I've been with the company 23 years and am 45 years old. I don't meet the rule of 75 but not sure my sanity can take it any longer. If I leave, I get my lump sum pension. Does anyone know how much different the pension payout is if I leave this year as opposed to next? I keep hearing that the payout is less next year but trying to understand if it;s significantly less or just slightly less.
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take lump sum. I wouldn't be a bit surprised if T pushes pension to PBGC. found out when insurance company manages the pension fund it is then deemed not as a pension and fall under the FDIC rules, but an insurance policy and no FDIC guarantee qualifies
Don't make this hard. call Fidelity and ask for 2 payout scenario's. First if you leave Dec1,2021. The second if you leave Feb 1, 2022.
You will see the significant difference.
See this link and ask these guys. They know the AT&T plan.
Ps- I do not use them but my team has and got tons of info.
https://www.theretirementgroup.com/blog?utm_medium=email&_hsmi=144529366&_hsenc=p2ANqtz-9gtFC44MzRWCR5ayuNGX0p9WJ1F5E_HysBZQ7HKplhHZt_CbOxqiK7j5jnvsTPJB-w9fnJoVl9X9MTKMMb6O4sG5UEjw&utm_content=144529366&utm_source=hs_automation
The pension lump sum is going to go up next year. Wait it out.
I found this helpful article which really dives into T Mod 75.
https://techstaffer.blog/2020/06/17/modified-rule-of-75-att-retiree-benefits/
The key thing to keep in mind is that not everyone's pension is calculated the same. So when you hear some people talking talking about a huge financial incentive (via their pension amount) to get to MR75...that doesn't apply to everyone. For instance, I had no significant change in cash value at MR 75...and it seems to only go up a few grand each year.
Remember if you are legacy T you have to leave BEFORE Dec 1 to have lump sum paid out using Nov 2020 rates and request payout on first available date, I.e., Dec 1 if you leave Nov 30. If your last day is Dec 1, then first available payout is Jan1 and you miss the opportunity to use the Nov 2020 rates.
The analysis I did showed a loss in lump sum amount if I stayed.
At the Fidelity site, plug in a new benefit commencement date (post-2021). Then go to the segment rates section and use updated rates. The current default is tied to the November 2020 rates (0.53, 2.31, 3.09) assuming you leave by end of 2021. As of June, the rates have already crept up to 0.63, 2.70, 3.32 which means that if these rates hold in Nov 2021, then lump sum will be less based on your (and spouse, if applicable) actuary tables if you leave in 2022 or beyond. For every month you defer the benefit commencement (up to age 55), you improve the lump sum appx 0.5% (Non-Bargained Legacy SBC Program) but that 6%/yr is being eaten up due to the increase in minimum segment rates. Nov 2020 was a historical low and likely will never be that low again considering where inflation and 30-year Treasury’s are headed towards.
I do these scenarios often, and have seen a decline in lump by pushing employment into future years up until my MR75 in 2024. Even then, if rates really spike like Nov 2018 (3.43, 4.46, 4.88 - run that scenario if you want to see the impact), then you’ll not see that “hockey stick” we hear about at MR75. Take the lump (not the annuity), do a direct rollover into an IRA, have a legacy for your beneficiaries, and defer taxes until distribution after 59 1/2 before it flips to PBGC due to default by AT&T and you get a discount on your benefit. Likely won’t happen, but do you think AT&T still wants to be in the pension annuity program in 40 years when you are in your 80’s? Put that in perspective - what was AT&T 40 years ago - before divestiture - Ma Bell. They barely could stand WarnerMedia for 2 years before they pulled that plug. You can always create your own inflation-indexed annuity from the Lump Sum if you want the mailbox money.