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 . Privacy PolicyTerms of UseCopyright. In terms of the Nokia merger There is a fear since Nokia is a foreign company our pensions would no longer be protected. Advisor action items: Talk the your Alcatel-Lucent clients who may be affected. Questions Regarding the Alcatel-Lucent Pension Lump Sum Buyout. 0000015986 00000 n In fact Alcatel-Lucent was a foreign company and they could not take our pension funds. 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. Alcatel-Lucent Retiree Lump Sum Window Benefits Center at (866) 617-7164. A lump sum payout is the more exciting option of the two. Early this year Alcatel-Lucent announced they were investigating offering a voluntary lump sum buy-out of retiree pensions. 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. Alcatel-Lucent Pension Functionality, London, completing a 100 billion ($123.7 million) buy-in at Pension Insurance Corp. Alcatel-Lucent enters into second buy-in for U.K. pension plan | Pensions & Investments - Brink's offers lump-sum payment to former employees For Alcatel-Lucent's U.S. pension plans, the funding policy is to contribute amounts to the . )@,F/3H4(-A &.}qp@|te\j|Y#|:Op:[JAa9@gTj-@J under the Plan to a one-time, lump-sum payment. |@5=Ni!_DKZ89_<9Fa0MU)C2:)}yH0u g>.]uj&G([mRgm=G-MA5@au%l :vz,!MM@\Torx9 d:'FK]M2| 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. Or you could wait a few years to buy an. Used with permission. Q2) Do I have to take this lump sum buyout offer? 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. endstream endobj 269 0 obj <>/Metadata 17 0 R/Pages 266 0 R/StructTreeRoot 32 0 R/Type/Catalog>> endobj 270 0 obj <>/MediaBox[0 0 612 792]/Parent 266 0 R/Resources<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 271 0 obj <>stream Eligible former employees are NOT required to make any changes to how or when they receive their Plan benefits. 2023 Communications Workers of America, AFL-CIO, CLC All Rights Reserved | Site Map | Privacy Policy, More on Alcatel-Lucent Retiree and Pension Issues and the acquisition of Nokia. 0000002947 00000 n A lump sum pension distribution offers the flexibility of being able to spend or invest your retirement savings any way you see fit. Alcatel-Lucent also recommends recipients of the offer consult with their personal financial planner and/or taxes advisor before making a decision. In addition, Nokia will most probably create a Nokia (USA) subsidiary which would be completely subject to US laws. 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. Q3) Page 10 of the Alcatel-Lucent Retiree Lump Sum Window booklet says the company has rights to terminate either plan, etc. Alcatel-Lucent announced it was being purchased by Nokia. `lsIf8 y[e?f-IE2.H54&%6h2SQ HUE{RV3@@ You DO NOT have to accept this offer. tS <]>> HWmkF}J\l|MiJ(R~H'g, a Lucent Retiree Lump Sum Window Program (the Program). Tenth Floor One of them is offering lump sum buy-outs. Q5) Will the new IRS ruling on pensions affect our Lucent retirees taking this lump sum? Any money left over in the fund the company would have to pay a penalty tax on. 3QxbOJZL3 i`/ 4(yKH.WT=\}LN8V^*~& In fact these two announcements are not connected. PBGC proposes pension plan risk-transfer disclosure requirement, Ford pension plan funding holds steady in 2014, COPYRIGHT 2023 BUSINESS INSURANCE HOLDINGS. The National Association of Plan Advisors is a non-profit professional society. TAJ6LuR.u(NdLN_Ht)txF%K.)/|q1oO|uB+t{?ZQWH^ hsPZ=+,wz/ trailer If I do decide to take it, what are my investment options to continue to withdraw on a monthly or yearly basis? That new car or luxurious vacation may not . 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. Figuring this out is very simple. 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). Please review the attached documents for complete information regarding this Program. Some former employees might also have the opportunity to change their current annuity option to a different annuity form. That will get you a guaranteed stream of (fully taxable) income for as long as you live. 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. 544 0 obj <> endobj A recent call with a financial advisor in California is representative of a common question related to pension de-risking and lump sums. 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. And it's true that one dollar in 1990 purchasing power requires $2.73 today. 2015 Columbia Management Investment Advisers, LLC. xoH-Ge/+Uj%_lQ8B\R,Nk;Od.''M[fy%'mNd/i(-*i_EvS4H.fx3Vpe 0000001040 00000 n Copyright 2023by NAPA, Compliance Administrator (TPA) Evaluation. 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. 0000022178 00000 n at the current rate of yearly allocations given by the employer. About 55,000 Suite 3200 Former employee, ATT/Lucent/Alcatel-Lucent is offering a lump sum buyout of our pensions. Even if they are, that does not mean you should take it. While a pension annuity offers a fixed monthly income, a. You have until September to decide and you should use the time to consult with someone who can review your individual situation. As we get more information, we will publish it on this site. Again, this is an extremely important decision and it requires careful consideration. 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. Call 1-888-232-4111 and select "Retirement and Investments", then select "Pension". For example, workers compensation. Sign up and get the best of News delivered straight to your email inbox, free of charge. Today, the pension plan is covered by ERISA and is protected by the Pension Benefit Guaranty Corporation (PBGC). Following are the questions, with the answers, that we have received to date. 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. xuSn0>DBH I$}C.SwB#s_u_0Bt lV:~D[S84eF}dKq_ ={K~922&1BOz:`. THIS PROGRAM IS STRICTLY VOLUNTARY! To read about CWA Members, Leadership or Industries, visit ourAbout page. Can the company terminate the pension plan? If you have further questions once you receive your package of materials, please contact the Alcatel-Lucent Retiree Lump Sum Window Benefits Center at (866) 617-7164. 268 0 obj <> endobj It is a sizable amount of money. 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. You may also contact the Nokia Benefits Resource Center. You may also contact the Alcatel-Lucent Retiree Lump Sum Window Benefits Center at (866) 617-7164. %PDF-1.7 % 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. A1) Alcatel-Lucent is making available financial and tax education services through Deloitte, an objective, third party organization, at no cost to you. Jobs, Health Care & Retirement Security . Social Security Solvency: Is it Really That Bad? Holy cow, Nevin, you wrote a white paper! You have until September to decide and you should use the time to consult with someone who can review your individual situation. Because this offer was already approved and in the works it is NOT impacted by the ruling. J m^?bSL&MM>^S!OYuFG]2_w*'~vmi"chV6{8E&`(72jje&}\MlKM+TLigQC42BIj4^C};)k"C+"?j^SDE5[k]83/pivCNSa+| $ endstream endobj startxref In fact, at this years CWA T&T Leadership conference, our Research Department conducted a workshop on trends in Pension de-risking and bargaining. Currently the LTPP is funded at approximately 149%. View all Financial Planning / Retirement questions. L Ne`8H3*00\?0 Z* xref endstream endobj 273 0 obj <>stream Skip up main content . old, single, working fulltime, and in great health (knock on wood). Thank y. Terry Says: Well, first of all, you have one fact wrong. 17 24 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. What asset class is best for corporate plans' growth investments when using LDI? 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. 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. 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. The Program Window is only in effect beginning July 20, 2015 and ends at 11:59 p.m. (EDT) on September 25, 2015. 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. 0000015024 00000 n Q6) What company is the new annuity going to be with? 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 a sizable amount of money. Alcatel-Lucent announced it was being purchased by Nokia. i receive a pension from alcatel-lucent. Synopsis of Material Modifications Alcatel-Lucent Retirement . Your guidance is very much appreciated. For media inquiries, call CWA Communications at 202-434-1168 or emailnews@cwa-union.org. XWyTfnzp@EA0DEqD" 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. 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# They could do that by purchasing annuities through an insurance company. 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 Alcatel-Lucent Old Scheme, London, completed a 100 million ($123.7 million) buy-in with Boarding Insurance Core. I need to continue to withdraw money from my pension to live. Examples of those protections are: The Company may not retroactively reduce those benefits, once they are vested. 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. 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. 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. What questions should I be asking? So assuming that you are not going to be sued, this is strictly a financial planning question. The premium amount will still be based on what your current monthly pension amount is today. 0 startxref Sign up to receive Terrys free newsletter!! 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. 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. Traditionally, when interest rates rise by 1% the amount in an Lucent employee's lump-sum will drop by 8 - 12%. My son in Corby, your life and leadership have been an inspiration to us all. 0000009608 00000 n The Columbus Dispatch Tuesday February 16, 2016 5:00 AM. Legislation and Politics. endstream endobj 548 0 obj <>stream This means that there are specific guidelines that must be followed under federal law. Early this year Alcatel-Lucent announced they were investigating offering a voluntary lump sum buy-out of retiree pensions. A2) This offer is strictly voluntary. The Pension Protection Act helps to ensure the plan is appropriately funded. 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 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.) ~n]A9iRD wkvU@HB8E8JKkt>:O) For example, hurricane & loss. Bottom Line: Rising rates reduce lump sums. We have raised the question with Nokia. 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. A3) The language on page 10 is standard language. Last week retirees received the first official notice of the lump sum offering. 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. 17 0 obj <> endobj "9:@$;dIs0&w@qY }*#l8l 0 sure enough, the lack of stability does bring a certain focus - which, to your point, can be Great article. 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. Q1) Where can I get more information about this offer? 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. In terms of the Nokia merger -- There is a fear since Nokia is a foreign company our pensions would no longer be protected. In fact Alcatel-Lucent was a foreign company and they could not take our pension funds. 0000000776 00000 n The attached information (cover letterprogram announcementFTE Guide) will be mailed by Alcatel-Lucent to eligible Plan participants beginning tomorrow, Friday, June 26, 2015. !J,3pNM,A|f5\mCl]) Pv&hhy 6u!2|)z9F_!lE^wxDaOo8^ %SE91q45),lEQN8:O $o2dhcflYK fgOlK: 2SYu*q"H3;Ydi37t6K^4nb8o?/zYK To search for a combination of terms, use quotations and the & symbol. In Column D, at your life. To do so, however, the employer must prove to a bankruptcy court or to the PBGC . Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Columbia Threadneedle. 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.) 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. You can make some investments that are likely to generate growth and income to support your retirement needs. %PDF-1.5 % I am 64 yrs. %PDF-1.4 % 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 . We have been receiving a number of questions regarding the lump sum buyout recently offered 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). 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. %%EOF 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. 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 Vm}O%TimaUMG60)f 6(jvR NEZ;[R!m))62Kr)7;yPedf`zms 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. The lump-sum window runs from July 20 through September 25 and is completely voluntary. %%EOF Biggest Lucent Pension Drop in a Generation. 130 E. Randolph St. For media inquiries, call CWA Communications at 202-434-1168 or emailnews@cwa-union.org. 284 0 obj <>/Filter/FlateDecode/ID[<401FD2CD3C4E2E4F956EAD5ECE542FCA><5B6DADCB6C7B5D49B41567324319F557>]/Index[268 30]/Info 267 0 R/Length 90/Prev 182067/Root 269 0 R/Size 298/Type/XRef/W[1 3 1]>>stream 2023 Communications Workers of America, AFL-CIO, CLC All Rights Reserved | Site Map | Privacy Policy. I'd point out however that not all wobble stools are bad. 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.

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