Thread regarding AT&T layoffs

And as long as everybody doesn't retire on the same day it's no big deal.

The Federal Reserve will reduce interest rates this year so I'm taking the lump sum and running early next year.

Lump sum or annuity?
The general rule of thumb is:

Single person: Multiply your monthly annuity payments by 12 and divide by the lump sum amount.

Married person: Multiple your monthly annuity with 100% survivor benefit payment by 12 and divide by the lump sum.

If the amount is less than 6% take the lump sum.

Cooking the books.

Glad I took the lump sum in Dec 2022. Right before the Fed raised rates, so it went up a lot thanks to Covid rates. If you aren't married, do not take the annuity. Your heirs cannot inherit it. Get out of their plan before its too late.

A simple 50-50 allocation portfolio would have yielded ~ 12-13% which would have resulted in a pension plan surplus.

Just a clarification - that result was for 2024 assuming current markets but even the 6-7% average annual return acheived for all defined benefit plans over say the last decade would have resulted in a current plan surplus.

The AT&T pension plan is run by a bunch of AT&T Dallas insiders who started in the accounting department or who knew somebody. They have no real investment expertise. Fidelity, Vanguard, WF, JPM, Black Rock - nobody would even consider them.

Glad I rolled my pension over into Vanguard. Happy to get away from a dying company. Cingular was leaps and bounds better run than SBC!

"Private equity doesn't benefit from pensions, so milk it dry and push profits to stock buy backs and dividends. This is the way!"

Not sure what this is trying to say exactly but the current Private Equity allocation in the AT&T pension plan is ~ 18%. It is a big portion of the asset base. The biggest issue is the terrible 1.4% return on pension plan assets.

Those stock buybacks would be turned around and handed to C-suite as bonuses, and other compensatory perks.

Why would they fund pension vs buybacks? Buybacks appear favorable in the market as the stock is undervalued. Better bang for buck in their eyes and prop or increase per share makes them more money on stock and exercising options.

If you have any Bell pension be happy it's probably more than the Cingular pension people.

Agreed always take the lump

Private equity doesn't benefit from pensions, so milk it dry and push profits to stock buy backs and dividends. This is the way!

Never take the monthly. Always take the lump.

I don't think they can take away any of the balloon amounts that have already been credited to those employees, but they can reduce contributions going forward for some or all of the participants.

@a7+1jsphfc5a

News for you-your pension's going to be reduced anyway if the plan doesn't make up the funding shortfall. Hope you've put into your 401k generously.

and the ones that have the least time to adjust. Great thinking.

Oh, boohoo. So you'd have less than 800k-900k pension in addition to your 401k that should be about a million. Please...tons of employees have just the 300k that was earned, plus the 401k. They should have made the pension plan the same across all sectors when they reunited the company.

"I suggest they start with all the people who had those stupid multipliers"

Yeah, let's have the company break another contract with their employees, and the ones that have the least time to adjust. Great thinking.

Given the current financial state of AT&T, I’ve always assumed the pension will go away.

Maybe they ought to reconsider the stock buybacks and instead put it into the pension--but they won't. Or they may end up reducing pension benefits. I suggest they start with all the people who had those stupid multipliers that got 2,3,4 times their benefit when they met some magic years of service. You can always tell what "Bell" someone came from by whether they have a normal amount in their pension or nearly a million.