Hoping someone who Just went through this can help me understand. I am still here, but fairly sure will also be gone within next year or so. So I am trying to plan accordingly to the extent that I can. I keep seeing statements here and elsewhere along the lines of folks being upset about leaving pension $$ on the table, i.e. as they were let go with 23 years, but hoped to make it to 25. I don’t understand this. Assuming you have a pension (which I do), that balance is your money, you can let it sit or roll it over into something else..,what am I missing? I get that they’d have more $$ there in a couple years , but seems like they’re talking about something else. Am I missing something? If there’s a rule of 75 thing, what does that have to do with vested pension balance?
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Hope you survive, I was 3 years from meeting the Modified Rule of 75, lived near a collaboration zone and was still targeted, pretty sure that’s why. High performer and other members of my team were no where near a collaboration zone. But yet they say it’s location based. Life goes on
Fyi...mobility managers pensions are the worst. Justin saying.
Understand each region has their own pension rules. Responses above may or may apply to you. We all got an email last summer showing how you can “estimate benefit” in fidelity. Go there and estimate a variety of scenarios. Rule of 75 is nice but 55 years old is also another sweet spot.
@sct -- RE: "If you are under the "Cash Balance Formula" only, there are no jumps" ...guessing I may be in the same boat as you, in that I am not seeing any big jump when when I hit 50 with 25 this year or anything beyond what I would expect besides normal growth when I plug other ages in there. I am management under the "Mobility Program of the AT&T PBP ". How do you confirm if you are under the "cash balance formula" (which I suspect I am) or the "pension band formula"? I am reading through the SPD and it's making my head hurt. Thanks
I think these "multipliers" are for the "Pension Band Formula." If you are under the "Cash Balance Formula" only, there are no jumps. I'm under the cash balance and used the pension estimator tool, and there are no jumps at 30 yr service or 50/55 yr old. Unless you qualify for the Pension Band Formula, you are out of luck. I think this is all confusing people who are just under the cash balance rules.
One point on letting your pension sit at T after your having retired - If it isn't 100% funded, there's a risk that it may not reach the full value if the company suffers financially. If you take the pension when you retire and move it to say Fidelity, it is more secure.
fxp- those milestones are for retirement. Of course when you take your pension affects the monthly pay, but not with the "breakpoints" described herein.
Are these thresholds based on when you start taking your pension versus when you retire from T? I plan within the next 2-4 years (max 60 yes old) and live off of returns on other investments and wait to start taking SS and pension
My lump sum amount went up by 45% on the day I hit 30 yrs. I was 48. After that my lump went up, but very slowly.
Non management, outside craft.
@bdn - - Thanks, I am fully aware that Fidelity is the custodian of the Pension and 401K, as well as the many resources available there at Fidelity NetBenefits. What I was lacking was a clear explanation of how pension calculation metrics change at different milestones... some folks and some of the resources called out below do a fine job explaining that part.
For accurate answers all questions should be directed to Fidelity. They are the holders and the ones who calculate the pension benefit. There becomes some differences for those who have the option of an annuity vs. lump sum. There is a lump sum calculation tied to the rate of 30 day T-Bill. Currently the rate was extended into April for any who retire.
OP here, some good information, especially from you @uoh ...I think that is the piece I was missing. Due to hit MR 75 this year with 25 years of service in June, turn 50 in August. I need to do some homework. Thanks
If you have access to the tspace Your Money Matters community, there is a great thread there ("pension - what specifically happens at age 50?") that asks and answers this question in great detail.
It's about 2/3 of the way down the first page as of this post.
Isn’t it minimum 55 years old for management for a full pension?
Modified Rule of 75 or MR75, rules for AT&T are:
--30 years of service and no age requirement,
--25 years service and minimum age of 50
--20 years service and age 55
--10 years service and 65.
You need to meet both criteria minimum for service and age, it is not just adding service plus age to equal 75. Examples:
--Does not meet MR 75 - 23 years of service and 52 years old..( add 2 more years and meets MR75 with 25svc and 54 years)
For my pension plan, I fit the 20/55 rule in 2 months. If I don't make that 2 months I lose 55% of a retired pension level payout. That assuming payout immediately on termination. If I leave the pension until I am 65 for payout I get the 100% retired amount.
OP: the reason is that there are "multipliers" used when you calculate your pension amount at certain dates. For example, when you are 54 years+364 days old, your pension is significantly less than when you are 55 years+0 days old. That's because you cross one of those cutoff points and the multiplier changes.
One of those cutoff points happens at MR75, but there are others depending on your plan, service, agree, etc.
For many people, big cutoffs are at age 50 (which is MR75 for those with significant service), at 30 years service, and at age 55.
So yes, it's "your" account, but the pension plan modifies the payout amount based on when you retire. Certain managers, depending on the legacy company, have some cash value in their pensions (usually not a lot) which is always theirs, but the majority of pension funds are subject to the above calculation.
It is in the pension plan description, but as some pointed out, it's often easier to model your pension at Fidelity at different dates. Where you see it take a significant jump, that's when you're crossing one of those thresholds.
You can go into Fidelity to Estimate Your Benefit as of different dates under Pensions. You can also save these estimates, as well as compare them. Be sure to print out your estimates, regardless. You do not need to adjust the interest rate or input annual raise amounts. Now, go do it, because you must become familiar with this exercise and with your numbers.
I have the same question as OP. I am 4+ away from my targeted date of 60 -- how does one know what the value of the pension will be if they wait til x date to leave? Is that something Fidelity confirms. I went through all this analysis a couple of years ago for my retirement plan but cannot remember that detail. Also, for @ors that made the statement below -- is that amount based on the 2018 interest rate?
You’re not missing it the day I hit 25 years my pension goes up 375k. So if they lay me off at 24 years I’ll be p-ss-d.