I resigned last year and just got my pension benefits package. Is there any reason NOT to roll over the lump sum into my XOM savings plan rather than an outside IRA? I'd rather keep the balance out of an IRA for now so I can continue doing backdoor roth IRA conversions without having to recognize pro-rata taxable income on from an IRA. I'm happy with the investment options in the XOM savings plan so...is there a downside I'm missing?
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After you leave EM, your after-tax contribution can be rolled over to an outside Roth IRA without any tax liability.
My advice - rollover to an outside IRA as soon as you leave EM. You'll find that you have total control of your money. You get to decide when, where and how to invest anytime. You will be able to buy/sell any stock on the stock market. Employer sponsored retirement platform is a scam, only that you can not do a thing about it while employed.
Lockheed has decided to move from Voya Financial to Empower Retirement to service the company’s 401k plan - theaeroadvisor.com/faqs-lockheed-moving-401k-to-empower-retirement/ If Voya is so great, why would Lockheed Martin dumped Voya. Study the investment options offered by Voya to see if you can find an ETF that has outperformed S&P consistently. I have another 401K from previous employer which offers at least one other option that outperforms S&P long-term (of course with short-term volatility). Voya is great? Give me a break. Do your own research.
I had rolled a fairly large 401K into an IRA prior to the Roth becoming available and what a pain in the neck trying to do backdoor Roth conversions with the pro-rata rule! I ended up just contribute to the wife's backdoor Roth since it is separate from mine and just put all my effort into the XOM mega backdoor Roth by converting after tax contributions once a year into Roth. Looks like the mega backdoor survived for at least one more year so take advantage if you can. Agree with your decision and since I don't trade XOM stock inside VOYA no aggravations there.
@OP Voya is the worst retirement platform, period. Consider these - 1. If you buy or sell EM stock on Voya platform, Voya charges you 1c/share - hello, zero commission everywhere else; 2. If you send Voya a request to sell/buy EM stock/ETFs, Voya executes the next day, not real time - blind trade. Will you still want to stay with Voya? My sincere and honest advice - run away from Voya as fast as you can. Best luck!
I did the same....in fact, if you want to continue doing backdoor Roths in the future (assuming they stick around) you must roll the pension lump sum into the Voya account. It's the best option in my opinion since the plan is very good from a cost perspective....the investments are also solid and built for long term investors (like a pension).
The forms were pretty easy to complete but I would also call Voya for their help and get a contact person for later. They will tell you the roll in is not required but its the last transaction you can make into the Voya plan after you leave. The pension "advisor" I had was pretty worthless...just wanted to make sure i got the paperwork done. For your case and the pro-rata issue, I would roll into Voya.
Also - as an almost f-u parting gift, the cheap-o's at XOM send you the pension forms on double-sided print....making it impossible to upload to the lifeatworkportal....so you have to rescan each double-sided page into single if you want backups/copies. lol.
One key consideration is that by leaving it in a qualified defined benefit plan (401k) you can possibly roll it at later point into another qualified defined benefit plan if the next company’s plans allow. The unique element is that ultimately when you retire or separate service over the age of 55 from a company with funds in their qualified defined benefit plan (401k), you can take distributions penalty free from the 401k without paying the 10% irs early withdrawal penalty. If / when you roll qualified plan funds to an IRA you lose this feature and would have to pay 10% penalty on early withdrawal distributions. A small detail but could be important if you are planning an early retirement at age and want to access retirement accounts before 59-1/2. For folks nearing 55 this is large consideration and I know of some folks whom did not know this and hurt themselves by doing an Ira and then paying 10% early withdrawals before 59-1/2.
Minor point but rolling the pension into a 401k like the XOM savings plan will give it better protection from creditors than rolling it into an IRA (probably not a huge risk but worth mentioning).
@qzc - what the fcuk are complaining about NOW ???
roll it over -- i left a few years ago and wish i had. Now i have to keep Xom up to date with any address moves I make for the next 30 years. If XOM ever offers to buy me out i'll take the offer immediately.
We did this when my wife retired. All worked out well.