Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors. Interest rates have increased rapidly over the course of 2022, and if you receive your Lucent pension as a lump sum this reduces the value. tS Again, this is an extremely important decision and it requires careful consideration. 0000002392 00000 n Tenth Floor Examples of those protections are: The Company may not retroactively reduce those benefits, once they are vested. One of them is offering lump sum buy-outs. A schedule of those sessions is in the Financial and Tax Education Guide booklet provided in the program announcement package. They could do that by purchasing annuities through an insurance company. Below is a list of employers that have announced that they are offering lump-sum pension buyouts to certain groups of employees, former employees, or retirees. Early this year Alcatel-Lucent announced they were investigating offering a voluntary lump sum buy-out of retiree pensions. In fact Alcatel-Lucent was a foreign company and they could not take our pension funds. We strongly advise you to gather as much information as possible and to consult with your own personal financial planner, legal advisor and/or tax advisor. A recent call with a financial advisor in California is representative of a common question related to pension de-risking and lump sums. Bottom Line: Rising rates reduce lump sums. Case of the Week: Do Roth Recharacterizations Still Exist? 553 0 obj <>/Filter/FlateDecode/ID[<94B3386967048548A045BA5BD9299ADC><31856CD454ED2C479B066D538F2F01B1>]/Index[544 26]/Info 543 0 R/Length 70/Prev 342004/Root 545 0 R/Size 570/Type/XRef/W[1 3 1]>>stream Q2) Do I have to take this lump sum buyout offer? If I do decide to take it, what are my investment options to continue to withdraw on a monthly or yearly basis? Alcatel-Lucent announced it was being purchased by Nokia. Health & Safety Fact Sheets ; Legislation & Politics ; News & Events After all, getting a huge influx of cash into your account upon retirement would make anyone jump for joy. A1) Alcatel-Lucent is making available financial and tax education services through Deloitte, an objective, third party organization, at no cost to you. under the Plan to a one-time, lump-sum payment. Alcatel-Lucent informed the CWA National yesterday that they intend to make available to certain former employees, surviving beneficiaries and alternate payees, who are currently receiving monthly pension payments from the Lucent Technologies Inc. Pension Plan (the Plan), a Lucent Retiree Lump Sum Window Program (the Program). The permissions that Alcatel-Lucent (ALU) had to file to amend its Pension Plan to offer the lump sum program started long before the Nokia merger was announced. The CWA actuaries will review them to be sure that how they are being calculated is correct. A decision by telecom company Alcatel-Lucent to move $3 billion out of a well-funded pension fund for retired workers into a fund for managers has union leaders worried about the long-term stability of the retirees' fund. In fact that is why the CWA had to lobby for expanded legislation to continue to provide for collectively bargained medical and death benefits from the Plan. Call 1-888-232-4111 and select "Retirement and Investments", then select "Pension". Payments are expected to be made from existing U.S. plan assets and we do not expect to make any contributions to U.S. plan assets in connection with either offer, Mr. Malfavon said. What about the Pension Protection Act? Even if they are, that does not mean you should take it. I am 64 yrs. Sign up to receive Terrys free newsletter!! Legislation and Politics. We have raised the question with Nokia. What questions should I be asking? To read about CWA Members, Leadership or Industries, visit ourAbout page. The National Association of Plan Advisors is a non-profit professional society. But keep in mind that a lump sum pension payout makes it easier to overspend in retirement. It is a sizable amount of money. Alcatel-Lucent Old Scheme, London, completed a 100 million ($123.7 million) buy-in with Boarding Insurance Core. Alcatel-Lucent also recommends recipients of the offer consult with their personal financial planner and/or taxes advisor before making a decision. It brings the total number of retirees and former employees who have yet to retire who will receive the offer to about 74,000, Marco Malfavon, company spokesman, said in an e-mailed reply to questions. As we get more information, we will publish it on this site. Please review the attached documents for complete information regarding this Program. So, if you are evaluating whether or not to take the lump sum, you should not take the lump just because you are fearful about the Nokia merger. A3) The language on page 10 is standard language. Workers' Rights Button submenu. For us that would be December 2, 2015, because the lump-sum payout from AL-LU is set for November 2, 2015 (and we can't change that date). Any money left over in the fund the company would have to pay a penalty tax on. Plan assets are protected from being used for purposes other than providing benefits (or reasonable administrative expenses). 2015 Columbia Management Investment Advisers, LLC. Thank y. Terry Says: Well, first of all, you have one fact wrong. for subscribing, you are all set for your money saving tips. Alcatel-Lucent also recommends recipients of the offer consult with their personal financial planner and/or tax advisor before making a decision. Retirement Policy Proponent Sen. Ben Cardin Announces His Own Retirement, The Opportunity and Obligation in Small Plan Coverage: Hubs Joe DeNoyior, Expert Excoriated in Excessive Fee Dismissal. 3QxbOJZL3 i`/ 4(yKH.WT=\}LN8V^*~& Q7) What happens to my healthcare if I take this lump sum buy out? Everyones situation is different and unique to them. Privacy PolicyTerms of UseCopyright. In fact, at this years CWA T&T Leadership conference, our Research Department conducted a workshop on trends in Pension de-risking and bargaining. She writes a weekly personal finance column syndicated in major newspapers by Tribune Content Agency. Perhaps your real question is whether the buyout amount if invested in a different immediate annuity (a check a month for life, fixed) is enough to get you a check equivalent to the promised lifetime pension check. The CWA actuaries will review them to be sure that how they are being calculated is correct. endstream endobj 273 0 obj <>stream You have until September to decide and you should use the time to consult with someone who can review your individual situation. For media inquiries, call CWA Communications at 202-434-1168 or emailnews@cwa-union.org. That is not necessarily true. Recipients have the option to do nothing and will continue to receive their current monthly annuity payments. The CWA has requested that ALU give us a complete accounting of how they are arriving at the lump sums (interest rates, mortality tables, etc.) A7) If your healthcare premium is currently being deducted from your monthly pension check and you convert your monthly pension payments to a lump sum payment during the program, you will be billed directly for your healthcare premium and you MUST pay the premium in order to continue to receive your healthcare. So assuming that you are not going to be sued, this is strictly a financial planning question. they have known this for over 30 days and i am not making any headway with getting it corrected. The only caveats with this purchase of an immediate annuityare that if you die in a year or two, the insurance company keeps the remaining balance in the annuity account, and the check is a fixed amount that will not go as far if we have an inflation problem. The Program Window is only in effect beginning July 20, 2015 and ends at 11:59 p.m. (EDT) on September 25, 2015. Information about your Pension Plan benefit is also accessible, and pension transactions can be initiated, online through the Your Benefits Resources (YBR) website at http://resources.hewitt.com/nokia, 24 hours a day, seven %%EOF There are many politicians in the pockets of corporate America who want to weaken pension rules, attack Social Security and Medicare and strip Unions of their ability to bargain. you the lump-sum payment. One option is to take the lump sum and park it in a money-market fund currently paying more than 4% until better investment opportunities come along. web design and development by new target, inc. 130 E. Randolph St. Traditionally, when interest rates rise by 1% the amount in an Lucent employee's lump-sum will drop by 8 - 12%. The company said in its fourth-quarter 2014 earnings release that the offer, to take place in the fourth quarter of 2015, will run concurrently with a previously announced offer for retirees in its U.S. Management Pension Plan. The permissions that Alcatel-Lucent (ALU) had to file to amend its Pension Plan to offer the lump sum program started long before the Nokia merger was announced. 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Copyright 2023by NAPA, Compliance Administrator (TPA) Evaluation. endstream endobj 545 0 obj <>/Metadata 74 0 R/Pages 542 0 R/StructTreeRoot 124 0 R/Type/Catalog/ViewerPreferences 554 0 R>> endobj 546 0 obj <>/MediaBox[0 0 612 792]/Parent 542 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]/XObject<>>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 547 0 obj <>stream In mid-July, eligible retirees will be sent a Your Benefit Decision Kit, which will show the amount of the individuals lump sum payment and any new annuity options (if applicable) that are available to them under the Program. Advisor action items: Talk the your Alcatel-Lucent clients who may be affected. Alcatel-Lucent has contracted with Deloitte to provide Financial and Tax Education Individual Sessions through a number of live group sessions across the U.S. and a series of webcasts, as well as the opportunity for individual sessions via phone appointments. Social Security Solvency: Is it Really That Bad? So, if you are evaluating whether or not to take the lump sum, you should not take the lump just because you are fearful about the Nokia merger.
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