Thread regarding AT&T layoffs

While interest rates play have a big affect on segment rates corporate bond yields also affect rates as well. Segment rates were creeping higher well before any interest rate hikes took affect so depending on your age it could be a dicey proposition trying to wait this out

One mentions legacy company. Great point, there could be differences between legacy companies along with bargained/non-bargained/management.
Bottom line, call Fidelity. They can tell you the exact guidelines for your exact situation.

Knowing your options and timelines is key to your decision. I'd suggest, calling soon to help get yourself mentally prepared to leave and be able to do so when its best your you.

With Legacy SBC, you can get your entire package ready ahead of time, all without the knowledge of anyone in T. It is up to you, to follow the plan, or if it is no longer something you want to do, then continue working

It depends on which legacy company you were hired into. Legacy T has to take the lump sum on the first day of the month after retirement so you need to retire on the last day of November and take the lump December 1st. The SBC company's can take the lump the next day after retirement or the 1st of the next month. These people can retire up to the second to last day in December. Make sure you know where you stand on this from your specific SPD or it could cost you thousands of dollars.

I think it may different for some bargained for employees. I s/w Fidelity last November and when he inputted any off roll dates in December the 2022 rates were kicking in. I’m legacy T craft

Someone was asking about lump sum collection and timing of last day.

I don't imagine its any different for management/bargained but of course could be.

For management, all you have to do is
Leave by Dec 30, which makes your commencement date Dec 31, which is the current year.
You need to set this up with Fidelity. Fidelity won't tell T anything. You'll need to sign some paperwork and if married have a document notarized.

I did all my paperwork in September, chose Dec 10 or so as my last day. Ended up extended my last day to December 27th.
Got my payout by the 3rd week of January

I left and the first segment rate was .51 ... so its 6 times higher than that now in only 15 months... that being said you get more yield now on a smaller lump. You are seeing CD's at 3 and 4% and corporate bonds from good companies at 4 + and BBB companies at 6% ... so it's really a mental thing more than a monetary thing. STICK TO YOUR PLANS and don't do anything d-mb. I wouldn't be shocked if rates go up this year and then within 2 years are back down. All the debt to service nationwide by the government and private companies will make it impossible to leave interest rates up for years on end.

So to collect the lump sum, does one have to be off payroll in Nov and collect in Dec?

Or be off payroll in Oct and collect in Nov?

Called fidelity twice and received these 2 answers.

I would think, be off payroll in Nov and collect in Dec as the Nov 2022 segment rates are not published until Mid to late Dec.

Is there anything documented online regarding timing?

“There is a high probability that once the country goes into recession the fed will lower interest rates. If you stay through 2023 your lump would likely go back up”

This is age dependent and a not a short term answer for those 60+ yes things may get better but will probably take at least a minimum of one year if it two or more. Again this is age dependent

There is a high probability that once the country goes into recession the fed will lower interest rates. If you stay through 2023 your lump would likely go back up.

That is correct. Cash balance and lump sum are completely different. I do believe all lump sum defined benefit plans are in one way or another based on the segment rates

My lump sum, for whatever reason, does not seem to be affected by the interest rate changes?

For folks with a cash balance pension plan, the balance (lump sum available) won't change based on prevailing interest rates

One was asking about what effect does interest rates have on pension. So, think of it like this, with these assumptions
55 years old
monthly pension of $3000/month
life expectancy 25 years

If interest rates were 0% per year, it would require payment of $900,000. Just a simple 2512$3000.

now, imagine, the company can earn interest on the money they set aside for you, well they only need to set aside a portion of that $900,000 to make you whole.

Higher the interest rate, the less they have to set aside.

The money they would set aside is probably close to the amount of the Lump Sum payment.
That Lump Sum calculation is not decided by the company. There are laws or regulations by some US government entity. Think its IRS, but not certain.

I don’t understand what you guys are talking about with the pension so forgive me. How are our pensions impacted by the interest rate hikes?

My lump sum, for whatever reason, does not seem to be affected by the interest rate changes? I know there are differences in how this is calculated between the various legacy companies.

Mine lump sum decreased more than 1 yr salary! I'll be working for free next year if I don't leave in 2022. Or I'll be forced to take the monthly annuity after 2022. But Stink hates the pension obligation and will do anything to get rid of it.

Mine’s officially down over 20% now. Wait until you see June’s rates next month which will factor in the 75bps rate hike

My lump sum drops 19% when I plug in the new rates with a 1/1/23 retirement date at Fidelity site. I’m assuming most are in the 18%-20% range right now. Wouldn’t surprise me if that gets to 25% by November. I’m already at rule of 75 and am over 55 years old. Tough decision. $200K drop. Might make sense to take the inflated lump sum and buy s&p 500….later this year. I’d like to work 3 more years at ATT, but hard to stomach a $65K pay cut over each of those 3 years….if rates stay inflated.

I do like the "Animals" reference in that post...nice touch!

And this is why Stink is not doing any layoffs he so enjoys! He will have enough people leaving before November for free! No severance needed!

I've gotta get out of this place, if it's the last thing I ever do.