That is not necessarily true. In fact these two announcements are not connected. 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. Two announcements have been made this year by Alcatel-Lucent and many of you might think they are connected. The purpose of the Program is to offer eligible former employees the ability to convert their current monthly pension payments into a one-time lump sum payment. 0000007666 00000 n 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). 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. 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. In addition, Nokia will most probably create a Nokia (USA) subsidiary which would be completely subject to US laws. Early this year Alcatel-Lucent announced they were investigating offering a voluntary lump sum buy-out of retiree pensions. 0000012893 00000 n 0000001121 00000 n Advisor action items: Talk the your Alcatel-Lucent clients who may be affected. I am 64 yrs. 0000000016 00000 n Tenth Floor The premium amount will still be based on what your current monthly pension amount is today. Examples of those protections are: The Company may not retroactively reduce those benefits, once they are vested. 569 0 obj <>stream For media inquiries, call CWA Communications at 202-434-1168 or emailnews@cwa-union.org. endstream endobj 272 0 obj <>stream Privacy PolicyTerms of UseCopyright. To: Formerly Represented Retirees of Alcatel-Lucent, Subject: Questions Regarding the Alcatel-Lucent Pension Lump Sum Buyout. It is a sizable amount of money. Bottom Line: Rising rates reduce lump sums. for subscribing, you are all set for your money saving tips. Any money left over in the fund the company would have to pay a penalty tax on. One more point, just because our pension are protected now, we should not assume it will always be this way. web design and development by new target, inc. One of them is offering lump sum buy-outs. About 55,000 You DO NOT have to accept this offer. IF the company decided to terminate the plan they would have to do it under government guidelines. You can make some investments that are likely to generate growth and income to support your retirement needs. You may also contact the Nokia Benefits Resource Center. Alcatel-Lucent, Murray Hillary, N.J., plans on make a unpaid lump-sum offer in 2015 until about 45,000 U.S. retirees and former employees vested in its U.S. defined benefit pension funds, according to a 6-K filing with the U.S. Securities and Exchange Order. 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. In fact Alcatel-Lucent was a foreign company and they could not take our pension funds. But even if you follow the recommended plan,there will be no guarantees that the payouts will last your lifetime as would be the case with a pension. 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. 2023 Communications Workers of America, AFL-CIO, CLC All Rights Reserved | Site Map | Privacy Policy. 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 . 268 0 obj <> endobj The Columbus Dispatch Tuesday February 16, 2016 5:00 AM. 297 0 obj <>stream The lump-sum window runs from July 20 through September 25 and is completely voluntary. Alcatel-Lucent announced it was being purchased by Nokia. 0000015024 00000 n For specifics, click on the employer's name to see the company's press release, SEC filing, or news story announcing the change (some links may expire). The CWA actuaries will review them to be sure that how they are being calculated is correct. (And, you will understand why the company wants to end the pension promise because it was too generous.). In fact these two announcements are not connected. 0000014974 00000 n r?Yw-g{A8se? Jx^m!xDC8p:PI((`![G EkrQXADX In terms of the Nokia merger -- There is a fear since Nokia is a foreign company our pensions would no longer be protected. Our legal department and our research department both came to the same conclusion: U.S. law that currently protects the pension benefits of our members will still apply if Nokia purchases Alcatel Lucent. The Program Window is only in effect beginning July 20, 2015 and ends at 11:59 p.m. (EDT) on September 25, 2015. Employers that reduce the risk of their pension plans could face a new requirement: disclosing basic information about the transactions to the Pension Benefit Guaranty Corp. as part of paying their annual premium to the federal agency. The ERISA consultants at the Learning Center Resource Desk, which is available through Columbia Threadneedle Investments, regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. To search specifically for more than one word, put the search term in quotation marks. Our legal department and our research department both came to the same conclusion: U.S. law that currently protects the pension benefits of our members will still apply if Nokia purchases Alcatel Lucent. 685 Third Avenue CWA is not in the position to interpret the companys offer and does not give out financial advice. (What you might be thinking is that an IRA is less secure from creditors than a pension payout, and that would be correct.) 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. One more point, just because our pension are protected now, we should not assume it will always be this way. Illinois DOES NOT currently tax IRA withdrawals. 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. Eligible former employees are NOT required to make any changes to how or when they receive their Plan benefits. endstream endobj startxref 0000017395 00000 n 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). Menu burger Close thin Facebook Twitter Google plus Linked in Reddit Email arrow-right-sm arrow-right Loading Home Buying Calculators The lump-sum window runs from July 20 through September 25 and is completely voluntary. That is not necessarily true. A4) What page 15 of the Financial and Tax book is referring to is that if Alcatel-Lucent declares bankruptcy and does not have enough money to cover the liabilities of the plan the PBGC would take over the plan. 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. 0000008051 00000 n You have until September to decide and you should use the time to consult with someone who can review your individual situation. Alcatel-Lucent plans to make a voluntary lump-sum offer in 2015 to about 45,000 U.S. retirees and former employees vested in its U.S. defined benefit pension funds, according to a 6-K filing with . J m^?bSL&MM>^S!OYuFG]2_w*'~vmi"chV6{8E&`(72jje&}\MlKM+TLigQC42BIj4^C};)k"C+"?j^SDE5[k]83/pivCNSa+| $ endstream endobj 273 0 obj <>stream 17 24 Thank y. Terry Says: Well, first of all, you have one fact wrong. In fact these two announcements are not connected. If you choose to do nothing, your current monthly pension payments will continue. 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. Recipients have the option to do nothing and will continue to receive their current monthly annuity payments. Suite 3200 Alcatel-Lucent Retiree Lump Sum Window Benefits Center at (866) 617-7164. Examples of those protections are: The Company may not retroactively reduce those benefits, once they are vested. If you dont have a choice, but must take the lump sum offered, then I suggest rolling it to an IRA as described above. To read about CWA Members, Leadership or Industries, visit ourAbout page. [|c-Ur7fg Jlh>{.OQQ ,FuZr"\>`k_,&^[\z^ :;@. @V6l "{1 Questions Regarding the Alcatel-Lucent Rent Lump Sum Purchase Alcatel-Lucent Pension Lump Sum Buyout | Communications Workers of America | Nokia to merge its 401(k) plan into Alcatel-Lucent's offering under the Plan to a one-time, lump-sum payment. Chicago, IL 60601, R.I. treasurer seeks transparency laws for church plans, Public pension funds adopt cost-sharing mechanisms to stem volatility, Avery Dennison to terminate U.S. pension plan, Sponsored Content: The Plan Sponsors Guide to Retirement Income, The Institutional Investors Guide to ESG Investing, The Plan Sponsor's Guide to Retirement Income, 2023 Defined Contribution East Conference, Alcatel-Lucent plans voluntary lump-sum offer in 2015, Celanese reveals $143 million in lump-sum payments, Lockheed Martin removes $529 million in PBO through lump-sum payments, Hospira pays $22 million in lump sums to former employees, GAO report calls for more disclosure to participants in lump-sum offers, Alcatel-Lucent completes buy-in for U.K. pension fund, eyes full buyout, Nokia to merge its 401(k) plan into Alcatel-Lucent's offering, Alcatel-Lucent enters into second buy-in for U.K. pension plan. THIS PROGRAM IS STRICTLY VOLUNTARY! 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). It doesnt prevent a company from declaring bankruptcy. 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. 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. 0000001515 00000 n You have until September to decide and you should use the time to consult with someone who can review your individual situation. 0000002597 00000 n %%EOF 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.) 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. If you are eligible for a lump sum, you may be able to get a significantly . i receive a pension from alcatel-lucent. The lump sum amount, if not invested, will hold me for 13 yrs. Therefore, the company cannot just take money from the pension plan and use it for other things. 0000015986 00000 n If the lump sum is not anywhere near enough to generate the same monthly income as your pension, then if given the choice you will want to stick with the pension promise. XWyTfnzp@EA0DEqD" 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. 40 0 obj <>stream A schedule of those sessions is in the Financial and Tax Education Guide booklet provided in the program announcement package. 0000002392 00000 n For Alcatel-Lucent's U.S. pension plans, the funding policy is to contribute amounts to the . If I do decide to take it, what are my investment options to continue to withdraw on a monthly or yearly basis? 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. Early this year Alcatel-Lucent announced they were investigating offering a voluntary lump sum buy-out of retiree pensions. Q2) Do I have to take this lump sum buyout offer? As we get more information, we will publish it on this site. Plan assets are protected from being used for purposes other than providing benefits (or reasonable administrative expenses). I have to decide by Sept. 11, 2015. View all Financial Planning / Retirement questions. Q3) Page 10 of the Alcatel-Lucent Retiree Lump Sum Window booklet says the company has rights to terminate either plan, etc. 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. 544 0 obj <> endobj hbbd```b``z "kd(d? Get Email Updates; Receive Text Alerts; Detect Your Local; Search; Services Laborer of Worldwide . Pension Plans offer lump sums periodically, but typically change once a year. Even if they are, that does not mean you should take it. The Pension Protection Act helps to ensure the plan is appropriately funded. More on Alcatel-Lucent retiree and pension issues and the acquisition by Nokia. Following are the questions, with the answers, that we have received to date. Jobs, Health Care & Retirement Security . Holy cow, Nevin, you wrote a white paper! A6) The new annuity is a recalculation, for certain individuals, of the old calculations and is still administered by the pension plan. Or you could wait a few years to buy an. To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market. Q4) Also on page 15 in the Financial & Tax booklet, provided by the company, it says if they go broke we get nothing in a pension. Workers' Rights Button submenu. Alcatel-Lucent also recommends recipients of the offer consult with their personal financial planner and/or taxes advisor before making a decision. After all, getting a huge influx of cash into your account upon retirement would make anyone jump for joy. To read about CWA Members, Leadership or Industries, visit ourAbout page. A5) The new ruling by the IRS addresses discontinuing offering a lump sum buy out in certain circumstances going forward. About Change submenu. 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. xref 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. L Ne`8H3*00\?0 Z* 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.) In Column D, at your life. \?Q8za"mb CMz>GWcgeXSoGcg z!#}'`yOx"(:otxJ+;`Oc56d jnSf;Tm;H8b`i@5@(^hq;X8@d]EXr|w^>|K3Y6g9skZy&jteg}aBM\ju.Ks8XpOTi#Dl8gCx. 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. 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. they have known this for over 30 days and i am not making any headway with getting it corrected. A3) The language on page 10 is standard language. *4w| sX8#.i_96"he@;(e[*'m'-Ksbzgh k@0n`76Cdi} fK0/h. {j 0 New York, NY 10017-4036, Chicago Office These resources include group sessions, individual sessions and a Financial and Tax Education Tool. Their answer is that there are no plans for a cost-of-living raise. 0000001040 00000 n In fact Alcatel-Lucent was a foreign company and they could not take our pension funds. 0000000776 00000 n A1) Alcatel-Lucent is making available financial and tax education services through Deloitte, an objective, third party organization, at no cost to you. Health & Safety Fact Sheets ; Legislation & Politics ; News & Events TAJ6LuR.u(NdLN_Ht)txF%K.)/|q1oO|uB+t{?ZQWH^ hsPZ=+,wz/ I have many questions. sw The materials contained herein are intended for instruction only and are not a substitute for professional advice. More on Alcatel-Lucent retiree and pension issues and the acquisition by Nokia. The attachment labeled Lump Sum Program Announcement identifies who is and is not eligible. You will receive your first bill in mid-November for your December coverage. sure enough, the lack of stability does bring a certain focus - which, to your point, can be Great article. Some eligible former employees also had the opportunity to change their existing annuity option to a different annuity option. 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. If the plan is not fully-funded, the employer may apply for a distress termination if the employer is in financial distress. Case of the Week: Plan Establishment and Compensation, Case of the Week: Faulty Form 5500 Filings and Reasonable Cause, BREAKING NEWS: Announcing the 2022 NAPA Top DC Advisor Teams, Breaking News: Biden Vetoes Congressional Resolution Blocking ESG Rule, Jerry Schlichter and Tom Clark Fiduciary Litigation Debate: DC Pension Geeks Podcast, Brian Graff Has a Stark Warning for Advisors: NAPA 401(k) Summit, 401(k)s Increasingly Under Attack in Wake of SECURE 2.0 Passage. 0 Cash Lump Sum Options for: Company Pension; Any State or Federal Government Pension; Military; Police and FIre Pension; Teacher Pension; Call Us Toll Free: 1-800-853-5640 to reach a representative who will discuss your lump sum pension payment and retirement annuity options with you. This one-time opportunity--called the Alcatel-Lucent Retiree Lump-Sum Window Program (the "Program")--formally began on July 20, 2015 and ended on September 25, 2015. Q7) What happens to my healthcare if I take this lump sum buy out? Pros and Cons of Lump Sum Pension Payouts. at the current rate of yearly allocations given by the employer. 130 E. Randolph St. hmk0"tzc7hh:(}&5se(|EV i"0W-kb@@.P|,rQfd\e.9thw)SV"\N2,]Ew9gmP?e? Legacy Alcatel-Lucent Pension Plan If you are eligible for a legacy Alcatel-Lucent pension benefit, you can learn more about it through the YBR website. A lump sum pension distribution offers the flexibility of being able to spend or invest your retirement savings any way you see fit. Synopsis of Material Modifications Alcatel-Lucent Retirement . 8bOM4JDEEE3`%y1OSwR;jysrU ;(SRg3,}tc qR{SeL1E9im|6';Ye]DHH. Questions Regarding the Alcatel-Lucent Pension Lump Sum Buyout. I need to continue to withdraw money from my pension to live. Currently IL does not charge on pension income? 2015 Columbia Management Investment Advisers, LLC. This is an extremely important decision and it requires careful consideration. Some former employees might also have the opportunity to change their current annuity option to a different annuity form. Learn more here. My son in Corby, your life and leadership have been an inspiration to us all. 0000008372 00000 n A lump sum payout is the more exciting option of the two. Please review the attached documents for complete information regarding this Program. In fact these two announcements are not connected. Alcatel-Lucent announced it was being purchased by Nokia. As of Dec. 31, 2013, the U.S. pension funds had $30.1 billion in assets and $26.2 billion in projected benefit obligations, for a funding ratio of 115%, according to the companys most recent 20-F filing. One of them is offering lump sum buy-outs. Perhaps your real question is whether the buyout amount if invested in a different immediate annuity (a check a month for life, fixed) is enough to get you a check equivalent to the promised lifetime pension check. Currently the LTPP is funded at approximately 149%. endstream endobj 18 0 obj <> endobj 19 0 obj <>/ProcSet[/PDF/Text]/ExtGState<>>>/Type/Page>> endobj 20 0 obj <> endobj 21 0 obj <> endobj 22 0 obj <> endobj 23 0 obj <> endobj 24 0 obj <>stream In fact, at this years CWA T&T Leadership conference, our Research Department conducted a workshop on trends in Pension de-risking and bargaining. You DO NOT have to accept this offer. We strongly advise you to gather as much information as possible and to consult with your own personal financial planner, legal advisor and/or tax advisor. Below is a list of employers that have announced that they are offering lump-sum pension buyouts to certain groups of employees, former employees, or retirees. old, single, working fulltime, and in great health (knock on wood). hb```2ff5Ad`C PI&,~Lj b69=d291 0{D4)LTYs7-nJU:en\k'Wl2/WTN.\xaAAHy40QXah`h hhh s@`H1HQAi7*+':]0AC [8]XiV# M,y In fact, at this years CWA T&T Leadership conference, our Research Department conducted a workshop on trends in Pension de-risking and bargaining. Leadership. Your guidance is very much appreciated. xuSn0>DBH I$}C.SwB#s_u_0Bt lV:~D[S84eF}dKq_ ={K~922&1BOz:`. 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. All of this is costly to the company. 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). Sign up and get the best of News delivered straight to your email inbox, free of charge. 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. If I roll it over, say into an IRA, then the income becomes taxable. Alcatel-Lucent, Murray Hill, New Jersey, 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. The Program is not being offered to everyone. Choose your news we will deliver. Rob Kozlowski writes for Pensions & Investments, a sister publication of Business Insurance. Today, the pension plan is covered by ERISA and is protected by the Pension Benefit Guaranty Corporation (PBGC). 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.) To search for a combination of terms, use quotations and the & symbol. Biggest Lucent Pension Drop in a Generation. |@5=Ni!_DKZ89_<9Fa0MU)C2:)}yH0u g>.]uj&G([mRgm=G-MA5@au%l :vz,!MM@\Torx9 d:'FK]M2| Can the company terminate the pension plan? i received an offer for a lump sum payout based on the incorrect monthly pension. You may also contact the Alcatel-Lucent Retiree Lump Sum Window Benefits Center at (866) 617-7164. 0000007454 00000 n You can direct any service of legal process related to the Pension Plan to: The Alcatel-Lucent Employee Benefits Committee at Alcatel-Lucent, Room 7C-415, 600-700 Mountain Avenue, Murray Hill, NJ 07974, or The trustee of the Pension Plan (see "Pension Trust Fund"). For example, workers compensation. You point out that the pension trust is overfunded, and inflation has taken its toll, particularly on long-time retirees. Q5) Will the new IRS ruling on pensions affect our Lucent retirees taking this lump sum? Figuring this out is very simple. Two announcements have been made this year by Alcatel-Lucent and many of you might think they are connected. 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.) PBGC proposes pension plan risk-transfer disclosure requirement, Ford pension plan funding holds steady in 2014, COPYRIGHT 2023 BUSINESS INSURANCE HOLDINGS. That new car or luxurious vacation may not . 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