Husband got riffed after 27 years

[lumpkin]

My husband lost his job last Monday. We knew it was coming and were actually looking forward to it because he was in limbo for almost a year waiting for the ax to fall. It was very tense and he''s gone nearly all grey in the last year. Very stressful.

He''s been with the same company for 27 years (almost 2, although it has been bought three times over that period. We''re in our mid 40''s so we know it''s going to be hard to replace this job, but at least he''s got a very good severence package. But they''re trying to stiff him on his pension package to the tune of about $20k. Don''t know if he can do much about that, but he''s pressing them about it.

He does have very good prospects, but replacing the salary and the pension plan, not to mention insurance, are going to be difficult. I''m sure we''ll be fine, but we''re anxious with the uncertainty of our financial future.

It''s going to be quite a ride, so please keep us in your thoughts and prayers.

 

[chrono]

I''m sorry to hear about your husband''s layoff. It isn''t too bad getting a new job when one is older these days; less stigma and discrimination although it is still stressful time. A good severance package is always a good thing to smoothen things until he finds another job.

 

[Dee*Jay]

Lumpkin, I'm so sorry to hear of your husband's RIF. But at least now you have closure rather than sitting around waiting for it to happen, and I hope that it all turns out for the best. Hang in there.

 

[Gypsy]

Oh honey. I''m sorry. What a stressful time for you both. You definitely will be in my thoughts and prayers. ((HUGS))

 

[Kaleigh]

Lumpkin,
I''m so sorry to hear this. Big hugs. I''ll be praying for you guys!!

 

[FireGoddess]

So sorry to hear this Lumpkin. Sometimes I feel like the waiting is way worse than when it finally happens. There''s so much angst wrapped up in...waiting. I hope things work out for you...you''ll be in my thoughts!!!

 

[isaku5]

I''m so sorry to hear this, Lumpkin. Even though you know it''s coming, it''s very stressful when it actually happens. My thoughts and prayers are with you and your family. BIG HUGS!!!

 

[diamondfan]

Whether you expect it or not it is a tough thing, especially around the holidays. I am sure all will be fine, but my thoughts are with you both and your family too...

 

[canuk-gal]

HI:

How upsetting! Sending good vibes your way.....

cheers--Sharon

 

[justjulia]

I really feel for what you are going through. We went through this very thing last year. Finally ended up moving to cut costs and it was a tremedously stressful time. It''s good to talk with people, because then you realize that you are not alone. As my husband is always saying, we have to look forward, not back. He ended up finding a better job at a better place, but it did take a while. In the meantime, we went through savings and I nearly lost my mind. We''ve been in our new home for about a month now, and I am adjusting to being in the city again--which is really a nice surprise how much I like it. Amazing how change can ge a good good thing. So, here is a cyber hug and just know that things have a way of working out.

 

[TravelingGal]

I am so sorry to hear this. I am hoping that things work out for you and he finds a job quickly!

It just irritates me when companies do this before the holidays, but having been through companies who did lots of layoffs, I think it''s pretty common. We used to joke that if we had our jobs after thanksgiving, we were probably clear for another year because they always want to do layoffs before the fiscal year ends. I was so happy to get my current job where the fiscal year ends in March!

 

[Cehrabehra]

I''m so sorry - here''s to doors that open for new and better opportunities!!

 

[roppongi]

Lumpkin, when one door shuts, another one always opens and what''s behind it is always better. I am thinking of you and your husband and wishing you both well. Please take care and think positive thoughts. We are here for you!

 

[SuzyQZ]

Lumpkin:

I'm so sorry for you. My husband was laid off in November several years ago too, he was out of work for over a year. Needless to say our Christmas was lean. We had an inkling it was comming so we tried to prepare (save up, pay off bills, no extra expenditures etc). I don't know if you have children still living at home or not, or whether you have a job or not, that does affect your situation.

My husband put it like this "Time to circle the wagons and prepare for a very cold winter". Well our family and friends were a blessing to us. We never asked for help, but they were there for us. It took a while, and it was tough, but we grew stonger in our marriage because of it. He did eventually find a job that he would probably never have gone after had he had his old job. He loves it, they love him and times have never been better.

So the message is keep the faith, and pray. Good things DO happen to good people. I know your luck will turn and you may even be in a better place for it. I'm hoping this season is short lived for you and you will find financial security and peace again soon.

((Hugs))

 

[AGSHF]

Lumpkin,

I''m sorry to hear about your husband''s situation. Please make sure that as he negotiates his pension benefits, that he is well advised. The company will be trying to get him to agree and sign off as quickly as possible, but as an age over-40 employee, he has certain rights to seek legal counsel and a certain number of days he has to consider his deal. (I''m working from memory here so please double check with your own advisor.)

Also, because he has so many years of service with this one employer, his pension (defined benefit plan) is likely to be quite valuable. Whether he takes his pension in a lump-sum or keeps his vested benefits with this employer until he is eligible to draw them at retirement age is another important decision. Just remember that there are tax consequences to any lump-sum payment and extra tax penalties if he withdraws retirement funds (whether they are from the defined benefit plan or 401(k) plan) if he takes the money before he is age-eligible. If he chooses to wait until he is retirement age to receive pension payments, you have to evaluate the solvency of his soon-to-be former employer as retiree benefits are among the first to be cut.

I remembered seeing a recent WSJ article about a change in the manner in which the value of retirees'' lump-sum payments are calculated. It may not be applicable to him, but here it is. The text is the same as the WSJ article:

http://www.post-gazette.com/pg/06299/732847-28.stm

Do a great deal of research or, better yet, get some good financial advice before he agrees to anything.

I hope this helps in some way. I send you my best wishes for a quick recovery from this turn of events.

 

[AGSHF]

Here are a couple of links that may help you get familiar with the provisions of the Older Worker Benefit Protection Act (OWBPA):

http://www.smallbusinessnotes.com/operating/legal/laborlaws/owbpa.html

http://www.seniormag.com/legal/adea-waiver.htm

 

[Ellen]

Lumpkin, I''m really sorry to hear. I will definitely keep your family in my thoughts. {{{hugs}}}

 

[perry]

I''ve been through this a time or two.... So I feel your pain.

While he needs to be carefull about what he signs as that can hurt - you - and he - also needs to understand that in many cases with the old pension plans that the company owns the plan - not the employee. Thus, his chosing a lessor setlement may actually give him the most money if the setlement involves a cash transfer - or a guarantee to a fully funded program not in the companies control. Otherwise - he may end up holding 100% of nothing as the company defunds the previous plan.

How do I know this.... in part experience.

I wish you and him the best. It is possible to find good work, but rarely a good pension plan anymore.

Let me know if we can help in anyway.

Perry

 

[tanuki]

Lumpkin, I''m sorry to hear about your husband''s career stress and hope that things turn out well in the end.

 

[scarlet16]

Date: 11/11/2006 12:08:55 AM
Author: AGSHF
Lumpkin,

I''m sorry to hear about your husband''s situation. Please make sure that as he negotiates his pension benefits, that he is well advised. The company will be trying to get him to agree and sign off as quickly as possible, but as an age over-40 employee, he has certain rights to seek legal counsel and a certain number of days he has to consider his deal. (I''m working from memory here so please double check with your own advisor.)

Also, because he has so many years of service with this one employer, his pension (defined benefit plan) is likely to be quite valuable. Whether he takes his pension in a lump-sum or keeps his vested benefits with this employer until he is eligible to draw them at retirement age is another important decision. Just remember that there are tax consequences to any lump-sum payment and extra tax penalties if he withdraws retirement funds (whether they are from the defined benefit plan or 401(k) plan) if he takes the money before he is age-eligible. If he chooses to wait until he is retirement age to receive pension payments, you have to evaluate the solvency of his soon-to-be former employer as retiree benefits are among the first to be cut.

I remembered seeing a recent WSJ article about a change in the manner in which the value of retirees'' lump-sum payments are calculated. It may not be applicable to him, but here it is. The text is the same as the WSJ article:

http://www.post-gazette.com/pg/06299/732847-28.stm

Do a great deal of research or, better yet, get some good financial advice before he agrees to anything.

I hope this helps in some way. I send you my best wishes for a quick recovery from this turn of events.

Lumpkin-
I''m not an attorney so I can''t give you actual advice (I do work in an employment law firm) but I''d completely agree with AGSHF. If you have any doubts as to his rights, I''d turn to a qualified employment attorney in your area to review the severance package and to advise you on how to get the pension payments he likely is entitled to.

I wish you guys the best of luck. I''m sure things will turn out fine.

 

[flower12]

I am really sorry to hear that,lumpkin I am praying for you and your husband.

hope everything get better.{{{{{hug}}}}}

 

[diamondsrock]

I'm sorry to hear that. I have seen 4 members of my extended family get laid off in the past two years. They were all over 40 and three of them had been at the same job for 10plus years.
Sending good thoughts your way. When one door closes another one opens. I'm sure everything will work out!

 

[IrishAngel7982]

I''m sorry lumpkin. I''m wishing you luck in your husband''s job search!

 

[onedrop]

Lumpkin, I am so sorry to hear of this. It''s a bummer for it to happen at all let alone around the holidays. Just a few years ago there was a major RIF at my job of folks in my position so I really thought I could be one of those let go. Gratefully I wasn''t, but by the time the fiscal year ended they had started hiring folks back. In fact they have hired even MORE people than the # RIF''d in recent years to accomodate the work that needs to be done. Poor planning on their part, but that''s another issue. What I hope is that your husband''s time of unemployment is very very short.

 

[diamondseeker2006]

That is terrible Lumpkin! But these days, we here it far too often. There is no loyalty toward employees anymore. It is very sad. I hope he finds another job that he really likes very soon!

 

[lumpkin]

I am so touched. Thank you for all your well wishes.

The biggest bummer of this happening before the holidays is that it cuts several weeks of potential job hunting off. On the other hand, it gives him a little time to adjust and regroup.

I know this has become very common place, and there are many others in our same boat.

He just finished his bachelor''s degree two years ago and DeVry has been very helpful. He went out and spoke with a counselor, they worked on his resume, the counselor gave him a lot of insight into certain companies where people don''t think to apply and that are actually solid employers. Although they won''t "push" his resume to companies because they typically do that for recent graduates, they are providing other services that will be very helpful.

Thank you so much for keeping us in your thoughts and prayers. It''s very uplifting and so much appreciated.

 

[lumpkin]

Date: 11/11/2006 12:08:55 AM
Author: AGSHF
Lumpkin,

I''m sorry to hear about your husband''s situation. Please make sure that as he negotiates his pension benefits, that he is well advised. The company will be trying to get him to agree and sign off as quickly as possible, but as an age over-40 employee, he has certain rights to seek legal counsel and a certain number of days he has to consider his deal. (I''m working from memory here so please double check with your own advisor.)

Also, because he has so many years of service with this one employer, his pension (defined benefit plan) is likely to be quite valuable. Whether he takes his pension in a lump-sum or keeps his vested benefits with this employer until he is eligible to draw them at retirement age is another important decision. Just remember that there are tax consequences to any lump-sum payment and extra tax penalties if he withdraws retirement funds (whether they are from the defined benefit plan or 401(k) plan) if he takes the money before he is age-eligible. If he chooses to wait until he is retirement age to receive pension payments, you have to evaluate the solvency of his soon-to-be former employer as retiree benefits are among the first to be cut.

I remembered seeing a recent WSJ article about a change in the manner in which the value of retirees'' lump-sum payments are calculated. It may not be applicable to him, but here it is. The text is the same as the WSJ article:

http://www.post-gazette.com/pg/06299/732847-28.stm

Do a great deal of research or, better yet, get some good financial advice before he agrees to anything.

I hope this helps in some way. I send you my best wishes for a quick recovery from this turn of events.

Thank you very much for this information and insight. I am just now getting back to the board and haven''t followed up on the links you provided yet, but I will do so immediately.

I know my husband had to sign some paperwork before he left, but I''m sure it was not regarding his pension plan. We have known several people, older than we are, who got royally screwed over their pension plan, and we are definitely getting that money out of the fund it is in now. I don''t know whether we''ll roll it over to a 401-K, but we definitely need to get some financial advice.

We were thinking about talking to our tax accountant about it, as that''s part of our services. What do you think of that idea? I don''t relish the idea of hiring an attourney because I don''t personally know anyone or how to evaluate whether or not they are good at what they do. Plus, I don''t want to hand over a lot of our money to them for information that might be readily available with a little research. Maybe that''s penny wise and pound foolish, though.

I just spoke to him while I''m posting this and he has 45 days to review some paperwork and get it signed. So we WILL be seeing someone for advice. One of his friends suggested rolling it over to a Roth IRA because it''s longer term and you can draw from it tax free, supposedly. Obviously, we have a lot to look into.

Any further insight would be much appreciated, AGHSF. Thank you for all you''ve provided -- I will be looking into it immediately.

 

[anchor31]

Oh, that sucks... I hope you''re going to be okay.

 

[AGSHF]

Lumpkin,

I''ve haven''t checked until tonight, so I apologize for not responding sooner.

I''m glad to hear that my suggestions are helpful. Let me just recap my thoughts, more in the nature of a checklist as opposed to legal advice:

(1) Your husband is over 40. He has certain rights under the OWBPA. If he is asked to sign a separation agreement and, in return for severance benefits, is also required to sign a release or the separation agreement contains a release, the company must give him a certain number of days in which to consider whether he wants to sign the release (I believe it''s 21 days), encourage him to seek legal advice AND your husband has a seven-day-period in which he can back out of the agreement even after he has signed it.

(2) Regarding his "pension" benefits: it''s unclear whether you are referring to his 401(k) retirement funds or his "pension," as in what he might get upon reaching retirement age under the company''s defined benefit plan. He/you need to understand the difference and what he has under each plan. Read and understand his most recent benefits statements and the applicable section of the employee handbook.

Quick summary: If he has monies in his company''s 401(k) retirement plan (contributions he made himself + matching funds + investment earnings), he may have the choice of rolling those funds over to his own IRA rather than leaving the account with the company''s retirement plan trustee.

I don''t know if 401(k) retirement funds are eligible for Roth IRA treatment. IF he withdraws these funds (i.e., takes a check), he must re-invest (rollover) those funds within a limited time period with another investment company OR (a) he will owe income tax on the entire amount for 2006, (b) he will owe 10% penalty for early withdrawal (he is not age 59-1/2) and (c) he will not have those funds growing for his future retirement.

If he is entitled to receive a pension upon reaching retirement age (typically based on years of service and the amount of his salary when he was last employed by the company), he won''t be eligible to receive those funds until he is that age. If he was covered by a pension plan, were your husband''s benefits vested? It''s possible that his employer may offer to settle out this retiree benefit with a lump-sum amount, check to see if that''s offered.

It is with regard to this type of retirement pension income that long-term concerns arise. If the employer is facing financial trouble, then its pension benefits may be reduced in a bankruptcy proceeding or turned over to administration by the PBGC (Pension Benefit Guaranty Corporation). These are complicated issues and are a worry only if he is eligible to receive a defined benefit pension from this employer.

I suggest strongly that you talk to your tax accountant about the tax and financial issues you face when making decisions concerning his retirement funds (whether it''s his 401(k) plan account or his pension benefits).

If your husband believes that there are legal issues raised by his termination, i.e., unfair treatment due to his age (the age discrimination claim), then he will need to contact the EEOC before he can pursue a legal claim against the company.

And don''t forget about COBRA to continue medical insurance coverage while he seeks employment, especially if anyone in your family has a pre-existing medical condition. Has the employer offered to pay for COBRA coverage for a period of time?


I''ve listed the main issues for you to consider above. The best strategy he can adopt is to be well-informed so that he can make the right financial decisions regarding his severance package and retirement and medical benefits.

Again, I hope this helps and I send you my best wishes.

 

[Madam Bijoux]

Best of luck to you and your family.