Aflac Employees - Momentum Wealth

Aflac Employees

Are you a current or former Aflac employee with 5 years of vested service?

If so, you’ve likely received a packet informing you about the termination of the Aflac Pension Plan. This can bring up many questions: What does this mean? How does it impact me? What actions should I take?

We’re here to break it down for you.

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What do I need to know about my Aflac Pension?

 

Aflac Pension Plan Termination

 

The Aflac Pension Plan is being terminated, freezing all benefit formulas.

 

 

Timeline illustrating key dates and events related to the termination of the Aflac Pension Plan. End of June 2024: Receive information on lump sum amount. July and August 2024: Make your decision regarding the lump sum during this one-time election window. November 2024: Lump sum payments are scheduled to occur.

 

 

If you miss this deadline, you can still elect to receive your monthly benefits when you meet the usual age and service requirements of the Plan.

Would you like help with your Aflac pension?

BOOK A FREE 1-ON-1 AFLAC PENSION STRATEGY SESSION

What is a Pension?


A pension is a retirement plan that provides you with a steady income stream after you retire. Typically funded by employers, pensions are designed to ensure financial security throughout your retirement years. Your benefits are calculated based on factors like your salary history and years of service. You have the option to take a lump sum or receive monthly payments, which you can choose based on your financial needs and goals. Understanding your pension options is crucial for planning a secure and comfortable retirement.

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Monthly Retirement Benefit Calculations 

 

Your monthly retirement benefit under the Plan is calculated based on the following formula:

 

Timeline illustrating key dates and events related to the termination of the Aflac Pension Plan. End of June 2024: Receive information on lump sum amount. July and August 2024: Make your decision regarding the lump sum during this one-time election window. November 2024: Lump sum payments are scheduled to occur.

 

Average Monthly Compensation: This is calculated by taking your highest-paid 5 consecutive years within the last 10 years of Plan participation, divided by 60. Compensation earned after December 31, 2023, or after opting out in 2013, is not included.

 

Compensation Limits: Your pension-eligible compensation is capped annually by IRS limits. For example, the limits were $280,000 for 2019, $285,000 for 2020, $290,000 for 2021, $305,000 for 2022, and $330,000 for 2023

 

What are my options?

 

 

This image visually compares the financial implications of choosing between monthly pension payments and a lump sum payout for Aflac employees. It includes charts and graphs illustrating potential benefits, investment risks, and long-term value based on different scenarios. This comparison helps employees make informed decisions about their retirement options, considering factors like life expectancy, inflation, and personal financial goals. Visual comparison of the financial outcomes between monthly pension payments and lump sum options for Aflac employees. Comparison of monthly pension payments versus lump sum options for Aflac employees. MONTHLY PAYMENTS: Married Participants: 50% joint and contingent annuity; monthly payments for your lifetime, reduced compared to a Single Life Annuity; Upon your death, your spouse receives 50% of your monthly payments for their lifetime; the reduction is based on the ages of you and your spouse at the start of payments. Unmarried participants: single life annuity; fixed monthly payments for your lifetime; no payments to beneficiaries after your death. Certain and Life Annuity: provides monthly payments for your lifetime; If you die before receiving a set number of payments, your beneficiary will receive the remaining payments as a lump sum; you can choose guaranteed periods of 5, 10 or 15 years. LUMP SUM: Lump sum payment: available during a one-time election window in July and August 2024, with payment in November 2024; calculated based on interest rates and mortality tables as of June 2024.

 

 

Special options and limitations apply for disability retirement and small benefit amounts ($7,000 or less).

Monthly Payments versus a Lump Sum

 

To determine whether taking monthly payments or a lump sum is better, you need to consider several factors:

Investment Risk

If you take the lump sum, it needs to be invested wisely to achieve the expected return. Consider market risks and your investment strategy.

Life Expectancy

If you live longer than expected, monthly payments may provide more financial security.

Inflation

Monthly payments might not keep up with inflation unless they are specifically inflation-adjusted.

Personal Financial Situation

Immediate financial needs, debt, and other financial goals can influence your decision.

Would you like help with your Aflac pension?

BOOK A FREE 1-ON-1 AFLAC PENSION STRATEGY SESSION

Consult a Financial Advisor for Your Aflac Pension

 

Navigating your Aflac pension options can be complex. Consulting with a financial advisor can help you analyze your specific situation and make well-informed decisions tailored to your needs.

Knowing Which Way to Go with Your Aflac Pension

Deciding between monthly pension payments and a lump sum payout can be complex. Always consider consulting with a financial advisor to analyze your specific Aflac pension options and make the best-informed decision for your financial future.

Trustworthy Advisors to Guide You to Your Personal Goals

Momentum’s approach combines client-focused financial planning with the latest technology to simplify decisions and put you in control of your future. We work transparently with our clients, ensuring they understand the “why” behind every decision in their plans.