Collect Your Pension, the newly-created section of Fidelity’s participant Web site NetBenefits, allows workplace pension plan participants to initiate their pension payments in three steps:
- Step 1: Choose Your Payment Option(s): Participants are informed of the payment options available with their particular pension plan. Using a modeling tool, individuals can view different payment scenarios based on their retirement date and beneficiary choices.
- Step 2: Decide Where You Want the Money to Go: Plan participants selecting a form of annuity are prompted to enter tax withholding information and bank account information that is immediately validated for entry error. If selecting lump sums, they are given the option of taking a taxable distribution or rolling the money into a tax-protected account, such as an IRA or qualified retirement plan such as a 401(k).
- Step 3: Confirm and Sign Your Documents: A new eSignature capability enables eligiblepre-retirees to sign their documents electronically and submit. Individuals can monitor how their pension initiation is progressing (when they will receive their first check) and continue to use NetBenefits to track their ongoing payment status online.
According to a press release, the new service is available to Fidelity record-kept corporate pension plans nationwide. The materials offered include a five-minute instructional video, an article “How to Take a Pension Payout,” a checklist “Initiating Your Pension,” and links to pension calculators and a retirement income planning tool. These and other tools offered outline the basics of pension payments, explain some of the advantages and consequences associated with each payment type, and explore common concerns participants might have about this process.
Those wanting to take a lump-sum distribution are offered additional help from a specially trained representative who can help retirees develop a retirement income strategy and determine whether a lump-sum payment is the right option.
“With almost 3 million Baby Boomers turning 65 this year, many Americans are contemplating retirement and seriously examining their pensions for the first time,” said Wendy Foster, senior vice president at Fidelity Investments, in the announcement. “Some are unclear which payment option best suits their needs. They may not realize that the decisions they make are irrevocable or that some employers allow the pension initiation process to begin six months in advance of retirement.”
For more information about Fidelity Investments, visit www.fidelity.com.