People have said the Cash Balance plan is terrible. What is behind all of this talk?
A. It is a terrible plan for people with 15+ years of service and who had invested many years with the company on the promise of a pension benefit. One of the issues is that AT&T has claimed that people were getting too much pension between the age of 55 and 60 and that the plan had to be adjusted to make higher payout dates and come in line with the rest of the industry. It now appears that making Cash Balance pay off a better return means waiting until you reach 65 and beyond. Most of us realize that through mergers, layoffs, and other factors, we may never reach the point where Cash Balance pays this “fair return”. Q. I understand the difference between the plans, but it still seems that I would rather have cash in hand than a monthly annuity. A. It seems that way until you calculate the amount of a penalty you take between the age of 50 and 60 as compared to the old plan. This penalty can be over 50%, when compared to the benefit under the old plan. It does not improve until you ap
