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Fidelity?
Old 06-01-2015, 09:39 AM   #1
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Fidelity?

Fidelity. Yuck. I just spent 45 minutes and 5 different representatives to try to get a simple answer about a prior employer pension fund and how my lump sum is calculated.

5 basic morons - none could tell me how it's calculated nor the impact of rising rates to the lump sum amount. And a week to get their "guidance department" to call me with more details.

It can't be that difficult. It's like a bond essentially right ? And the lump sum is like the current value of the bond.

And When rates rise the lump sum will be smaller ...but the monthly annuitized payouts will be greater ...

I am told there are 3 interest rate tiers but no idea how those determine a pension lump sum ... There has to be a simple excel formula to explain it in plain and simple terms.

Eg- If interest rates go up 0.25 percent, the lump sum falls by how much. The monthly payments rise by how much. Etc

I am not impressed with fidelity and this mornings call convinced me to eject from their grip as quickly as possible. They are good at rolling over pensions to their own IRAs but that's about all anyone wanted to discuss with me. Zero technical finance ability. Zero.

Venting here. Sorry for the rant.
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Old 06-01-2015, 10:09 AM   #2
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EVERY firm is super-efficient moving a rollover from a previous employer or another brokerage into a new account!


I've had an account at Fidelity for years and family members even have a managed account (all have the same advisor) and are happy with them. A pension is NOT as simple as a bond; its value includes a mortality component so there are built-in assumptions about how long you'll live as well as survivor mortality if you have a survivor benefit. There are dozens of mortality tables out there and Fidelity may not have the information they need to make those calculations. Your previous employer may even change their interest rate assumptions or incorporate a new mortality table. All of those will affect values and payouts.


Is there any way you can get this information straight from your previous employer?
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Old 06-01-2015, 10:41 AM   #3
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I'm with TRPrice but had to deal w/Fido while managing my uncle's estate.

1) Did NOT like having to stand at a lobby counter while having another customer standing next to me just two feet away. I'm having to talk out loud about several millions of dollars while the next guy is depositing $200, able to hear everything. Take me to a conference room!!

2) They screwed up several transactions resulting in embarrassing large check returns from charitable distributions. They admitted their oversight.

2a) Re: above, they had TWO "check and balance" procedures fail. (I'll spare you the details).

It amazes me that these people handle much/most of the country's investments but messed up so badly.

Sadly, I still have residual $$ there which was part of my share of inheritance. It was just easier to keep it there...(another long story). At this point, it's ok because the transactions are now minimal.
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Old 06-01-2015, 10:42 AM   #4
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I'm confused. Why would you expect Fidelity (or any other broker), to know about a "prior employer pension fund and how my lump sum is calculated"? Wouldn't you need to ask the prior employer?

I've got a pension from a prior employer - I don't expect my brokers to know anything about it.

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Old 06-01-2015, 10:54 AM   #5
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It can't be that difficult. It's like a bond essentially right ? And the lump sum is like the current value of the bond.
I assure you, it IS that difficult. I am in this line of work, and the discussions around mortality, assumptions, etc., never end. New mortality tables were rolled out in November, and the flurry of activity that ensued was unbelievable. I doubt if there is any one person who could accurately explain this to you, other than the actuary who actually works on this plan. And I'm not sure anyone every really understands anything an actuary says. I'm related to lots of engineers, and even they think actuarial science trumps anything they ever had to learn about math.

There are companies that make billions each year telling companies how to set their assumptions and mortality rates. This is way over the heads of anyone who answers the phones at Fidelity.

I'm sorry you're frustrated, but personally I understand why you can't get an answer. Ask your prior company to tell you who their actuarial firm is and call them and then be prepared to be transferred 26 times before you get to the right person. Every once in a while they get a call like this, and they bill the client for it, which comes straight out of the pension pot.
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Old 06-01-2015, 10:57 AM   #6
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Been with FIDO for over twenty years and had nothing but excellent service. I have rolled over a pension lump sum as well as a 401K which was pretty seamless. BTW, I did know my pension lump sum and how it was calculated through the HR department of my employer at the time.

As a previous poster pointed out you may be checking with the wrong source.
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Old 06-01-2015, 10:58 AM   #7
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Quite surprising to me that you would expect a brokerage to know about a prio pension fund. That question should be directed to the administrator. additionally, the "Summary Plan Description" shuld tell you how the lump sum and benefit are calculated. I'm not certain why you think current prevailing interest rates will impact your lump sum payment. In my experience the lump sum is the value you have in the plan established by the previously applied interest rate and the supsequent value you hold in the plan. Unless they are trying to terminate the plan.
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Old 06-01-2015, 11:49 AM   #8
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All my pension documents contain the following statement: "For details on the calculation of your benefit, please refer to your Summary Program Description available from the Human Resources Department of the employer."
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Old 06-01-2015, 11:53 AM   #9
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Not sure why you believe this is an issue with Fidelity. You'd get equally frustrated calling any brokerage. As pointed out you're barking up the wrong tree. Best wishes.

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Old 06-01-2015, 12:20 PM   #10
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Originally Posted by MRG View Post
Not sure why you believe this is an issue with Fidelity. You'd get equally frustrated calling any brokerage. As pointed out you're barking up the wrong tree. Best wishes.

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Old 06-01-2015, 12:22 PM   #11
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Like others have mentioned, calculating lump sum isn't straight forward. I looked into this a couple months ago and decided it wasn't worth the effort. To investigate questions like "how much would my lump sum change if the interest rate when up x%", I instead used the web site link here -->
https://www.pensionbenefits.com/calc...06_lumpsum_cal
It got me answers close enough for my needs but did not match my HR lump sum calculations exactly.
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Old 06-01-2015, 12:52 PM   #12
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I doubt if there is any one person who could accurately explain this to you, other than the actuary who actually works on this plan. And I'm not sure anyone every really understands anything an actuary says.
But I TRY to explain things in everyday English!

J/K- I'm a property-casualty actuary so this isn't my area of expertise.
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Old 06-01-2015, 01:34 PM   #13
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I've always had good service from Fido at the local brick and mortar location, but Fidelity drove me to distraction over the execution of a QDRO. They felt that it was not necessary to show their calculations, only to give me a final number. When I commented that I got a better itemization at McDonalds, they relented and shared their line by line calculations, which turned out to be done properly.
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Old 06-01-2015, 01:35 PM   #14
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The folks staffing the front desk of any brokerage are there to process routine matters. I have never had a problem making an appointment with a Fidelity representative for a private conversation.
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Old 06-01-2015, 02:25 PM   #15
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For all you folks that keep saying they are just a broker.... well, that is wrong... they manage many companies 401(k) and retirement plans... very much different than a broker....


As to the OP.... the problem can come if the plan was not a standard Fidelity plan.... my old small company used a standard plan and they were able to answer all questions... but if the company set it up themselves it could be almost anything... however, they should know who is the person you need to talk to and direct your call to them... if they are there that is....
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Old 06-01-2015, 02:37 PM   #16
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Originally Posted by Texas Proud View Post
For all you folks that keep saying they are just a broker.... well, that is wrong... they manage many companies 401(k) and retirement plans... very much different than a broker....


As to the OP.... the problem can come if the plan was not a standard Fidelity plan.... my old small company used a standard plan and they were able to answer all questions... but if the company set it up themselves it could be almost anything... however, they should know who is the person you need to talk to and direct your call to them... if they are there that is....
You are right, it is possible that Fidelity is truly managing the plan. In which case they should be able to answer the question. Fidelity is many times the custodian of a company's retirement plan: They don't actually manage it, they are not the administrator, they just hold the money and are the record keeper.
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Old 06-01-2015, 04:26 PM   #17
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Seems to me when you left your prior company you should have known or investigated how their pension plan would work for you, no? I would contact the former companies pension department and ask the question.
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Old 06-01-2015, 05:01 PM   #18
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28 years with fidelity and not one gripe
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Old 06-01-2015, 05:06 PM   #19
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you know fido gets into lots of stuff... including retirement plans. That said... 401ks are under netbenefits (I think)... so they likely have another org other than the retail brokerage people to deal with this. One would hope they would be able to find the right group.
The OP may be right that Fido is the right place to go for the information. Or maybe not. We do not have enough info to figure that out.

I know when I use to deal with fido 401ks.. it was a different group than the brokerage people that I had to deal with.

so... I would suggest the OP work on determining either the right group in fido to deal with this, or does he need to deal with the ex-employer or someone else. This really depends on how this was set up.
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Old 06-01-2015, 05:31 PM   #20
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I am with OP....I do not like Fidelity.

Especially if better choices are available.. with companies that value their customers.
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