Thread regarding AT&T layoffs

Pension Lump sum

So back in October shortly before being laid off i ran different pension scenarios with each reflecting same last day on payroll, Oct 19 and 3 diff pension start dates, commencing at age 63, 64 and 65. I printed it out and made note of the respective lump sum amounts with the idea of waiting til i was 65.. Just checked Fidelity site and out of curiousity i ran recalculate and my lump sum amounts diminished by approx 9-10%!

At risk of being ridiculed for my lack of knowledge, can someone explain why the drop when all assumptions stayed the same? Thought it was based on a fixed interest rate.

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Post ID: @OP+WXViD4t

19 replies (most recent on top)

Does anyone know if att will be offering lump sum payouts in 2020? I don’t work there anymore and am about to retire and would like my money out of their and also don’t want their paltry monthly amount they are offering from Fidelity.

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Post ID: @8Mlea+WXViD4t

If you stay in ATT (old Bellsouth) pension they are now buying you an annuity AND it is NOT guaranteed by Pension Guarantee anymore. I do not trust any of them anymore. Over the years every buyout is worst than the last. RUN!

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Post ID: @1Upit+WXViD4t

When interest rates increase (as they have due to the Fed's changes) the lump sum decreases. AT&T have to put less $ up front in the accounts to get the same none-lump sum payouts over the course of a person in retirement. It is really just link an annuity. Oddly the same will be happening to the lotteries (PowerBall etc.) with people who choose cash out over an annuity.

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Post ID: @3fcv+WXViD4t

3olk If you are non management and union the contract usually has 1% raises every year. If your previous calculation was from last year that might account for the increase. As far as I’m aware the interest rate has no impact on the monthly annuity for hourly employees.

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Post ID: @3nio+WXViD4t

Do interest rates impact the monthly annuity calculations. I recently saw an increase from a previous calculation using the same dates. The Monthy pension Annuity went up?

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Post ID: @3olk+WXViD4t

Definitely talk to a financial planner. Pensions in this company vary greatly based on what business unit/position you are in. For some it's a huge chunk of retirement planning. For others it's just some extra cash to make a decision on.

I took a lump sum a few years ago on a buyout from an old employer. Glad I did as the market has been great since then. But age, amount, and life expectancy all factor in. The advice on here is good, but be smart and have someone in the biz break down your options. Personally, I would take the money and invest it myself, but that's just me. I still have time to lose some and make it back.

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Post ID: @3yvf+WXViD4t

right, roll it over and don't let at&t screw you over again in the future when they go bankrupt. i'd trust the market more than randall.

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Post ID: @3ywn+WXViD4t

Pension is based on Composite Corporate Bond Rate, you should of checked with Fidelity or your financial advisor for 2019 rate. It went up, so payment goes down. I know of 13 people in the Midwest Construction that retired end of 2018 because they would of lost money in their buyout. They were leaving in 2019 anyway so would not of made up the loss.

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Post ID: @2zzg+WXViD4t

What you do NOT want to do is to leave your pension funds in ATT’s control. Roll them over into a qualified account, get them out of ATT’s hands. Consult with a financial planner to avoid tax implications.

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Post ID: @2mxh+WXViD4t

For those single folk out there, health and personal circumstances aside, I wish you luck on making the right moves regarding your pension money. But for the married people out there, who don’t really need to touch these funds....leave them be, they will be there when you come to full pension age, or sooner if you choose. You can choose your payout percentage with spouse in mind.

Think forward to having a steady "cash flow" when retirement sees two Social Security checks along with a Pension check, all on a regular, monthly basis....no matter what the stock market is doing!

Watching the market every day, do you really want to extract your Lump Sum, lose a percentage and then think you can outperform the market?

And as a side note, if you have your investments in Fidelity, why withdraw your Pension, they are the ones that already manage it.

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Post ID: @2coy+WXViD4t

Don't kid yourselves. The company will honor nothing. If you didnt take your pension in 2018 , you will receive the reduced payout.

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Post ID: @1bih+WXViD4t

Your pension is based on the corporate bonds rates which were announced by IRS around December 18th. When corporate bond rates go up , your pension distribution goes down. Its recalculated each year and announced at the tail end of the year , effective the following year. In this case announced 2018 , effective 2019. In a strong economy , the corporate bonds rates will increase and your pension will decrease. I left in 2018 because of this.

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Post ID: @1mcg+WXViD4t

My lump sum took approx 6 weeks for me to receive. I was surprised to see a check mailed to me.

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Post ID: @1roq+WXViD4t

anyone know how long it will take to get that pension lump sum rolled over? is it days or weeks or some more red tape i need to jump through so that i don't miss that deadline? any suggestions on how not to do it so i don't screw it up?

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Post ID: @1ftb+WXViD4t

Have you seen pension plans going into default ? I did...and quite a few. At that point the govt will step in and pay whatever they consider is "fair"....so, the way "T" is going I would not be shocked to see this scenario happening. Remember, this is NOT the ATT. This is SBC ! and Randal is the one in charge.

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Post ID: @1nsm+WXViD4t

Thanks everyone. I guess i know what i have to do.

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Post ID: @lxb+WXViD4t

Interest rates increased on 12/15 which would reduce your lump some. My scenario from before 12/15/18 to post 12/15/18 was a $7k reduction per $100k. The company will honor the old rates until end of March, 2019 hoping people take it.

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Post ID: @pky+WXViD4t

The extended interest rate is only for Legacy SBC and Legacy T. Not all companies / pensions are given the same opportunity.

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Post ID: @ruq+WXViD4t

i spoke to fidelity regarding the same issue recently. they told me that the new calculations are using the new life expectancy rate tables for 2019, and some type of interest rate changed, which lowered the pay out for the full lump sum. it seems to be a significant decrease. they also told me we should have until end of march to get our lump sum at the old interest rate. my advice is to get with a financial planner and fidelity asap.

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Post ID: @ehp+WXViD4t

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