Thread regarding Intel Corp. layoffs

You're welcome.

Also, if you weren't aware (I wasn't until recently)... there's a link at the top (and bottom) to go to 'Older replies' if you wanted to start from the beginning. :)

~dfn

Thanks that makes sense. I'll review here some more also.

Define "right away". lol And yes, this question was already answered. :) No to "right away" if you mean like tomorrow, or next week, or in a few weeks. It takes time to process. Also yes to it being relatively painless. Call Fidelity NetBenefits (number found online when you log in) and ask them, or the person that was given to you as your Retirement Rep, if they'd help you get your pension.

If you had done this earlier you could have gotten your money by 8/1. Now you're looking at 9/1 as the earliest you can get it.

I also suggest reading, or at least scanning, this thread. Lots of good info if I say so myself. LOL

~dfn

For taking the pension as a lump sum, is it possible to move it right away in to a Fidelity IRA - and is the process fairly painless as these things go ? ( Sorry if this question has been asked in this thread..) . Thanks...

I think it has to be "asterisk followed by and then on a line by itself

• xyz

OP

• hmmmmm... that didn't work. Let's see if * + space works.

OK, let me test

*test

Thanks!

@dfn - for the 'bullet' - lets' see if a single asterisk on a line by itself does it ..

• abcdef

I'll hit 'submit' now..

:) - OP

don't recall :) - but i saw earlier putting asterisks around texts italicizes it.. :) -- Like so for example --

need play around with ordinary text characters and the 'bullet' may pop up again.. OP

How'd you get this site to add a bullet?

~dfn

I guess I'll stick with dfn. :)

'here' as in this forum overall - OP.. ( aka ps1 :) )

Thanks @dfn - really appreciate it - I certainly know more than when I started and some excellent

insights from yourself. Will also look to contribute (more) to this and other discussions -- will stay connected, best - OP ( in case anyone wants to kind of keep track of contributors here - I'll take the handle

• 'ps1' :)

That I do not know. It's a complicated formula that the Treasurer wouldn't give us. I don't even think Fidelity NetBenefits has it but worth a try. But he alluded to the fact they were cutting back on perks so the only way to make sure you have it if it was really that important to someone, was to leave the company to lock it in. Then he talked about the rising rates would also reduce it so that's 2 factors.

Personally I wouldn't risk it and take the money and be happy with that I got. If it goes up after you take it so be it... you don't have to try to "time the market to find the very top". It won't go up by much, I can tell you that. I tracked it for a while. With the Asst Treasurer giving a warning like that, I'd take it very seriously. He was being very candid in this financial club meeting.

hi @dfn - OP here -- I guess the key question is -- How much do pension values decrease as interest

rates increase ?? If they follow bond schedules, then will need do some further analysis here. Any insights as to how much they decrease.. ? Thanks.

My pleasure. :)

dfn

OP here - thanks @dfn. Re 'temptation to overthink things' :) - heck, " I'm an engineer - so I can figger out

this fia-i-nance st*ff.. ;-) " -- and so the motivation - gotta understand stuff, that's what we do :) ;)

Will review and get back, thanks again !

(dfn here)

I think this might answer your Q about interest rates going up and your pension going down: https://moneymatters.net/news-media/articles-education/retirement-planning/386-auto-generate-from-title.html

Specifically... "lump sum benefits work like bonds: They have an inverse relationship to interest rates. Your company calculates the amount of your benefit by taking into account how much money the company will need in order to pay your pension. If interest rates are really low, more money is needed to generate the amount of the pension. As interest rates rise, the amount needed for that same pension becomes smaller and the value of your lump sum goes down. For example, one of our clients has a lump sum benefit of $1,091,000—at least right now. When he asked his company for a projection, he learned that a one percent rise in interest rates would decrease that amount to $980,000."

Also, I THINK It was the Asst Treasurer that alluded to the fact Intel is looking to cut costs, and the pension would be one of those ways. Hence the Q & A I pasted earlier in this thread. That question was directly related to my above comment.

Your pension doesn't just sit there. It goes up and down with the market (and other factors in the calculation) and gets locked down on the date you pick (once you term). But, what you're talking about might be for those that are still there? Now we're back to my comment below "he (Asst Treasurer) responded that if you see a pension today it probably won't be there tomorrow due to rising interest rates that are sure to happen in the future. Someone asked if it would be a good idea to leave Intel now to not lose it (the guy was considering leaving). He replied that if you can leave Intel now ... then do it so you don't lose your pension. "

regarding: the amount sitting in your account on Jan 1 2015 is what you'll receive at age 65 -- including investment returns on that amount..

Incorrect as I've mentioned a few times now. My pension is going up and down on a daily basis. I can see that by logging in and looking. It will LOCK IN on the date I select to take the lump sum (or annuity). I think you're confusing what will/could happen to the pension of the remaining employees if they stick around. They likely won't have a pension option (you currently do) if/when interest rates rise and anything Intel might decide to do with the pension formula (or simply just take it away which is their right).

Just take the dang money and run. LOL Seriously, it's not enough to worry this much over. :) I think you're doing the right thing by asking all these questions and trying to understand it (which is a good thing), but sometimes you can overthink some things. I know because I'm prone to doing that. :)

Thanks @dfn - OP here. Analyzing and will reply - in the mean while - to contribute to this thread ( and thanks for your notes..) - here are several links I reviewed -- and the Intel Jan 1 2015 pension cut-off statement. In that context, does it indicate that Intel is no longer making any pension contributions and that ' pension lump sum' just sits there now till age 65 for everyone.. ??

Exact statement from Intel Fidelity pension plan website:

As of January 1, 2015, the Minimum Pension Plan includes a ceiling on pay and service credits in the calculation of the minimum retirement benefit for employees grade 7 and above.

Does it mean then Intel is no longer making any pension contributions ?? ( i.e. the amount

sitting in your account on Jan 1 2015 is what you'll receive at age 65 -- including investment returns

on that amount.. ?? )

And links-

http://www.intel.com/content/www/us/en/employee/intel-retirees/benefits-programs.html#Fidelity

http://www.intel.com/content/www/us/en/employee/leaving-intel.html

other links ->

http://www.investopedia.com/terms/c/certain-and-continuous.asp

http://www.schwab.com/public/schwab/nn/articles/Lump-Sum-Vs-Annuity-1

good one ->

http://www.consumerreports.org/cro/money/retirement-planning/your-best-pension-payout-options-8-11/overview/index.htm - single life / joint and survivor

Btw - basic query -- why does a pension value ( or payout ) DECREASE as interest rates increase ?? Should it not be the other way around i.e. the pension money is invested by the fund ( Fidelity in this case ) and they can pass on the extra interest monies to you ? Missing a fundamental point here certainly...

ttys / tnx

dfn here....

OP - Here's Fidelity's definition of "Certain and Continuous Annuity" in their own words (copied from the Pension Estimate page:

Certain and Continuous Annuity

Under a certain and continuous annuity, you receive reduced monthly pension payments for your lifetime, with a guarantee that a full ten or fifteen years of payments will be made from the Plan, either to you or to a surviving beneficiary. If you die after the guarantee period, payments stop upon your death. If you die before the end of the guarantee period, your beneficiary continues to receive the same monthly amount that you were receiving until the ten or fifteen year guarantee period ends.

(dfn again)

The 15 yr amount is less than the 10 yr because they have to pay it out for 5 additional years to your beneficiary. They aren't in the business of handing out gifts, they are in the business of making money, so it's in their favor (they are actually hoping folks don't outlive their life expectancies so they don't lose money on you).

Morbid but true.

dfn here.

I didn't pay a whole lot of attention to the annuity portion for 2 reasons.

1) I'm not married so no one to get my check after I pass so not applicable to me.

2) my amount was so small and I prefer to do things myself. You have more flexibility if you're OK investing on your own. If something big happens and you need a large chunk of change... you can't exactly get that from your monthly annuity check, but you can with your lump sum.

With all that said, if you choose the single life annuity, it's for your life. You cannot outlive it. Per the package they'll send you.... "An annuity provides you with an income you cannot outlive. If you live longer than the insurance company's statistics predict, you may even receive more income than you paid for". Granted, you're not buying this annuity (but you could if you wanted to, with your pension or ANY MONEY that you have that you want to feel 'safe' with by buying an annuity with). What that meant was THEY GUESS how long you'll live and hope you don't live longer that the charts say or they lose money on you because they HAVE TO pay you for life if you chose the single life annuity.

The 10 & 15 yr options are for your spouse. Per the handout ""You receive a monthly benefit for your lifetime, but no less than a guaranteed period of 10 or 15 years, as elected. After the guaranteed period, payment will continue for as long as you live. If you die before the end of the guaranteed period, your beneficiary will receive the monthly payments for the remaining time of the guaranteed period.

My take on that is this (I could be wrong so check with Fidelity):

1) monthly benefit is for your lifetime

2) If you die early (before the end of the guaranteed period (10 or 15 yrs in this case) your spouse will receive payments for the remaining time of the guaranteed period.

I think that means if you elect the 15 yr annuity... and you die after 12 yrs, your spouse gets a check for the remaining 3 yrs. Check with Fidelity for clarification.

Food for thought.... You do not have to do anything with your pension. You can mull this over for years. However, when you turn 65, THEY WILL TURN IT INTO AN ANNUITY FOR YOU and start sending you monthly checks. Not sure which one they pick.... (I didn't care so don't remember. In one ear and out the other. lol) I'd think it would be the regular lifetime annuity but you should clarify that if it matters to you.

More food for thought.... if you don't NEED "guaranteed income", and have enough saved, and/or feel comfortable investing the money yourself... why even bother with an annuity? Unless you want your spouse to have a guaranteed check after you pass. (but wouldn't your 401K, IRAs, and life insurance cover all that?).

So.... if you really need "guaranteed income" (what comes to mind to me with that term is someone on a very fixed income and 100% relies on that check coming in or they can't eat or heat the house, etc.).. then why not just take the lump sum.

and more food for thought! lol You can annuitize ANY money you have, at ANY time you please. You can hold off and do this anytime bewteen now and age 65 (when they'll automatically do it for you). If you think it will grow, then you could gamble and let 'er ride. keep in mind what I said about the Asst Treasurer's comment on it goes down when rates rise. And what will rates do (at some point)? Rise, because when they are at rock bottom, there's nowhere to go but up.

Honestly? I think it's all a gamble. You may or may not pick the option that makes you the most in the end (once you know what your magic number is (your death). That was my struggle. It was more a game to me to pick the winning option (the one that makes me the most money, even if $10 more! lol) I'm highly competitive so it was hard for me to say "It's OK, just pick an option that makes sense and you can live with". Hence me asking for the lump sum now (since I think interest rates will rise, therefore my pension will drop). I can live with that. :)

Good luck. Let us know what you decide. :)

Re: dental - my parents are tired and on Medicare, and they have no dental insurance. I don't think there is an exonimal solution out there. They just pay out of pocket for regular cleanings, and shipped around to find an affordable place.

Re: pension/RCP - people hired post 2011 do not qualify for pension of any sort. They only get the RCP balance. For those hired prior, Intel recently (don't recall the year, prob around 2014) stopped adding years to the pension formula. Meaning, your years of service capped at that year. So if you had 10 years experience, that is the number that will be used for your pension validation even when you retire 20 years from now. It essentially zeroes out your pension, but that's not a guarantee.

Hi @dfn - OP here - thanks.. analyzing..

Here are some numbers ( From Fidelity ) for the intel min. pension plan:

-- Assuming 8% annual rate of return

-- Projected age of retirement : 65

Minimum Pension Benefit:

Lump Sum - $91K

Single Life Annuity - $573 per month

10 year Certain and continuous annuity - $546 per month

15 years certain and continuous annuity - $509 per month

So, --

• what is 'single life annuity' -- $573 per month ??

10 year annuity ??

15 year annuity ??

I was assuming "10 year annuity" was a Guaranteed payment each month of $546 and

"15 year annuity" was a Guaranteed payment each month of $509 per month ( makes sense kind

of since 15 years would entail a smaller payment each month compared to 10 years.. ) but then I saw the 'single life annuity' of $573 per month - and couldn't figure out the duration of that one... ?? Comments ?? Thanks..

The $91K lump sum one-time payment I guess is somewhat clear ( and as was pointed out, roll into a IRA etc to avoid taxes as possible )

Thanks

and @dfn again.... I found my notes regarding the pension.

I was right, it was the Assistant Treasurer. Someone asked about the pension plan and he responded that if you see a pension today it probably won't be there tomorrow due to rising interest rates that are sure to happen in the future. Someone asked if it would be a good idea to leave Intel now to not lose it (the guy was considering leaving). He replied that if you can leave Intel now ... then do it so you don't lose your pension. It's the only way to guarantee you'll get it. I found that extremely odd thing to say. Basically... if you want to leave and not lose your pension he'd do it cuz it ain't gonna be around long.

Snipped down minutes from the meeting below (boring parts cut out), which exclude his comment about leaving Intel if you can to not lose your pension. Glad I was on the call to catch that!

Q: Can you bank on the Pension amount you see in your Fidelity account today to be there in retirement?

A: Not really, not unless you’re retiring today. The amount you see actually changes daily. The Pension is connected to your Retirement Contribution plan. You can’t count on that amount to remain unchanged over time; it is constantly recalculating on a daily basis. The amount is all dependent on what your balance grows to and what the interest rates are at the time you retire/take a distribution.

So what you see calculating today is not what you should bank on at age 65. If interest rates rise, your pension will decline.

dfn here....

I wanted to clarify as this isn't 100% correct (so no confusion for folks): It is true the amount continues to grow if you leave it there, but after age 65 under the Intel plan the growth stops.

The amount isn't guaranteed to "continue to grow"... it goes up and down with the market like I explained earlier. So, it could be more when you hit age 65, or it could be less. It just all depends on the actual formula.

I wish I could find my notes when someone came into a financial club (Maybe the assistant treasurer) taking about the pension... He made some comment about changes that will/could happen to the plan and I remember thinking it wasn't sounding good and I needed to hurry and leave so I could cash out before it goes away completely. @ixv already mentioned "Pension contributions were in fact recently terminated for grade 7 and above." I think more changes are on the horizon. At least it sure wouldn't surprise me with all the cost saving cuts. Well, minus all the spending they are doing on TW3. (don't even get me started on that).

Correct on the explanation of the pension benefit; not everyone will have any money there, and the amount you do have varies. As the most recent poster explained, it is a formula based on how much RC you have versus what Intel thinks is required to retire. Hence, longer term employees in higher grades are probably not going to have much. Pension contributions were in fact recently terminated for grade 7 and above. I too decided to take the lump sum and roll it over to a new IRA. First of all, my health s---s and 'lifetime' payments might not be so much and I have no dependents or spouse to inherit rights to any annuity. Plus, the continuation of the annuty is dependent on the viability of the provider--it is not like Social Security so in theory if the insurer goes belly up, you are hosed. It is true the amount continues to grow if you leave it there, but after age 65 under the Intel plan the growth stops. I talked to the Fidelity rep and arranged the payout 'way back in early June and still do not have my rollover. It takes time. They are pretty upfront about that on the website.

dfn again. lol

OK, pension.... You're on the right track, sort of. :) Here's how that works in a nutshell....

That amount you saw today is TODAY'S value of your account IF they were to pay that out at age 65 as an annuity, Keep in mind there's a complicated formula, and that amount changes daily. The way your pension works is it's supposed to offset however much Intel thinks you should have for retirement in your RCP (Retirement Contribution Plan. The one that Intel puts 5% or so into annually). Not to be confused with YOUR 401K that YOU contributed to.

OK, so (basically), when your RCP goes up your pension goes down. When your RCP tanks, your pension goes up. As I said, they have a magic number in mind and your pension fills in that blank.

magic retirement number = RCP + Pension

You have several choices. Take TODAY as a lump sum or annuity (several annuity options so get that figured out if you want an annuity). Obviously (or maybe it's not) if you take TODAY it will be a smaller number than what you're seeing online. Why? Because they are using age 65 as part of the formula.

I ran the numbers for me and I'm going to take a lump sum now and invest it myself (or ask your Fidelity retirement counselor (we were all given one) to help you figure out what your 'break even number' is. Why? Because I feel I can do better investing it myself and I want to start NOW making my money grow. Note that "today" means 8/1. Fidelity needs some time to process. They might even be clear out to 9/1 since it's getting late in July.

IMPORTANT TO NOTE: When I say I'm taking it now, I do NOT mean they cut me a check. DO NOT DO THAT! LOL You'll pay taxes and a penalty. Call Fidelity to roll it over into an IRA (if you're asking for lump sum and not annuity).

Re: actually receive $531 / month then 'forever'

Yepper. However, you have different annuity options if you're married. There are different amounts depending on if it's just till you die, or if your spouse gets to collect after you pass. Get that figured out and explained (by Fidelity) if you have a spouse.

Re: or is that money paid ONLY if my regular 401K savings and Intels' profit-sharing contribution fall below some arbitrary threshold ..?

Nope. Your pension has NOTHING to do with your 401K. It also has nothing to do with the RCP ONCE YOU OPT TO TAKE IT. Once you decide lump sum or one of the annuity options, sign the paperwork and Fidelity processes.... it's no longer tied to anything. it is what it is and will never, ever change. Keep in mind there is no COLA )cost of living adjustment) with an annuity like there is with SS. Also keep in mind you need to trust whomever is holding onto your annuity that they won't go belly up. Sure, someone could take over but who knows what that could me. Just "show me the money!". lol I opted lump sum into my IRA.

One more thing... when you contact Fidelity for them to do the math and send you your actual lump sum and various annuity amounts.... they aren't really "actualy" figures. They are a snapshot of the day they processed your inquiry to give you an idea. It actually locks in on the day you select (8/1/16 for me). I'm hoping the market tanks between now and then so my pension goes up. lol I hve full faith the market will go back up so not worried about it (hence me wanting it to tank just for my pension payout. lol)

Hopefully this helps.

OP here - speaking of retirement benefits - I recall checking the Fidelity 401-K a/c and see the "Intel Defined Minimum Benefit Plan" - presently at $531 / month for myself.

Here's the query - do I actually get that money paid after age 65 ( or whatever age is specified in Fidelity ) - i.e. actually receive $531 / month then 'forever' -- or is that money paid ONLY if my regular 401K savings and Intels' profit-sharing contribution fall below some arbitrary threshold ..? Thanks !

Re: "Intel will credit an additional amount EQUAL to 6-months of pre-65 IRMP premiums into your account (ERP SERMA credit)."

(dfn here) That is a correct statement. That money has already been credited (saw it earlier when I logged in). It's worth 6 months IRMP premiums as they said. It is in it's OWN bucket though which is why I asked the rep 'why is it called out separately?'. That's when she said it was ONLY to be used to pay for IRMP.

But... if you do that, it only takes you 6 months into the year (which is the "2 years of medical" Intel gave us). As I explained earlier, you can't change your medical plan mid-year without a "qualifying event". The rep also said "IRMP ending mid-year MIGHT be a qualifying event, depending on who your carrier is (I'm Providence). I asked if she knew who "might" call it a 'qualifying event' and she (Kristen) said she didn't know.

So basically, once the SERMA Adder has been used to pay for 6 months of IRMP, you're more than likely stuck with IRMP for the remaining 6 months of the year. I sure wouldn't count on it being considered a qualifying event and using that as worse case scenario. But, you'd just use your SERMA to pay for the remainder of the year.

Thanks @dfn - OP here - saw your note ( re clarif for Rule of 75/60/55 - thanks ) . I'd also shared my retired friends' info ( former HP - retired at 65 ,now 75 ) -- he's paying $2200 / yr for his supplemental with United and is quite OK with that. It looks the $1500 / year of service from SERMA would come in handy for that. Other than that, the retirement benefits are not too significant. Here's my friend's info again :

Just for comparison - a good friend retired from HP about 10 years ago ( he's 75 now ) and he was kind enough to provide his numbers-

Medicare Social Security withholding ~ $1300 / year

Medicare 'D' ( Drug insurance coverage ) ~ $700 / year

Medicare supplemental insurance ( to cover 20% copay ) - purchased through United Health Care

in open market ( presumably similar to IRMP ) ~ $2200 / year

Add all above and health payment costs for him are about $4200 year. This covers all health and vision.

Dental is outside all this ( don't have details ). Anyone care to share their dental payments ?? ( completely out-of-pocket or is there insurance ?? )

Any comments on dental too ?

@dfn. We should reconfirm this info or push back. The AYCO slide I have says: "Intel will credit an additional amount EQUAL to 6-months of pre-65 IRMP premiums into your account (ERP SERMA credit)."

But then on the next slide, "Using SERMA", they say that in addition to IRMP, SERMA can be used to pay for individual health insurance, Medicare, Medigap and long-term care.

In other words, to me SERMA equal to IRMP amounts, does not mean it is the only place we can spend it. In the IRMP/SERMA brochure, they don't say anything about IRMP being the only way to use the SERMA.

I don't have dental numbers. All I have is the fact my grandmother was complaining how expensive dental is. So my take away was 'it's not cheap'. lol

dfn here.... yes, that's exactly it. In order to receive retiree benefits you must fall under one of the rules. Rule of 55 gets you all the same benefits except accelerated vesting as I said. You get SERMA, a party, a reward added to your recognition card (better contact them if you no longer have your card.). That money still hasn't been deposited yet but it's too early. I'm thinking sometime in August, maybe even late August.

One thing to clarify or at least make sure you're aware since you said "I take it one can retire then from Intel with all retirement benefits effective ( SERMA, IRMP )".

You do not have to choose IRMP. You can go out on the market and purchase your own and use SERMA to pay (Obviously after COBRA ends on 12/31/17 since Intel is paying for that bill). IRMP is expensive and really only recommended if you have "existing conditions" since it might be cheaper than buying your own under those circumstances. I read that somewhere.

A few years back you could ONLY use your SERMA to pay for IRMP. They gave us no options. Thank goodness they loosened that rule up!

Thanks @dfn - OP here - thanks for the info. Also if could comment on my query i.e.

my query was what exactly do rule of 75, rule of 60 and rule of 55 imply ?? From the reply, I take it one can retire then from Intel with all retirement benefits effective ( SERMA, IRMP ) - as long as one satisfies those rules ?? Thanks certainly for also clarifying the rules ( 75, 60 , 55.. )

Just for comparison - a good friend retired from HP about 10 years ago ( he's 75 now ) and he was kind enough to provide his numbers-

Medicare Social Security withholding ~ $1300 / year

Medicare 'D' ( Drug insurance coverage ) ~ $700 / year

Medicare supplemental insurance ( to cover 20% copay ) - purchased through United Health Care

in open market ( presumably similar to IRMP ) ~ $2200 / year

Add all above and health payment costs for him are about $4200 year. This covers all health and vision.

Dental is outside all this ( don't have details ). Anyone care to share their dental payments ?? ( completely out-of-pocket or is there insurance ?? )

@dfn here again. You're very welcome.

I read just about everything on the topic (I was ERP) and do NOT remember reading that the $6/$12K was for IRMP ONLY. I'm not very happy about that. :(

Well, I was wrong... I just searched my documents and I found a screenshot I made of the Ayco Medical presentation and it's right there staring me in the face:

SERMA Adder: 6 months IRMP Coinsurance Plan Premium

Well, glad that got brought to the forefront. lol sigh

OP here ( 7HA ) -- thanks all - some good info and analyzing..

dfn - my query was what exactly do rule of 75, rule of 60 and rule of 55 imply ?? From the reply, I take it one can retire then from Intel with all retirement benefits effective ( SERMA, IRMP ) - as long as one satisfies those rules ?? Thanks certainly for also clarifying the rules ( 75, 60 , 55.. )

This isn't exactly a correct statement: At that time, Intel will also, for ERPers, add either an additional 6k (single) or 12k (family) to your regular SERMA credits.

it's already been done. I logged on earlier after my phone call (I'm dfn) and saw the SERMA bucket and whatever they are calling that bucket (I don't feel like logging back on for the wording). :)

Oh, brother. Thanks @dfn for info on the SERMA kicker being available only for IRMP. I didn't know that. At least for regular SERMA, the brochure says you can use it for any medical plan premium, not just IRMP. IRMP is 'way more expensive than what's now out there on the marketplace. They say so themselves in the brochure.