AT&T is saving millions by letting managers go who are within 12 months of modified rule of 75. This will impact the folks getting moved to IBM as well. I am glad to be out of there but my payout drops 400k when I have 2.5 months to get to 75. Really....
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From a previous post
To end the 75% funding claim repeated from the news articles- No participant in any PBGC covered Pension Plan can get a Cash Balance payout if the plan funding level is below 80% per the Pension Protection Act of 2006. AT&T continues to payout millions to retiring employees that request the cash balance method of payment.
From The IRS Filing that AT&T is required to make yearly for the Pension Plan. I would imagine the wireless tracking stock is included here. I hope just because it says 75% in a news article someone might fact check it before you post it as fact. The Intern that wrote the article might not have passed math class..................
Funding Target Attainment Percentage
2017 96.5%
2016 98.5%
2015 98.7%
You might review this article:
https://files.consumerfinance.gov/f/201601cfpbpension-lump-sum-payouts-and-your-retirement-security.pdf
There are PRO’s and CON’s on deciding on a Lump Sum vs. Monthly Annuity. Everyone’s situation is different with intangibles involved in the decision process. Choose wisely and visit with a Financial Advisor or start educating yourself on Retirement Planning.
Ask yourself what are your plans to generate a steady source of Retirement Income, outside of Social Security. Pensions were designed to help in that regard.
Lump Sum payments benefit the company on releasing them from future obligations, shifting the responsibility to you.
Also, every year the company must file a report to the US Department of Labor outlining the Pension plan financial specifics and health of the plans. There are multiple Pension Plans AT&T provides depending on the affiliate you are employed under. It is a very interesting report to read. All plans roll up under the Umbrella Corporate AT&T Pension Benefit Plan.
You can find the report at this location.
https://www.efast.dol.gov/portal/app/disseminatePublic?execution=e1s1
You only need to enter DATA on these two fields and then perform a search
Enter PLAN (PN) number as: 006
Enter EIN as: 431301883
A listing of filings will come up and you would review the last plan submitted for the Plan Year ending December, 31 2018.
Also, the company produces a condensed annual report summary for the past 3 years (ANNUAL FUNDING NOTICE for the AT&T PENSION BENEFIT PLAN). This report should be available on the Company Web site (or via Fidelity) under Pension Plan Documents applicable to the plan you fall under and should be showing a summary for Plan years 2016, 2017, and 2018.
Also, these sites may also be of interest on the Pension Benefit Guaranty Corporation (PBGC).
https://www.pbgc.gov/
https://www.pbgc.gov/news/testimony
Corporations pay a Premium PBGC to fund this Agency Responsible for Insuring Corporate pension plans. The AT&T Pension plans are categorized as SINGLE EMPLOYER Plans.
There is always the option that the Company may terminate the plan.
There are two ways they can terminate the pension plan.
First, they can end a plan in a “standard termination,” but only after showing the PBGC that the plan has enough money to pay all benefits owed to participants. Under a standard termination, a plan must either purchase an annuity from an insurance company (which will provide you with periodic retirement benefits, such as monthly for life or for a set period of time when you retire) or, if the plan allows, issue one lump-sum payment that covers your entire benefit. The plan administrator must give advance notice that identifies the insurance company (or companies) selected to provide the annuity. The PBGC’s guarantee ends upon the purchase of an annuity or payment of the lump-sum. If the plan purchases an annuity for you from an insurance company and that company becomes unable to pay, the applicable State Guaranty Association guarantees the annuity to the extent authorized by that state’s law.
Below are links for issues on the State Guaranty Associations
(each State has their own guidelines, Coverages, Benefit Limits, etc)
https://www.nolhga.com/
https://www.nolhga.com/factsandfigures/main.cfm/location/stateinfo
Second, if the plan is not fully-funded, AT&T may apply for a distress termination. To do so, however, they must be in financial distress and prove to a bankruptcy court, or to the PBGC, that they cannot remain in business unless the plan is terminated. If the application is granted, the PBGC will take over the plan as trustee and pay plan benefits, up to the legal limits, using plan assets and PBGC guarantee funds.
Hope this may have helped.
You should be thankful you didn’t start with ATT Wireless, we did not start being eligible for a pension until Cingular bought us out. Been here 22 years and my one time lump sum is $72k, I have met the MR75, and would have to pay $650- month for health benefits!! You all have no ideas how lucky you are to have great pensions and benefits. So sad we are no really one company at all!!!
Technically I had 75 points with age and years of service combined but fell short 14 months because I was not 50. I had 26 years and 4 months and 16 days of service along with 4 years as an rlt summer helper and was 48 years old and 10 months when let go on March 29th. It s—s bad but I had a good ride along the way. Saved enough in 401k to utilize 72t SEPP and will be able to pay all my bills. Best of luck everyone..
I can relate to being SCREWED on my Pension. 2.5 yrs to make MR75 and now THIS!!!!. My pension now will have to wait until 65 yrs to get without any penalties versus if I would have hit MR75 I could have ditched out in 2022. I'm getting f....out of basically $400K.
"....right before that big pension jump you get at 50 years old "
This is not the case for everyone. I turn 50 next month with 25 years of service, There is no big "jump" in my pension. I came from SBC/ Cingular (non bargained for). It's complicated but was explained very well in a post a few months ago. Our plan is not significantly impacted by these "breakpoints" folks talk about, there is no significant "jump" at any of those milestones...but we do have the same choices as other re: full payout, partial with annuity or all annuity.
While it appears I will be reaching MR75, I don't see any cause for celebration. The high deductible medical is very expensive (thankfully I am on my spouse's), as are any "discounted" plans. I'll do significantly better with Straight Talk or Xfinity Mobile. I'll be taking the lump sum pension; I'd have gotten that anyway, along with my 401K. What benefit is there to being "retirement eligible" again? I feel like I am missing something the way folks carry on about it.
You must be MR75 - 55 and 20 years of service or greater to get the significant bump in pension. Pension is not covered by MTP. Even a day short and your SOL - on all packages AT&T states they strongly advise reviewing with an attorney before signing - may not get all the pension and lose a significant amount of it in attorney fees. So need to decide for yourself if it’s worth it - AT&T leadership had to make their decisions and we need to make ours. Ouch.
Amertech was the hiring company and we have 3 choices...full payout, partial with annuity or all annuity. Each lec may be different. I know Cingular managers have bad pension.
Post ID: @105m1EWi-kfr
Is right . Most of us have a cash value pension. If you got hired after 2001 it’s cash value it vested after 5 years and has nothing to do with rule of 75 and the medical offered in rule of 75 is not cheap like you got as an employee. You lus just like others have said you don’t get the discounts after you leave either.
I came to AT&T via Cingular path from a non SBC/Bellsouth legacy company. I can see where I can obtain rule of 75 however no incremental benefits. I have a cash balance pension at 5% per year and doesnt seem to matter what age I am, retire, or threshold it still continues as same rate. As I understand if qualify for rule of 75 no real medical benefit when I retire. I guess those from legacy Bell operating companies have a different plan.
@qre , what this poster is talking about, which is very real, is called, The Cliff. When considering when to retire, you gotta look at where you are in terms of where on the cliff are you. Still heading towards it? Not a good time to time voluntarily). Right at it, good for you, time to look elsewhere if its bad where you are and you feel that you got more good years of service for working for someone else (the Man). Over the cliff, why are you still here? Leave, and retire, or work elsewhere and get more retirement investment for your time working.
For MR75, if you are age 50 or over, and 20 years or more of service, where your age + years of service equal 75 or greater, then, you have met MR75, and are fully eligible with no penalties for your pension. The key, to be MR75 compliant, is age 50+ and years of service 20+, and once you cleared that and at 75 or more, you're gold.
There is also a point beyond age 55 that your pension growth really drops off. If you are 58 years old with over 30 years service, working several more years won’t give you the same dramatic increase as compared to say age 50 to 55. Talk to your financial advisor, there is a point when it pays to cash out of AT&T. The company seems much more interested in targeting those employees in that 45-49 year old range though so they can let you go right before that big pension jump you get at 50 years old and then at 30 years plus service.
Go into pension calculator and look at your projected lump sum/annuity prior to age 50, and or 30 years service and then look at the jump it makes after those dates..... it’s a huge difference, as in hundreds of thousands of dollars difference. The company can do the math too, pretty easy to see why they have targeted employees close to the age 50, 30 yrs service and modified 75 bench marks.
AT&T MODIFIED RULE OF 75. You are eligible for a vested pension after 5 years of service, but your benefit will be negatively affected if you do not reach the age AND service breakpoints.
The modified rule of 75 does apply to management pensions. Look it up.
kfr - you are technically accurate as the pension plan doesn't specifically use the words MR75. But there are similar 'penalties' in the pension calculation if you, for example, don't reach certain important breakpoints that are also used in MR75. So if you, for example, stop working before age 50, or start taking your pension before you reach 30 years of service (both important numbers in MR75), your pension payout will be reduced significantly. I think the OP has merit, though it's not technically MR75-related.
Pension benefit has nothing to do with the rule of 75. That rule is specific to medical coverage, which you may or may not be eligible for. Your eligibility is clearly outlined in the plans SPD which you will find in the documents section on the Fidelity site.
If you are within 2 months of rule of 75, do you get any insurance benefit as the MTP would provide?