So the pension rates will take a hit if you dont retire this year. Can it ever replenish after 2023? For example if the segment rates go back down in 2024.?Can you recover what you lost and it starts rebuiding?. Or is that loss lost forever? Which means all employee will take a hit? The only way to recover is to work longer? I know that is dependent upon the economy. Again is the loss a loss for everyone that you can never get back? You just have to replenish by more time worked or if the segment rates go back down in the future years will you not see any loss?
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If you are - retirement eligible either by MR75 or by age, planning to retire in the next 5 years (assuming T doesn't lay you off first), and taking a lump sum you better get the he-l out of dodge this year!!! My scenario - SBC pension, MR75 eligible, lump sum - if I stay until 2023 using est. segment
rates for 2023 I will lose over $250K from my lump sum! Even using the most recent segment rates for August I will lose a little over $200K !
If you are retiring in 2022 or 23, take the annuity. You won't make up the lump sum loss in stocks or in CDs or by company contributions. That ship sailed away in 2021
Untrue: there is still time to take advantage of the 2021 segment rates if you begin the process ASAP Agree about not making up the difference for several years if ever
If you are retiring in 2022 or 23, take the annuity. You won't make up the lump sum loss in stocks or in CDs or by company contributions. That ship sailed away in 2021.
I can only speak for Legacy T craft if you are eligible for the lump sum (not cash balance) then you will see a substantial loss. As of this time it is down approx 20% and in all likelihood will drop even further after the August and September rate hikes. August segment rates will.be out in a few days. Yes it’s possible to recoup this loss over time but far too many variables in my opinion for someone my age, and yes age is also a determining factor as well
Again, yes - pensions down if you take lump sum. near retirement but decided to take monthly annuity. That doesn't change based on interest rates. Stinks, I know.
The retirement group material I read indicated it would take 4 years to make up the lose.
For last poster. The legacy SBC annuity would increase every year at 1.6% of the previous years compensation. For example if you made $100K, the annual annuity would increase by $1,600. This would make up for the fact that if you were pension eligible you gave up one year of pension to stay one more year. Effective 1/1/22 this amount was decreased to 1%. They stated it was for equity purposes. Some believe it was to encourage older workers to leave. Other T pensions were similarly impacted. Not whining, just the facts.
The Retirement Group, LLC states that there will be a substantial drop in ATT pension amount. Biggest drop in a generation! Is this true??
@However, the company cut future increases to the annuity, so even if the rates went back down you may find the lump sum less.
Question. Whete does it state the company cuts future increases for the annuity? Is this just for the annuity?
Again, as other posters have says, this depends on what Pension Plan Toxic-T stuck you with. They are all significantly different.
If you are on the Legecy-T Management Pension plan, the segment rates change each year, and the lump is recalculated every November. Could your lump go back up to what it was - it is mathematically possible.
But you have to ask these questions:
- How long can you put up with Toxic-T?
- Is the Gooberment ever going to stop spending so inflation tapers so the rates go down to near 0% again and the segment rates go down so the lump can increase?
- Is the Stink going to discontinue the pension plan and raid the pension fund at some point and put some small payment into your 401K in lieu of you lump and then take all the $ left over?
It really depends what pension you are on. For the legacy SBC pension, the lump sum is based on discounting the annuity based on segment rates. If the segment rates go down in the future, the lump sum will go back up. However, the company cut future increases to the annuity, so even if the rates went back down you may find the lump sum less.
So the question is is there really a loss or is it just not as much gains as it woukd have been if the segment rates woukd not have increased?