AT&T doesn't prefer a lump sum payout so to not have to manage other people's money. Fidelity does that. Not to continue monthly payout systems. They want you to take a lump sum payout to save a significant amount of money over time. If I live 20 more years, my pension payout over that time is about double what my lump sum would have been.
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Unless company files bankruptcy should be good under the PBGC. One question for people...
See so many posts where they say take the pension buyout. Bad advice in many cases. Depends on individual need and life expectancy. In my case if I live 25 years and I took the buyout and invested conservatively I would lose money over that time. If I lived 15 years it would be a different story. Take your buyout and pair it with a conservative investment return, bump it up against life expectancy and you can easily see what makes sense. So many people look the pension buyout and go "well hell I cant get a 10% return on investment year over and year and do better than my pension. Maybe if you take invest in higher risk...but if that and social security is your only income...good luck with that.
Yes up until the company files bankruptcy. Then it could be under the umbrella of PBGC, the government insured pension. Only downside to this is that you are not guaranteed a 1 to 1 payout of what you are owed. Reading back on some pension funds that they took over show as low as 60 cents on the dollar paid out to pensioners. It could go lower if the fund is not able to stay solvent paying higher amounts out to pensioners
If you have a chance, take the money and run. If the pension or company goes bust, you will get pennies on the dollar. The percentage you will wind up with will depend on the federal or state laws in effect and the circumstances under which the house of cards collapses.
Did you say “guaranteed””? There are NO guarantees in life. Take your money and run!
Most all management employees who are in the plan should be vested and have money available to them upon leaving. There are actually several plans that have different vesting rules, and different payout options. AT&T would prefer a lump sum payout so as to not have to manage other people money and continue monthly payout systems.