Thoughts on pension fund stability after the McElfresh town hall? Freudian slip about turning around the Titanic? I wanted to work until year end but thinking I should leave now. Thoughts? I’m retirement eligible but scared.
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You have a good point @22rpj for some and everyone needs to consider their own situation and pension plan. For me I left T a year and half and have a cash pension managed by Fidelity that I verified is earning less than 1%. There is no kicker or additional funding from T. For me it is better to move it to a higher yielding and safe IRA investment that earns a return of 12x.
"The man who does not read has no advantage over the man who cannot read." Mark Twain
@22tqs, be advised that if you go back, read and check yearly, from 2011 to present, your Pension has gotten a 4% kick every single year, on the nose, no more but no less! Their latest funding percentage is at 91%, pretty healthy for any company.
How anyone takes their Pensions is their business, lump sum or Annuity, but above all please know the facts....call Fidelity, they handle your Pension, ask questions because they have answers! While doing that, sit down with a CFP and ask even better questions about funding your future in retirement so you’re not il informed.
Let's say the duration of the $T pension annuity payout is 20 years
The calculated lump sum would need to return 4% to provide that kind of juice, with a zero balance remainder
Just sayin'
Standard disclaimers apply
The pension is earning less than 1% annually. The S&P 500 index fund has averaged 12% over the last few years. I have cashed out my pension and recommend the same for everyone before T files for bankruptcy in the near future.
I fear the same. Fear...
Take the money and run. All of it . Look at what United Airlines did with their employees pensions.
About how long does it take to get your money? I applied in Jan and am still waiting...wondering what the issue is - no notices from Fidelity at all.
I am doing partial lump sum and partial annuity. 650 k in 401k and 250k in partial lump sum ...Thanks to ATT I am in great shape to move to the unemployment phase of my life and then retirement.
If you are scared, don’t volunteer. Wait and see if you get surplused but in the meantime continue with your plan B-life outside AT&T. Oh and be careful who you discuss your concerns with internally. Next thing you know your names goes to the ones making decisions. Good luck!
I made this post below: @XD4jvBY-1lqr
I have a Financial Adviser and the good thing about them is that you can put your money in 'Non-Publicly traded stocks or funds". With the Publicly traded stocks and funds they go up and down since people buy and sell on emotions. The non publicly traded are generally more stable since you have to go through your Financial Adviser to buy or sell. I also go with about 80% income (dividend) and 20% growth. It seems to be working good even with the big fall at the end of 2018. Hope this isn't off topic though.
Agree, take the lump sum and get some good financial investment (pay by the hour) advice.
I am retirement eligible and plan to leave at year end. My plan is to take the lump and invest it in fixed income such as preferred stock if stable companies. You don't get much movement in stock price on preferred like you do common stock but you can get a fixed income of 6 to 8%. You can diversify across industries as well. If long term rates should rise in the future that would open an option of long term bonds and CD but at today's rate that us t a good option
I took the lump sum last Sept. I have more confidence with myself than AT&T. We will also be able to leave the money to our daughter. You only need to average about 5% to equal the annuity. I just don't have faith in AT&T or the pension. Who knows what the right answer is though.
I took the offer in March, 2015 and was faced with the same decision. I checked with Fidelity, Vanguard, and other. If you take the lump sum, you have much more flexibility than keeping it in T's plan. Plus you can diversify and not have to worry about the debt of the company. As for the stock market, it historically goes up. Unless you need 100% of your assets now, you will develop a safe proportion between stocks, bonds, international holdings, and emergency money - Fidelity can help. Then you'll reduce risk. It's all about reducing the risk of losing what you've got.
Your pension is backed by AT&T preferred stock. The cash that comes from your pension is the same cash that is encumbered by $180B in debt. Should you be concerned short term? No really. Long term? Yes, very concerned.
Why would one leave it to T to maintain one's future income?
Take the lump, invest it, and cut ties.
Ask the teamsters how their annuity pension went.
I have the same concerns about the long term relianility of the pension fund.
You should take a look at the PBGC website to see how much of your pension would be guaranteed in the event of a pension fund failure. For me it just about covers what I would receive as an annuity payment. You should, however, remember that the PBGC is a self funding quasi-governmental agency (like Fannie Mae and Freddie Mac), so there is no guarantee the USG would backstop it were it to run out of money Yes, they did bail out Fannie Mae and Freddie Mac in the crash of '08, but that was to save the bankers. You know you don't matter anyhere near as much to the politicians as the bankers, so who knows?
I've already done my calc comparing before and after the interest rate chane on 4/1 and it tells me that I'd lose about 90k to let it go by. However, if I continue to work until 1/1/20, my lump sum at that time would only be about 40k less that if I were to go now before the rate reset. Add to that I'd have another year's pay, 401k company match, etc, so I wouldn't lose anything.
Interest rates are low and the stock market is in a bubble, so there is no way to earn a safe return on a lump sum (which is exactly why ATT is willing to cut you a check and get the problem off their back). That being the case I've decided to stick it out for the rest of the year to see what the world looks like at that time.
Stability, Suitability and AT&T don't go together, is like oil and water, if you can retire, enjoy the journey my friend!@
You need to go into fidelity which was updated today and run your pension calculations for 3/31 and 4/1. There is a big difference on the lump sum with the interest rate change effective on 4/1. If you leave taking the lump sum you need to retire on or before 3/31 and commence your pension on or before 4/1.