As of July 1, 2012, Ford Motor Company is offering all salaried employees the option to receive their accrued pension benefits in a lump sum payment upon retirement. Previously, as part of a special pension buyout program, the company offered the lump sum option to roughly 90,000 retirees, former employees, and surviving spouses in a rollout process that was completed in 2013. Visteon also offered approximately 10,000 retirees and former employees that had not yet started collecting their pension benefit the option for a one-time pension lump sum payment.

Mainstay Capital Management is committed to assisting our clients and others in determining which pension payment option is best for their individual situation. We have conducted several workshops on the pension lump sum payment options for retirees of Ford, Visteon, and other companies. These workshops have generated many questions. Below is a list of questions that were brought to us by our Ford and Visteon clients, as well as others, through our workshops, webinars, and other discussions.

Information contained herein has been compiled from sources believed to be reliable, but its accuracy and completeness are not guaranteed and Mainstay Capital Management assumes no responsibility for errors or omissions.

As an active Ford employee, will I need to make an election regarding the lump sum distribution option immediately following retirement?

Ford retirees that elect a benefit commencement date that is within 180 days of their termination date will have the option to elect a lump sum distribution. After the 180 day period only a monthly benefit payment option will be available.

Can I split a lump sum distribution into two parts – half to the annuity (pension payments) and half as a lump sum distribution?

This option is not available for Ford or Visteon retirees.

Once I receive the lump sum distribution payment, can I switch to receiving monthly payments if I change my mind?

No. Once a lump sum distribution has been paid (or monthly benefits commence) you cannot revoke or change your election.

Do I have the ability to take a lump sum distribution while I am an active employee?

Ford and Visteon employees do not have an option to take a lump sum distribution of their pension benefit until the time of retirement. Currently, Ford salaried employees have the lump sum distribution option available to them at retirement.

What are the tax implications of taking a lump sum distribution?

There are no tax implications for those taking a lump sum distribution and rolling it into an IRA or another qualified plan that accepts rollover distributions. However, if the lump sum distribution is taken and rolled into a qualified plan at age 70½ or older, the distribution will be used in calculating any future Required Minimum Distributions (RMDs). Taken as cash, the lump sum is fully taxable as ordinary income.

Can you address the different risks associated with electing a lump sum pension payment?

Please review our "Pension Lump Sum Special Report" for information on investment, tax, and longevity risk due to inflation, among others.

Important Consumer Disclosures

Mainstay Capital Management, LLC is an investment advisor registered with the Securities and Exchange Commission. Due to various state regulations and filing requirements, Mainstay and its representatives may only provide investment advisory services in those states in which it is first appropriately registered or otherwise exempt or excluded from registration requirements. The purpose of this website is to provide the public with general information about the services offered by our investment management firm. Mainstay does not render personalized investment advice or services or effect, or attempt to effect any securities transactions, on this website. Our firm continuously monitors its filing requirements in all states, and will provide individualized advisory services only in accordance with various state regulations. Mainstay does not make any representations or warranties as to the accuracy, completeness, or relevance of any information prepared by any unaffiliated third party provider, whether linked to Mainstay's website or incorporated herein. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

 

Disclosure Information - Rankings and Awards

Barron's Magazine - Top 100 Independent Wealth Advisors

According to Barron’s: The rankings are based on data provided by individual advisors and their firms. Advisor data is confirmed via regulatory databases, cross‐checks with securities firms and conversations with individual advisors. The formula Barron’s uses to rank advisors is proprietary. It has three major components: assets managed, revenue produced and quality of practice. Investment returns are not a component of the rankings because an advisor’s returns are dictated largely by the risk tolerance of clients. The quality of practice component includes an evaluation of each advisor’s regulatory record. The data is based on one fiscal year (7/1/22 - 6/30/23) and appeared in Barron’s on 9/18/23.


Schwab IMPACT Awards®

The Charles Schwab & Co., Inc.’s IMPACT Awards® program recognizes excellence in the business of independent financial advice. Nominees are evaluated and selected by a panel of prominent leaders from both the business world and the financial services industry. Mainstay Capital Management does use Charles Schwab to custody certain client assets, however there was no direct compensation provided to be nominated for this award. Mainstay Capital Management received this annual award on November 15, 2017.