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. A recent call with a financial advisor in California is representative of a common question related to pension de-risking and lump sums. The advisor asked:
“What are the details around Alcatel-Lucent’s lump sum offer to former employees?”
Highlights of Discussion
- Approximately 75,000 eligible former employees, surviving beneficiaries and alternate payees of Alcatel-Lucent have begun receiving formal lump-sum window notices. 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.
- Some former employees might also have the opportunity to change their current annuity option to a different annuity form.
- The lump-sum window runs from July 20 through September 25 and is completely voluntary. Recipients have the option to do nothing and will continue to receive their current monthly annuity payments.
- 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.
- Alcatel-Lucent also recommends recipients of the offer consult with their personal financial planner and/or tax advisor before making a decision.
- Advisor action items:
— Talk to your Alcatel-Lucent clients who may be affected.
— Encourage them to confirm their eligibility for the offer with their benefits department.
— Alert them to be on the lookout for their Benefit Decision Kit.
— Offer to log in to their benefits website with them to seek out information.
The Learning Center Resource Desk is staffed by the Retirement Learning Center, LLC (RLC), a third-party industry consultant that is not affiliated with Columbia Threadneedle. Any information provided is for informational purposes only. It cannot be used for the purposes of avoiding penalties and taxes. Columbia Threadneedle does not provide tax or legal advice. Consumers consult with their tax advisor or attorney regarding their specific situation.
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.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
© 2015 Columbia Management Investment Advisers, LLC. Used with permission.
