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. 685 Third Avenue Despite a July 9 announcement that the IRS intends to eliminate lump-sum windows for retirees already receiving annuity payments, the Alcatel-Lucent lump-sum window is allowed to proceed under a special prenotice grandfather clause for programs announced prior to July 9. Sign up and get the best of News delivered straight to your email inbox, free of charge. 569 0 obj <>stream To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market. Copyright 2023by NAPA, Compliance Administrator (TPA) Evaluation. Alcatel-Lucent to expand lump-sum offer to 32,000 more participants Alcatel-Lucent completes buy-in for U.K. pension fund, eyes full buyout Alcatel-Lucent enters into second buy-in for U.K . 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. hkkG@$fg.e5$-ZRY+u}3+)Jb5j?Bs33g0.lDEPO"$LRBQB{L2BgB@GyNyU/^mDJ$.nyw'(FyY_1JNb+vFcq+3r,k5>k9]TF5Fr ov+%]lnJyZCm;[yw9{Zy zv# A schedule of those sessions is in the Financial and Tax Education Guide booklet provided in the program announcement package. endstream endobj startxref Currently IL does not charge on pension income? Thank y. Terry Says: Well, first of all, you have one fact wrong. 3QxbOJZL3 i`/ 4(yKH.WT=\}LN8V^*~& trailer Health & Safety Fact Sheets ; Legislation & Politics ; News & Events 297 0 obj <>stream Last week retirees received the first official notice of the lump sum offering. Synopsis of Material Modifications Alcatel-Lucent Retirement . hmk0"tzc7hh:(}&5se(|EV i"0W-kb@@.P|,rQfd\e.9thw)SV"\N2,]Ew9gmP?e? Illinois DOES NOT currently tax IRA withdrawals. In Column D, at your life. 268 0 obj <> endobj IF the company decided to terminate the plan they would have to do it under government guidelines. "9:@$;dIs0&w@qY }*#l8l 0 CWA is not in the position to interpret the companys offer and does not give out financial advice. The lump sum amount, if not invested, will hold me for 13 yrs. Plan assets are protected from being used for purposes other than providing benefits (or reasonable administrative expenses). 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. Following are the questions, with the answers, that we have received to date. one-time, opportunity to convert their current monthly pension payment to a lump-sum payment (or, for some individuals, to change their pension payment option). It is a sizable amount of money. 0000022178 00000 n Their answer is that there are no plans for a cost-of-living raise. received a package in the mail and realized my pension was based on leaving the company oct, 1982. i left the company on 7/15/85. I have many questions. 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). About Change submenu. The materials contained herein are intended for instruction only and are not a substitute for professional advice. HWmkF}J\l|MiJ(R~H'g. Q2) Do I have to take this lump sum buyout offer? Therefore, the company cannot just take money from the pension plan and use it for other things. Alcatel-Lucent, Murray Hill, N.J., announced Friday it plans to extend an offer of an immediate lump-sum payment to about 32,000 retirees and former employees in its U.S. Inactive Occupational Pension Plan. 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 If you choose to do nothing, your current monthly pension payments will continue. Pension Plans offer lump sums periodically, but typically change once a year. 0000009608 00000 n What asset class is best for corporate plans' growth investments when using LDI? xoH-Ge/+Uj%_lQ8B\R,Nk;Od.''M[fy%'mNd/i(-*i_EvS4H.fx3Vpe Alcatel-Lucent announced it was being purchased by Nokia. In fact these two announcements are not connected. under the Plan to a one-time, lump-sum payment. Quantifying sustainability the numbers, the data, and the people, Valuing Banks: Hidden Losses Versus Assets, Research for Institutional Money Management, Global Fixed Income: Volatility and Uncertainty Here to Stay, For institutional investors, ETFs can make meeting liquidity needs easier, Gold: the most effective commodity investment, 2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios, Ten ways retirement plan professionals add value to plan sponsors. These mailings detail a one-time opportunity to convert their remaining annuity payments under the Alcatel-Lucent Retirement Income Plan or Lucent Technologies Inc. Pension Plan to a lump-sum payment. they have known this for over 30 days and i am not making any headway with getting it corrected. For media inquiries, call CWA Communications at 202-434-1168 or emailnews@cwa-union.org. I am 64 yrs. 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.) Recipients have the option to do nothing and will continue to receive their current monthly annuity payments. Just go to www.immediateannuities.com, and insert your age, gender, state, and the lump sum amount you have to invest. 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 lump-sum window runs from July 20 through September 25 and is completely voluntary. 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. 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. This means that there are specific guidelines that must be followed under federal law. Alcatel-Lucent, Murray Hill, N.J., announced Friday it plans to extend an offer of an immediate lump-sum payment to about 32,000 retirees and former employees in its U.S. Inactive. So assuming that you are not going to be sued, this is strictly a financial planning question. This will limit your search to that combination of words. This is an extremely important decision and it requires careful consideration. Even if they are, that does not mean you should take it. Traditionally, when interest rates rise by 1% the amount in an Lucent employee's lump-sum will drop by 8 - 12%. To: Formerly Represented Retirees of Alcatel-Lucent, Subject: Questions Regarding the Alcatel-Lucent Pension Lump Sum Buyout. You will receive your first bill in mid-November for your December coverage. As we get more information, we will publish it on this site. Everyones situation is different and unique to them. 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. In a lump sum buy-out the company is paying the present value of the pension amount so that it takes the liability off their books, which means they no longer have to pay PBGC premiums or manage the money themselves. Recipients have the option to do nothing and will continue to receive their current monthly annuity payments. The CWA actuaries will review them to be sure that how they are being calculated is correct. Former employee, ATT/Lucent/Alcatel-Lucent is offering a lump sum buyout of our pensions. As of Dec. 31, 2013, the U.S. pension funds had $30.1 billion in assets and $26.2 billion in projected benefit obligations, for a funding ratio of 115%, according to the companys most recent 20-F filing. There are many things you need to take into account, many of which are described in the packet (taxes, your health, your age, your dependents, etc.) It is in the companys self-interest to keep the pension plan healthy because if it is not, they cannot pay for retiree medical from the plan and they have a contract saying they will pay retiree medical through the end of 2019. In fact these two announcements are not connected. A lump sum payout is the more exciting option of the two. 2023 Communications Workers of America, AFL-CIO, CLC All Rights Reserved | Site Map | Privacy Policy, To: Alcatel- Lucent Formerly Represented Retirees, Surviving Beneficiaries and Alternate Payees, RE: Lump Sum Buy Out Of Monthly Pension Payments, Alcatel-Lucent Lump Sum Buy Out Of Monthly Pension Payments. Q3) Page 10 of the Alcatel-Lucent Retiree Lump Sum Window booklet says the company has rights to terminate either plan, etc. We have raised the question with Nokia. More on Alcatel-Lucent retiree and pension issues and the acquisition by Nokia. Biggest Lucent Pension Drop in a Generation. Beware of companies that extend the start of their payout beyond this normal 1 month, because this can have a big impact on your income from the annuity. Some former employees might also have the opportunity to change their current annuity option to a different annuity form. sure enough, the lack of stability does bring a certain focus - which, to your point, can be Great article. 17 24 To read about CWA Members, Leadership or Industries, visit ourAbout page. hb```2ff5Ad`C PI&,~Lj b69=d291 0{D4)LTYs7-nJU:en\k'Wl2/WTN.\xaAAHy40QXah`h hhh s@`H1HQAi7*+':]0AC [8]XiV# M,y The National Association of Plan Advisors is a non-profit professional society. 0 For a standard termination the company would have to show the PBGC that the plan has enough money to pay all the benefits owed to participants. All of this is costly to the company. This offer, called the Alcatel-Lucent Retiree Lump-Sum Window Program, formally began on July 20, 2015 and ended on September 25, 2015. %PDF-1.5 % 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). A5) The new ruling by the IRS addresses discontinuing offering a lump sum buy out in certain circumstances going forward. endstream endobj 18 0 obj <> endobj 19 0 obj <>/ProcSet[/PDF/Text]/ExtGState<>>>/Type/Page>> endobj 20 0 obj <> endobj 21 0 obj <> endobj 22 0 obj <> endobj 23 0 obj <> endobj 24 0 obj <>stream 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. On the one hand, you could roll the lump sum into an IRA, with no tax consequences, and then manage the investments and a withdrawal plan (with a certain Minimum Required Distribution) every year. %PDF-1.4 % 0000014929 00000 n at the current rate of yearly allocations given by the employer. Therefore, the company cannot just take money from the pension plan and use it for other things. Advisor action items: Talk the your Alcatel-Lucent clients who may be affected. BUT, if you want some certainty about income, then you might take a portion of the money and buy one of those immediate annuities inside your IRA. 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 hbbd```b``z "kd(d? Used with permission. Hello Terry, It is a sizable amount of money. endstream endobj 548 0 obj <>stream How to Avoid Taxes on Lump Sum Pension Payout - SmartAsset You can avoid taxes on a lump sum by rolling it over into an individual retirement account (IRA) or another eligible retirement plan.
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