Why is everybody suddenly talking about it?
19 replies (most recent on top)
My take.. Legacy Ameritech/SBC here... the month I hit 55 years old + 20 years servce a few years back, my lump sum jumped from mid $200s to mid $500s, then continued to climb to upper $700s with the Nov 2021 segment rates
It’s interesting comparing the different legacy pensions. Were you craft or management? I left last Nov. with 42 years service and never sniffed the 700K range and that also took into consideration a 10% off tour differential as well. I stood to lose 30-40% of my lump sum by not leaving when I did
"I was legacy T craft and retired back on 11/30 last year with 2021 segment rates. The segment rates have essentially doubled for anyone retiring in 2023 and keep hearing how lump sums are increasing for certain groups hitting MR75. Are these lump sums calculated in a different way not tied to IRS published segment rates? Just curious"
My take.. Legacy Ameritech/SBC here... the month I hit 55 years old + 20 years servce a few years back, my lump sum jumped from mid $200s to mid $500s, then continued to climb to upper $700s with the Nov 2021 segment rates (https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates). With the Nov 2022 segment rates my lump sum is now back down to upper $500s. When you say "lump sums are increasing for certain groups hitting MR75" maybe they are still just talking about the initial bump they see when they hit MR75. Because even though segment rates went up significantly Nov/21 to Nov/22, they'd still see a gain in their lump sum once they hit MR75.
The higher the rates the less your lump sum
I’m well aware of that that is why I’m wondering how lump sum amounts are increasing. My guess is that they are not tied to segment rates?
"The segment rates have essentially doubled for anyone retiring in 2023 and keep hearing how lump sums are increasing for certain groups hitting MR75"
The higher the rates the less your lump sum.
I was legacy T craft and retired back on 11/30 last year with 2021 segment rates. The segment rates have essentially doubled for anyone retiring in 2023 and keep hearing how lump sums are increasing for certain groups hitting MR75. Are these lump sums calculated in a different way not tied to IRS published segment rates? Just curious
something that use to matter but doesn't anymore.
Rule of 75 is the big pension jump for employees who still have pensions with contributions by the company. It's your age + years of service added together in any of these three combinations:
50 years old + 25 years of service.
55 years old + 20 years of service.
65 years old + 10 years of service.
For most it seems to be at least a $150000 jump
"Legacy Yellow (SBC corp et al) gets to take their mousepad home. They used to get medical and Medicaid part b money."
Damn. We were supposed to get a mousepad? It's probably some leftover Y2K branded merch.
Add age and years of service, but you also must meet EITHER age minimum of 50 or service minimum of 30 years. So, if you are 49 with 27 years of service, you don't meet it yet even though it adds up to 76. If you are 48 with 30 years, you do meet it, assuming you started at 18.
Nothing for people in Management.
I'd say it's pretty simple. If you don't know about it, then it most likely doesn't affect or concern you.
I think some of the confusion is surrounding the medical benefits in retirement vs pension.
if you meet ruler 75, it means you're 6'3" tall
Certain legacy still get big pension lump sum bump with R75, so I don’t know why you all say everything went away and R75 is no longer worth anything
To clarify some of the comments on this thread....
MR75 has to be in increments of 5.
For example:
If you're 52 years old with 23 years of service you DO NOT qualify for MR75 even though they do add up to 75. You have to meet both minimums of age and years worked. So, age 50 years (met) but years worked 23 years (not met in this scenario)
Key match is 52 years of age and 25 years worked is the minim combo in this scenario.
That said, after 12/31/21 you only get half price on data plan and accessories for your phone.... which is actually nothing because you can pay full price at other mobile providers and still pay less. SMH
Depending on when and where you started with the company, the “modified rule of 75” may apply differently.
Legacy Blue (original AT&T) still has significant benefits to hitting 50+ age and 25+ tenure for the pension.
Legacy Orange (Cingular) gets a 30% discount on phones after spending a lifetime enriching AT&T leadership.
Legacy Yellow (SBC corp et al) gets to take their mousepad home. They used to get medical and Medicaid part b money.
MR75 is why many stayed through the tough years when Randall, Donavan, and Stankey drove this fine institution into a ditch. Unfortunately, that ditch was the Grand Canyon and we’re still stuck wrestling the steering wheel out of Stankey’s clumsy hands.
Rule of 75 was a legacy police related to retirement qualification. It went away at the end of 2021 when final retirement benefits related to medical were removed.
You get more if your 55 or have 30 years as well.
Add your age and years of service for full retirement