Thread regarding AT&T layoffs

Post ID: @qhf
For example, the interest rate incentive that Jeff mentioned in his email

Can summarize what was in this email? what interest rate incentive?

If you are surplussed so long as your pension is vested, you can move every dime to an IRA regardless of age. I don’t where folks get you need to hit the rule of 75 to get it. It’s yours once it is vested. If you started after 1997 the only thing rule of 75 gets you is your employee discounts. I’m not offering financial advice but here are plenty of funds that will more than double the performance of the legacy T pension. I took the lump sum and moved every dime. Word is T is going to freeze it anyway and the current interest rate environment drives the lump sum up exponentially.

I had fidelity roll over most of my 401K fund to both a traditional IRA and a ROTH IRA. I could not roll it all over to a ROTH IRA without paying some taxes.

Spouse was laid off from AT&T—less than a year from 20-anniversary with the company. Pension was decreased by 75%. Has this happened to anyone else? Can anything be done or proven to show that this is a pattern?

I know people here are talking about either taking the annuity or the lump Doetook the lump sum for a couple of reasons. My wife and I want to leave as much as possible to our daughter when it is our time and I have questions about all the dept AT&T has. We are very responsible with the money and I work part-time and leave off monthly dividends, but I only take maybe 3/4 of the total amount at most. My wife also works so we do good. It is a hard decision on what to do and when you decide it is the way it will be.

But if you are good with your money and don't make aggressive investments the lump sum and 401k should do you very good. I'm not sure what younger people, say 50's and younger who don't qualify for a pension yet will do, but for us older ones we should be fine. But if you take the annuity it all ends with your death and your spouses death. We just hope there will be a good amount left when we go for our daughter. Just my opinion though. I never say one way or another is right but just think what we did was right for us. Best of luck to all.

@2nvh, got some homework for you, and many who wonder if a pension will be there to pay out down the road.

https://www.pbgc.gov....Pension Benefit Guaranty Corporation, this web will fill in a lot of empty spaces to question you have. Established in 1974, there are currently 4,919 companies that are being (or have been) covered, I’m sure there’s a phone number but I really didn’t look. To be clear....this is a Government run agency....kinda like an insurance policy for people whose pensions went bust, or may, at some point.

I’m closer to retirement and will take the Annuity, it fits our lifestyle to eventually have two SS checks and a monthly annuity deposited each month. Interest rates DO NOT affect the monthly annuity payments in any way, shape or form.....it DOES however, affect the Lump Sum.

If you have a CFP, have a sit down with him/her, it’s never too early and guaranteed to help you focus on your priorities.

Good luck

Thank you for those posting good sound advice on this subject. It's a touchy issue and one I'm sure many of us would rather not be thinking about.

I'm still 11 years away from retiring. Been with the company some time now and if I get surplussed, I'm not sure yet of what option to chose, lump sum or wait it out for the annuity.

What concerns me is the path the company is on now seems to be a very unstable one with a poor track of decision making. In 10-15 years from now, will there even be a pension to pay out?

@1irz, "like the man said, slow and easy" so take a breath.

Now curiosity begs the question, when you dealt with your Fidelity agent and he said ‘’oh no, this is not good, you need to move it." Was he concerned you were carelessly "over" invested in T stock and should not have been? If that’s the case, that decision falls on you. Surely, T stock wasn’t your only investment in your K account! Was it?

In fairness, when the market goes down, like it has, it’s like a domino effect and very few safe havens exist. But ultimately, how you invest your hard earned bucks falls with you....AT&T has no knowledge how you invest, Fidelity keeps the books for us like it has for many Corporates.

I’ve ploughed through a lot of up and downturns, I’m a longtime, diversified investor and don’t panic to an occasional bad choice, over time it gonna happen....hope your ok and good luck....try meditating.

@1acc, some sound advice. T, like hundreds of Fortune 500 companies, hire investment firms to manage our Pensions & 401K’s as a service to their employees....we have Fidelity. Blame T for a rough ride? Sorry mates, can’t say that’s exactly fair play....Fidelity is only the caretaker of our investments, not the route cause....that would be us and the choices we made!

Like the man said, slow and easy, don’t be in a rush to make mistakes.

@1irz, is obviously very irate on a number of levels and that begs caution by those who may be influenced by recent layoffs, or those soon to be....perhaps myself as well, know who your angry at and why. Getting upset with T because of 401K performance is absolutely unrelated to T, it’s about the investment choices WE made, T didn’t make us buy a stock, mutual fund, Stable fund etc....we did in our attempt to diversify. When things went well, we were geniuses and when they didn’t ....it’s someone else’s fault.

Fidelity Investments works independently from, yet for, AT&T, they are an investment firm with multiple methods to invest into your K, but they don’t give recommendations because it would be a workplace conflict of interest. Short time investors, looking at the recent financials, are always feeling the pain. Long term, disciplined investors are not. We all make our own choices in brokerage, T stock, funds etc. and when our 401K’s soared from ‘09-‘17 i doubt most of us had complaints to speak of. For those that are new to investing and have never gone through Recessions....they are ugly, nerve racking but ultimately pass. And BTW, though this may feel like a Bear Market, it’s not, just a hiccup.

As for the Pension, a totally different story. A married couple, with no children, could consider staying in because a spouse survivorship exists, though it extends no further. If you go with a Pension Monthly Annuity, interest rates play absolutely NO part with how much your monthly distribution will be, now or ever! But check with HR to be sure.

Singles know they can’t leave their Pension to a parent, brother or sister and their decisions are based differently.

The idea of having 3 sources of income flowing in, un hampered (Pension and two Social Security checks) is a comfortable feeling and we can turn our attention to other pressing matters and not trying to beat the Market with a Lump Sum. Each according to their own circumstance.

Good luck Grasshoppers, think calmly and not out of fear, anger or haste.

Take YOUR MONEY when you leave! All of it- 401k & Lump Sum Pension. How could you even consider allowing the company that no longer has a place for you, to continue to play MONOPOLY with YOUR MONEY. It took me 3 months to get my Sh-- together and decide the best place to put it. In that time, with the STOCK TANKING, my 401K dropped like a rock. Since you are no longer contributing money to your 401K-the LOSS is in your face. Kicking myself, but now MY MONEY is under MY CONTROL and Mr Moneybags can play with his own money.

You will read many Different articles regarding if your employer will allow you to keep your 401K, then it’s better because rates are lower. But no one tells you what to do if that company is AT&T. And under the circumstances- NO! AT&T CANNOT HAVE MY MONEY ANYMORE.

When I called Fidelity to start the withdrawals, the agent looked at my accounts and said I quote “Oh no, this is not good, you need to move it”. And he was very impressed with the Brokerage company I picked. The online companies are more competitive with rates & you can change your investments YOUR OWN SELF BECAUSE IT IS YOUR MONEY. But PLEASE do not let the people who put you out, have access to invest Your Money. They took your livelihood & they certainly have that right- BUT THATS ALL THEY GET.

Don’t confuse your Pension benefit with your 401K balance. Two separate issues.

For additional thoughts on this matter review the following:

https://www.thebalance.com/when-to-start-your-pension-2388767

https://www.thebalance.com/how-to-compare-pension-options-lump-sum-or-annuity-2388838

If you are 55 or older at the time you leave the company, whether let go through force reductions or quit, you can take your money from your 401k without penalty.

One thing to think about is will AT&T be able to pay your pension? Given the amount of future debt service payments, dividends, and operations on cash flow do you believe the cash will be there to pay your pension? What is the pension backed by, AT&T preferred stock? Do you think things are going to be better or worse for the company in the future? If you take the lump sum and roll it into an IRA you are free and clear and don't have to worry about it.

The annuity (monthly payments) does not change with interest rates. The lump sum that the company must fund to pay for the annuity DOES go down as interest rates increase. They dont need to invest as much money to make the monthly payments if the lum sum is generating more interest. Your advisor should have explained that your lump sum amount would decrease, but your monthly annuity would he unaffected.

I'm 59 and left the company last fall. I left my 401k alone but took a partial lump sum and annuity for my pension. There was no penalty on that and my financial advisor ran the numbers. Waiting to collect risked the annuity going down because of the interest rates. The tax penalty is when you withdraw from the 401k.

Surplused here last year at 59.5 years old. Left pension in thinking it would accrue. However, pension is calculated on current interest rates. Per Fidelity, if interest rates go up, pension worth goes down and vice versa. So, I used my separation pay until this year when I planned to start my pension Bad news. Pension calculcation last year during Jan-Mar timeframe and pension calculation now shows pension worth 15,000 less. So, options: cash out pension; rollover entire pension into IRA; cash out what I need, and pay federal tax and no penalty (59.5 years old) and roll remaining over to IRA (no federal tax hit). So, you have several options Good luck.

Congress passed a tax law that says if you were involuntarily separated from your employer and are between 55-59, you can take a disbursement from your 401K without Federal Tax penalty (10%). You will still have regular taxes @ 25% deducted.

You really need to get with your Fidelity Advisor (free to AT&T active and in-active employees) to map out the best strategy based on your in/out streams of money and economic scenarios.

@zkr Good for you then. I certainly meant no ill will. I think you'd agree that generally speaking cashing out a 401K or pension before eligible from an age standpoint is unwise. That said, of course, some folks may be in a different circumstance, If it worked for you then God Bless.

@pcs: I’m not ashamed. I’d rather have the money now. Time value of money and all that goodness. I invested 75% in crypto and bought gold with the other 25%. We’ll see who comes out ahead in the long run.

"Under age 65. I was able to cash out pension and 401k. Took 30% hit for taxes and early withdrawal".

Don't be a dummy. Don't do this.

You need to call Fidelity and READ you Pension plans Summary and understand which pension plan you fall under.

The AT&T Mobility plan gives the option of LUMP Sum or Annuity (monthly check). Assuming you’re vested in the plan you have until you are of age 65 to choose. At age 65, the company will commence an annuity automatically and start your monthly checks, provided you did not take the Lump sum. Legacy-T, Legacy-S (Land Line, Telco) have alternative plans. I believe the Modified Rule of 75 applies to Retiree benefits (Health, rate concessions, etc.).

So if you are Vested in your Pension plan, the pension benefit should be yours at any time.

Not all employees have a pension, as the company stopped offering pensions to new employees a few years back and must rely on their 401K for their retirement financial needs.

Choose you options wisely, and good luck.

You can call Fidelity and ask them if you are vested. You can also login to Fidelity and see that you are or are not vested. If you are vested, you can roll your account taking lump sum, or you can keep your account and not pull funds until 59.5 (early) or later. You can also roll your 401K out of fidelity but it's not necessary since it's "safe" with Fidelity. You can dump the limited funds you had access to (unless you opened the brokerage account and accessed the full market) and buy common mutual funds or your favorite stocks. You could roll both to a self directed IRA (https://www.questtrustcompany.com/) and buy almost whatever you fancy. The poorest decision is typically to take the funds out of their tax protected status and take a tax hit. Stop reading the BS on this forum and look up your own status or call F. Best wishes on your future post AT&T.

My understanding is that you can cash out with tax penalties, or roll the entire amount into an IRA without penalty.

I was surplused with 10 years service. Under age 65. I was able to cash out pension and 401k. Took 30% hit for taxes and early withdrawal.

There are so many pension plans, and the rules for them are not the same. Call Fidelity for (hopefully) the correct answer.

For example, the interest rate incentive that Jeff mentioned in his email, I heard that does not apply to those that have the Bellsouth pension plan because of some language in their plan. I don’t know the details but I heard it from more than one person that has that plan and it was confirmed by at least one financial planner.

Read this - https://www.bankrate.com/retirement/what-to-consider-before-taking-the-lump-sum/

Your qualified balance in netbenefits is how much you have in pension.

I flipped mine into a 401k far away from at$t, sold all my stock and bought into better companies and certainly sleep better for it

Pension, below 30 years or don’t make the Modified rule of 75, you wait until you’re 65. 401k can cash out or roll over to new job. Cash out without rollover incurs a tax liability most likely. AFAIK.

I thought any time termination happens u can cash it out. But i am unsure if u get the full amount listed on fidelity. Anyone chime in?