Eligible for your pension plan? Here is how to calculate it

Yes. Believe it or not you do need to qualify for a pension plan. Generally it is five(5) years of service but every company is different.

If you plan on retiring or leaving your company you need to know where you stand with your pension plan and MUST know how to be able to calculate your benefits.

As a recruiter, I see clients asking me, a recruiter! , if they qualify. Many laid off people or retirees are unsure if they have a pension or not. The ask me if they met their pension plan requirements. Lets first talk about how to know if you meet the pension plan requirements in generalities.

Service Pension Eligibility & Calculation

Service Pension Eligibility or SPE is basically the formula to qualify for a pension

For Example. AT&T relies on the “modified rule of 75” changed from the Rule of 75 in 1999. This rule is used to determine an employee’s retirement eligibility, pension, and retiree medical benefits.

Anyone nearing retirement should know his or her number. That is, how much you need saved to retire. As an AT&T employee nearing retirement, there’s another important number to know. You could say it’s just as important as the target amount you plan to save in your AT&T 401(k) plan to help supplement your AT&T pension. The number is 75, and it can greatly impact your AT&T retirement benefits.

OTHER IMPORTANT THINGS TO KNOW:In 1999 then SBC changed 75pt to Mod 75. Since not every combination of 75 points applies after December 1999.

HOW IT WORKS: You are eligible for a vested pension benefit after five years of service, but your benefit will be negatively affected if you do not reach the age AND service breakpoints for your employment position, as shown in the chart below. You must meet BOTH minimum requirements.

For example, let’s assume you have 24 years of service and are age 51. Although the combination adds up to 75 (24+51=75), you do not qualify because you fail to meet both minimum requirements at each break point.

For AT&T management employees who meet the 75-point rule but don’t have 30 years of service, their pension benefit will be reduced if taken before age 55.

If you do not meet the 75-point rule yet and are pension eligible (5 years of service), you will receive your earned AT&T pension at age 65. Taking it prior to age 65 will result in a significant reduction.

Further, employees who satisfy the modified rule of 75 may be eligible for subsidized retiree medical, dental, vision and life insurance benefits.

Note: If you’re are a union employee with 30 or more years of service, however, the pre-55 reduction does not apply.

If you are currently a manager and you began your career as a Craft employee, you will actually have two pension accounts. When you retire, you will be able to draw from both pensions. We’ll talk about the inner-workings in the bridging section a little later.

The Craft pension is simply based on your pension band, NCS, and any age penalties. The pension band used to calculation your benefit will be that which you are in at the end of your career. Again, Fidelity will give you the easiest way to calculation your projected benefit although we can also do it manually to compare the results.

Lastly, if you are not clear what your pension amount is currently, we can help estimate it for you. We have many years of experience working with these formulas and we understand how to incorporate and minimize your age penalties.

If you still have questions or concerns about your pension plan, you can reach out to us at Techstaffer.

If you need cash and are considering 401(k) in-service withdrawals or borrowing, visit https://techstaffer.blog/2020/01/07/need-cash-consider-401k-in-service-withdrawals-borrowing/

For more information on life after AT&T and why should you work, visit https://techstaffer.blog/2020/01/06/life-after-att-why-would-i-work/

For more information on AT&T job postings, visit https://techstaffer.blog/2020/01/31/att-surplus-job-ideas/