If you are a manager at AT&T you may have recently received some information about an Enhanced Pension Offer or EPO. This offer is also being given to certain U.S. managers and certain nonmanagement, nonunion employees. Basically, AT&T is offering a 10% increase to your AT&T Pension Plan if you are willing to retire on March 31, 2015. If you’ve been at AT&T for a while, you know these offers come from time to time. Let’s take a look and see what the offer entails.
First, the EPO is available to Level 1 through 5 U.S. managers and certain nonmanagement, nonunion employees who participate in the AT&T Pension Benefit Plan and are retirement eligible as of March 31, 2015. Your status of “retirement eligible” is based on where you fall on AT&T’s Modified Rule 75 chart. The chart breaks down like this:
| Age || Term of Employment |
| Any Age || 30 years |
| 50 || 25 years |
| 55 || 20 years |
| 65 or older || 10 years |
Next, in addition to your normal AT&T Pension Benefit Plan payment options, AT&T is offering a one-time lump sum offer. The 10 percent enhancement will be applied to each form of payment that you are eligible to elect under the Plan and the EPO.
- For example, if you are eligible to elect a Single Life Annuity as of April 1, 2015, in the amount of $1,000 per month, as an EPO Eligible Participant, your Single Life Annuity will be increased by 10 percent to $1,100 per month.
- As a second example, if you are eligible to elect a Lump Sum of $100,000 as of April 1, 2015, as an EPO Eligible Participant, your Lump Sum will be increased by 10 percent to $110,000.
- As a third example, if you are eligible to elect a partial Lump Sum of $100,000 and a residual annuity of $500 per month as of April 1, 2015, as an EPO Eligible Participant, your partial Lump Sum will be increased by 10 percent to $110,000 AND your residual annuity will be increased by 10 percent to $550 per month.
There are some very important dates to remember if the EPO is something you may be considering. First, the election period will be from February 3rd to March 6th. If you are eligible for the offer, AT&T will have more information for you, such as payment calculations on February 3rd. Finally, if you elect to participate in this EPO, March 31st will be your final day of employment. Please remember that this decision is irrevocable, so choose wisely.
As we always say, your retirement timing and decision is unique to you and involve a number of factors. There are items in this EPO regarding metering and caps, reachbacks, previously planned retirements, etc. that you may have additional questions about. We would encourage you to contact one the financial advisors at Sound Financial Strategies Group and let us help you navigate this difficult decision.
Investment Advisory Services offered through Sound Financial Strategies Group, Inc. (“SFSG”), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies.
Neither SFSG nor APW Capital are endorsed by, retained by, or affiliated with AT&T. The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement.
Posted on Fri, December 19, 2014
by Sound Financial Strategies Group