I’ll be just shy of 23 yrs when I’ll be surplused. I’m hearing different things about when I’ll have access to the pension money from my legacy company (Ameritech). I thought it was immediately but someone told me today, you cannot access it until 62 or 65. I’ve also heard the people at Fidelity are useless and don’t know what’s going on with the AT&T pensions especially after the recent sale of them to Athene.
15 replies (most recent on top)
As of November 2022, I retired pulled my money away from the pension pool and put it in my IRA. Supposedly I would've lost 1/3 of my lump sum if I waited until January 2023 to redirect it?
I retired at 56 and am using the 55+ age rule. I have to use a given amount for the next 5 years even though I will pass the 59-1/2 age threshold. My first year I took out $60k so I will have to take out $60k for the next 5 years. I will be almost 62 years old when I can take more than the amount I agreed upon. I get taxed at the normal rate but the 10% penalty does NOT apply.
When you leave AT&T willingly or not don't leave your pension with them. Whatever your amount is put it in a IRA and find a really good financial advisor and a good tax accountant.
Current employee pensions have not been sold to Athene. Only retiree pensions were sold.
You can defer the pension payouts until age 65
Fidelity will help do the rollover of the lump to an IRA.
The way interest rates are likely to go, probably better to leave it in and maybe get a better payout. Then there’s the tax bracket situation for the monthly payments. Better to take them when other income is less.
You can leave your money in the pension, roll it into a IRA or 401k, take part of cash out, take a lifetime annuity. Lots of options you can choose from at ANY point in time whenever you decide.it’s your money
If you are part of the computer tech layoff that was just announced, you may be able to test qualify for some other wage group one jobs. I know a few that are looking to be added to the VSIPP list as they are leaving this year. Stay optimistic and hopefully you can find a position not too far from home. Good Luck
Call Fidelity and ask them to do a "calculation" based on your expected last day of employment. This is a required step and can take weeks.
Then ask for a Retirement Benefits Coordinator to be assigned to you. You do not have to be MR75 to get this assignment.
Once off payroll, the coordinator will initiate all payouts needed for both 401k and pension. If you roll to your IRA, be aware that A) you close out and transfer any brokeragelink back to your 401k and B) that you do not have any AT&T stock in your 401k (rebalance out, the coordinator can help you) and C) check if you have any funds in a roth 401k as you will need a separate roth ira account for that as you will get a separate check.
Pension is a check to your home address snail-mail (not fedex, etc) and 401k can be fedex'd if you ask.
As long as its a roll, all payments will be tax-free.
hth
The pension penalty is 6% a year or 1/2% each month if you are younger than 56 and haven’t met the modified rule of 75, the age may be different for various regions. I believe it’s 55 if you have been laid off. As other have mentioned, contact fidelity for the details because tens of thousands are at risk.
Get a financial advisor.
There's some goofy rule that if you take your lump sum pension before 55 you lose a certain amount for each year and I here it's a lot. There are people that have left in their early 50's and are waiting until 55. Also your lump sum will go up as interest rates fall if your on the Ameritech pension plan. Another reason to wait to take the lump sum. Better talk to someone at Fidelity.
It depends which plan you are under from which company. I know some have it to where you can take your lump sum in full if you meet MR-75. However, if you don't you will suffer an age penalty and your lump sum will be at a reduced amount.
"All of the following would satisfy these criteria: 25 YO + 50 Years Old, 20 YO + 55 Years Old, 10 YO + 65 Years Old, OR 30 YO + Any Age. It is essential to remember that if you satisfy only one of the aforementioned criteria, you will not qualify for the modified rule of 75. For instance, a 49-year-old individual with 26 years of service will not qualify because they only satisfy the requirement for years of service, but not the age requirement.
Even if you qualify for Mod-75, if you have less than 30 years of service as an AT&T management employee, you will be penalized if you take your pension before age 55.
Employees of AT&T who meet the Mod-75 requirements may also be eligible for subsidized benefits, such as life insurance, vision dental, and retiree medical coverage; however, some of these benefits have been eliminated or reduced in recent years.
Employees who are eligible for a pension but do not presently meet the Mod-75 requirements will begin receiving their pension benefits at age 65. If you choose to begin receiving your pension before age 65, you will be subject to significant penalties.
It is important for AT&T employees to be aware that if they take their pension before age 55, they may face penalties. This penalty applies even if they qualify for the Modified Rule of 75, which determines eligibility for certain benefits, including pensions and medical benefits. Understanding the age and years of service requirements outlined in the Modified Rule of 75 is crucial for AT&T employees planning their retirement. By being informed about the potential penalties and requirements, individuals can make informed decisions and optimize their pension benefits."
Thank you. I'm 48 and almost 23 yrs so just missing the rule of 75. My pension is vested though, I thought I can roll it right into something else but my coworker had me questioning it today. The amount of misinformation that has been going around recently is nuts.
"What is your age? If you are 55, then you can take a lump and remove all of it since you would meet the rule of 75. If not, then you are not retirement eligible and must wait until 65."
that doesn't sound right. I moved my pension out when I was 53.
You can immediately take a lump sum and roll it into an IRA. Zero taxes paid as long as it is rolled into a qualified investment account. Fidelity isn't that bad to deal with at all. If you still have a 401k with them you can probably roll it right to that.
What is your age? If you are 55, then you can take a lump and remove all of it since you would meet the rule of 75. If not, then you are not retirement eligible and must wait until 65.
Your best bet is to call/contact the Benefits Center.
I was surplus'd in 2019 so it's a bit hazy, but if I recall, I want to say that yes, the pension would start at 65. It didn't matter to me either way, I met with my local Fidelity branch office and rolled my whole 401K and pension into IRAs. Fidelity admin'd both the 401K and the pension and they were 'on it' and knew the AT&T folks to call and had us on the call with them and they direct rolled over from the AT&T company accounts directly to my new IRAs, so it was clean and easy. It took a couple of days for the 401K and about a month +/- for the pension...
I wouldn't say Fidelity was "useless" in my experience they are very good, but if you call them and they say they can't do anything b/c of the sale to Athene, then ask the Benefits center.
This is why I rolled everything out and over, I didn't trust the company to handle things well in the coming years...