AT&T is headed in the same direction; how long it will take no one can be sure. I really want to take the annuity. A monthly deposit is extremely comforting to me. Am I being foolish in thinking AT&T will honor this final commitment? What happened to MCI Worldcom's payouts?
21 replies (most recent on top)
Can I get my pension payout with bitcoins?
@ab nasty?
I guess it is okay to come here and scare people because your clueless and imply that ATT could lose your pension like Worldcom... When that is not possible...
1/2 the poster are also imply similar sentiments. Be an adult and learn how your money works
Case against annuity is inflation, while your annuity will never change, inflation will always rise so you’re $1000 or $2000 a month will be worth less each year. If you don’t think you can manage your own money, put them all into CDs and do a ladder, one year, two year three year four year five year, etc.. At least you gain some interest and may be invest the rest in an equities for greater potential.
@b3 A lot depends on which company / region you were hired in, but at least for my situation, the monthly pension IS an annuity. The choices are a lump some paid to you or they use that amount to basically purchase a lifetime annuity, which pays you monthly until you expire. While it is possible you live long enough to get more than the lump some out, it can in no way compete with a lump sum well invested. It comes down to discipline. If you can manage investments well without going out and blowing it all on rims, then lump sum is the way. If you can't trust yourself to do that, go with the annuity. By the way, if you take the lump sum, you can always just buy an annuity yourself and you might get a better deal that way.
@OP Fidelity guys I'm working with for planning is cash out. Engage them they can help based upon your situation. Good Luck!
what is the difference between an annuity and just taking monthly pension payments over lump sum? Is an annuity and monthly pension payments from
AT&T much different ?
I've heard many stories of people who took the lump sum and paid off their house. Then discovered that the money was short after a few years and had to return to working. Whole lot of people in their 60s and 70s working because they made poor choices about retirement money.
Every one is different. If your life expectancy is short I suggest lump sum. If you are going to live forever, take annuity.
Suggest you talk to a financial advisor who can answer your questions. I often read a lot of conflicting comments here about what's the best choice for retirement funds annuity vs cash out. One size does not fit all. A pension annuity can be a solid choice especially if you're going to receive a decent distribution from your 401 (IRA) investments and if your social security payments are decent. That monthly annuity that doesn't fluctuate is attractive. This is the proverbial 3 legged stool that you may have heard about. You can continue to invest your IRA in the market and use your social security and annuity to live on.
Again, everyone's situation is different.
I'd also add that I receive an annuity from Verizon monthly as a former MCI employee.
Don't listen to the opinions of others. Do your own research and talk to a certified financial advisor.
I do realize not everyone is entitled to an AT&T Pension plan. For those that do, I thought I would post this summary if it may help.
You might review this article:
https://files.consumerfinance.gov/f/201601_cfpb_pension-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 filter enter DATA on these two fields and then perform a search
Enter PLAN number as: 006
Enter EIN as: 431301883
A listing of filings will come up and you would review the last plan submitted.
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.
And finally, AT&T may transfer your pension (If taken as an Annuity), to an Insurance company (Such as Athene). This has already happened for over 90,000 who were drawing the annuity.
I was one of them and this went very well with no issues, still getting my monthly checks.
Good Luck with your decision and hope this may have helped.
Agree with @ac, PBGC covers you, unless AT&T does more of these sales to fly by night insurance companies once you are taking your pension.
Then you'd be covered by state guaranty funds. Depending on the state might only cover 250k or 500k. Which isn't enough for many long timers.
My FA said it was close to a wash, lump vs annuity, so I took my money and ran.
You also need to think about how you will actually fund your retirement - how long you project it to be (if long you need inflation protection), what other assets you have to draw from etc. All good discussion for an FA to have with you. No one here knows your situation.
In terms of the "you don't have to be so nasty" poster, you must be new here!
@OP In most cases, if someone is already receiving an AT&T pension, the pension payments do not simply stop if AT&T were to go bankrupt.
AT&T’s pension plans are generally covered by the Pension Benefit Guaranty Corporation (PBGC), a federal agency that insures most private-sector defined benefit pension plans.
Here’s what typically happens:
- If AT&T remains financially healthy, it continues paying the pension.
- If AT&T were to enter bankruptcy but keep its pension plan, payments would usually continue.
- If AT&T terminated an underfunded pension plan during bankruptcy and the PBGC took it over, the PBGC would continue paying benefits, subject to federal limits.
For most retirees receiving a normal AT&T pension, the PBGC guarantee is high enough that they would receive all or nearly all of their benefit. Very large pensions or certain supplemental benefits can sometimes be reduced if they exceed PBGC limits.
AT&T’s pension plan has historically been one of the largest corporate pension plans in the United States, and the company has continued to fund it. A bankruptcy of a company as large as AT&T would be a major event, but retirees would not typically lose their entire pension.
But always check with a financial advisor you trust…
poster: Post ID: @a1+1kvv1qpjs
You don’t have to be so nasty. Can’t we help one another on this site? Some of us don’t know or as you say “have a clue” how the pension works.
Maybe someone with a kinder heart can help answer some questions:
Is the concern mostly that there won’t be money to fund pensions or lump sum payouts OR if current paying pensions will be stopped.
We were always told that people receiving pension payouts were protected by pension law. Can someone who knows this help enlighten those who do not know? Thank you.
@a8 Thank you. That's information I can use to calculate risks.
The BellSouth lump sum is not as robust as other RBOCs. If my lump sum was over $500k, would be a no brainer.
Blackrock doesn’t care about what you want. Take the money and run before it’s gone.
Friend of mine oversees the fund. He told me it won’t last more than 15 more years.
I took the cash. I have ZERO faith in AT&T caring about anybody or their ability to run a vibrant company
Most trusted FAs always advise to take the lump if it’s available to you.
Do some research.
I believe worst case current employees might lose the option of a lump sum and the monthly benefit may get capped if you are/were a high roller. See: www.pbgc.gov
Take the cash balance and invest it for a monthly return. Or buy another annuity but remember, you lose your principle with the annuity. When I retire, I will take my cash as fast as I can. ATT is the worst financially managed company in history.
Maybe research how the pension works. Seems you have zero clue...