What happens if you're 2 years away from retirement eligibility? Will they give you a package to avoid cutting you?
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“If you retire by November 30th, you will get the current interest rates for lump sum pension”.
Just to add a bit more clarity to that:
What secures the current Aug 2021 interest rates for your lump sum is the act of commencing your pension benefit in the 2022 calendar year.
Since Last Day of Employment must be the last day of any month (in our department) and the commencing of pension benefit must be the first day of any subsequent month, then yes, the statement made above is accurate assuming pension benefits are commenced on Dec 1, 2022.
Hope this helps.
If you retire by November 30th, you will get the current interest rates for lump sum pension. Spend the time reading the policy online. So much false news on this site.
Many folks at GM retired just to take advantage of the better rates for a lump sum (before the distribution gets reduced by 20%, or so.).
It is my understanding that the answer to this question is ‘No’ it should not exclude you. Per NESC.
NESC also recommends initiating retirement as early as 180 days prior to leaving if you know your target date as there are things that take a bit of time within the online system.
Any initiation of retirement can simply be canceled up to the last minute should a package be offered beforehand.
It does make me a bit uncomfortable though, assuming that potential packages may be targeted specifically as opposed to offered broadly. But either way, I am following the NESC guidance of getting into the system pipeline so that I can commence no later than December 1.
Good Luck to all
Slight correction; to get money without penalty outside of regular retirement distributions, you can initiate a 72t distribution (also called SEPP). I did this and it has worked out great. Must be out of an IRA, the NESC will not allow this out of a 401k.
I had a planning session with a retirement HR specialist and they stated you can change you mind to retire all the up to final day.
It was not the case last year. I knew of several engineers that had retirement dates set for the fall of 2021 prior to the July announcement. They had to cancel the set dates and redo the paperwork according to the VSSP package terms.
When you call NESC and initiate retirement they will set your date and then send you a packet in the mail. You will also get a personalized and date specific Pension Choices Form that will need to be signed and notarized if you and spouse are taking the lump sum. All of these can be sent back to NESC electronically. I found that I had to scan the 18 page form in 3 packets as the files were too big to send as one attachment.
How do I know..I have been thru the process of setting and cancelling for fear of being overlooked if a VSSP or whatever is offered.
I also verified that the retirement commencement date on the signed and NESC accepted Pension Choices Form is your retirement contract. Your lump sum calculation will use the Aug2021 dates if your commencement date is Dec1 or earlier.
That being said.... I would be real careful doing this all last minute because if there is a mad rush at NESC come mid November you might be SOL.
Also.. direct your lump sum to your 401K to avoid any issues with new banks or possible taxes. If your plan is to roll it to an IRA do it after the fact. If between 55 and 59.5 keep it in the 401K as that is the only place you can take withdrawals without 10% penalty. If you will not turn 55 this year...one option to get to your money without penalty is to set up a 62t.. Consult a financial planner to understand how that work.
No, but depends on what retirement date you select obviously.