Thread regarding Verizon Communications Inc. layoffs

Isn't the money that is in the "Cash Balance plan" part of the pre-2006 pension plan still there and available? (just frozen in 2006)... You won't get the OPTION to pick between either the later Cash Balance plan or the earlier traditional monthly pension, with the lump sum option based on the original pension formula's. Those with more that 15 years in 2006 still qualify for the old pension formula's. And pretty sure you always needed 15yrs to qualify for any Retiree Med beni's. So likely no real change there, as it wasn't earned as of that date.

But if you had less than 15 years of service in 2006 when they froze the pension, They took whatever money was in your pension. They told you you no longer had a pension. Your pension benefit was $0. How was that legal?

When they took away the pension, they VERY generously told us that what was already in there was ours to keep (as if Federal law gave them any alternative). So they basically just stopped new funding, and I'm sure there was wording in the original document that these sort of changes were OK.

Unfortunately, this seems to be the way most companies went, why take the risk with a pension when you can force the risk to the employee with a 401(k)

How was Verizon in 2006, able to take away the pension of anyone who had less than 15 years? I would have thought that the pension was at the very least an implied contract that you KNEW was yours as part of your compensation.

If you turn 55 this year and leave, you can pull from your current 401k without the 10% penalty. The 1099-R should show a "2" in Box#7 that indicates > "Employee/Taxpayer has not reached age 59.5 and it's KNOWN that the distribution is a Roth IRA conversion, OR a distribution from a qualified retirement plan (401k) after separation of service, in or after the taxpayer has reached age 55"

The 401k exception only applies to the 401k of the company you actually separated from at 55+, (code "2" on 1099) If you have another 401k from a different company the 10% penalty still applies to any money withdrawn from that account before 59.5. (code "1" in Box#7 on 1099-R)

Also remember if you have any shares in the "VZ-Stock fund", you can always opt to take the VZ DIV (as opposed to reinvestment) at any age, working or not. (Code "U" in Box#7 on 1099-R) I did that a few times in my 30's just to help get myself debt free.

Also note if you are planning to dip into the 401k after separation between the ages of 55 and 59.5, you are going to have to actually LEAVE IT in the Verizon 401k plan. IF you roll the money to an IRA, the exception rules no longer apply. Withdraws MUST come from the 401k account associated with the Employer you separated from at 55 to qualify. Its a trade off... but on the bright side, while you wait to turn 59.5 the VZ 401k Fidelity account fees are pretty low. Likely a lot lower than the fees charged by the financial advisers who are dying to get their hands on your retirement account.

If you are retirement lump sum eligible, but under 59.5, you can opt to roll the Lump Sum into your 401k to gain access to it between 55-59.5. Then at 59.5 you can always roll the whole account over to whatever IRA you want. And if you don't actually need any money before your 59.5, you can roll the whole thing to any financial adviser you want right off the bat. Just remember if something pops up between now and 59.5, you will have to pay the 10% penalty. Just some more food for thought.

CBV is correct if you leave in the calendar year that you turn 55 you do not need to do 72T. You are able to take once a year withdrawals penalty free till 59 1/2 years of age. In reference to the op question of are pensions safe they are protected by by ERISA law. Companies in general dont like ERISA but nonetheless it is the law and yes what has been accrued by an individual is protected by federal law. They can of course freeze future accrual such as what happened to VZ management but cannot steal what has been accrued prior to that date. A pension is not given as some sort of optional gift. A pension is earned deferred compensation that the company is liable for.

Withdrawing from your 401k before 59 1/2 penalty free is called Rule of 55. Google it. It can only be from the 401k of your last employer but you can roll in other 401ks to boost the pot if you need to.

https://www.thebalance.com/what-is-the-rule-of-55-2894280

@fkh This article states you can avoid 72t if you are 55 or over. I've read this in more than one place and will discuss with my advisor.

if separated from service from the employer sponsoring the qualified plan in the year you would reach 55 or later, distributions taken directly from the plan are not subject to penalty, and a 72t plan could be avoided.

https://www.goodfinancialcents.com/72t-earlty-distribution-rules-401k-to-ira/

http://www.gcbaonline.com/retirement/understanding-irs-72t-withdraws-rule-calculator

Well, my broker is EF Hutton, and EF Hutton says...

Kidding aside, tapping a 401k prior to age 59.5 has negative financial repercussions, according to my financial advisor.

I work with a lot of the people outsourced to IBM they were able to rollover there pension and 401k

@ ubz Not true. Go read up on rule 72. You can withdraw under certain conditions at age 55, but you are locked in for a minimum of 5 years of distribution once you start. Got the info from my financial advisor.

@lnn, you are wrong! If you take a withdrawal from a 401K prior to 59.5 years of age, you will pay a 10% penalty in addition to the required taxes. I assume you are not a tax advisor.

I believe tho if outsourced no matter your age u can do a rollover without penalty many of th folks outsourced to IBM did this

If your 55 or older when you leave Verizon you can take 401k withdrawals without penalty.

I asked my financial adviser he said pension is protected. He said u are allowed to take out and rollover to something else.