investment as a company pension.
In all cases there are risks, just keep in mind of the protections that come with the annuities vs no Protection for Market Investments.
If you take an annuity, the company has a bond on that retiree. When the retiree dies the company will get paid by the insurance (most likely in the $$ millions) while the spouse of the deceased will only get chump change (half of what was being paid to the retiree).
It's rigged, and not in the employees favor. The best thing to do is take a lump sum and invest!
No brainer.
Why anyone would take an annuity over a lump sum is beyond me.
Take the lump sum, invest it, leave the rest to any beneficiary you'd like (spouse, kids, uncles, cousins, friends, etc). In the long run that money can work for you.
Taking an annuity and you pass away, your spouse will get paid but only half of what's left. Once your spouse passes away it's over. Nothing to hand down to your kids or any other loved one.