$21,000 Lump Sum Questions

The Briggs contract provides a $21,000 lump sum pension payment upon retirement for employees hired before 1980. There continues to be many questions about this payment. The payment is $21,000 payable to people who either give four months notice prior to retirement, or obtain a waiver of the four months notice from the company. The company will give the waiver if a suitable replacement has been found for the employee before the four months. With the number of people on layoff, the waiver is easy for most people to obtain. If you are on a job that requires substantial training, you may not be able to get the waiver.

The bonus is paid upon retirement. This means it normally is paid soon after the first check is paid. The bonus can be paid in three forms.

	The retiree may elect to take a cash payment. This may result in tax penalties if the retiree is under age 55 It is also subject to normal taxes.
	The retiree may elect to roll the payment into an IRA. This defers taxes on the payment and if left in the IRA until withdrawals are permitted, there will be no penalty.
	The retiree may elect to have the $21,000 paid as an annuity added to their pension. This will increase their pension by a set amount each month. The amount it will increase the pension will be different for every person based on their age and life expectancy at retirement.

In addition to the lump sum payment, the $21,000 is added to the employee's earnings in determining their pension payment. This will increase the multiplier by $3.675 for an employee above minimum.

An employee with 30 years of Credited Service, that was entitled to a pension higher than the minimum, before the $21,000 was added to their earnings, would see an increase of about $110 in monthly pension, before any adjustments for survivor options.