Life Insurance For Ibm Retirees: What's The Deal?

IBM has been criticised for its handling of retiree benefits, with some former employees calling its decision to offload 100,000 pension plans an outright attack and a heist. In 2022, IBM sold some of its pension obligations to Prudential and MetLife, transitioned medical coverage for Medicare-eligible retirees to a new IBM-sponsored Group Medicare Advantage program, and reworked its 401(k) plan. These changes have left some retirees footing the bill for medical expenses, with one former employee stating that they had to draw from their personal accounts to make required premiums and prescription copays. IBM also offers a retiree life insurance policy with a value of $5000.

IBM retiree life insurance policy

IBM offers a range of benefits to its current and former employees, including retirees. These benefits are designed to provide support and enhance the well-being of IBMers throughout their lives. One of the key benefits for retirees is the IBM Retiree Medical Plan, which provides healthcare coverage. In 2023, IBM transitioned this plan for Medicare-eligible participants to a new IBM-sponsored Group Medicare Advantage program administered by UnitedHealthcare. This new program offers simplified plan options, broad drug coverage, and access to any Medicare provider that accepts the plan.

In addition to healthcare benefits, IBM also provides a retiree life insurance policy. This policy is available to retirees through the IBM Group Life Insurance Plan. According to sources, the value of this life insurance benefit is likely to be $5000. This is mentioned in the "About Your Benefits: Post Employment" booklet provided by IBM.

The life insurance benefit is just one component of IBM's comprehensive benefits program for retirees. IBM also offers pension plans, such as the IBM Personal Pension Plan, which provides ongoing pension payments to participants and beneficiaries. IBM has recently made updates to its benefits program, including transferring some pension obligations to insurance companies like Prudential and MetLife to ensure guaranteed payments.

It is important to note that benefit offerings may vary based on location and eligibility criteria. IBMers and retirees are encouraged to refer to the official IBM benefits resources and seek clarification from the IBM Benefits Center for the most up-to-date and accurate information regarding their specific benefits package.

While IBM strives to provide valuable benefits to its retirees, there have been instances of dissatisfaction among former employees. Some retirees have expressed frustration with changes to their healthcare benefits and pension plans, feeling that their freedom to select benefits for their families has been restricted. These changes have resulted in some retirees having to pay for medical expenses out of their own pockets, at least temporarily, until new plans and funds become accessible.

IBM retiree medical plan

IBM has recently made changes to its benefits program for current and former employees, including updates to its retiree medical plan. The IBM Retiree Medical Plan is designed to provide healthcare coverage for retired employees who are Medicare-eligible. Starting on January 1, 2023, IBM transitioned coverage under this plan to a new IBM-sponsored Group Medicare Advantage program administered by UnitedHealthcare.

This new program offers two plan options specifically designed for IBM: the Enhanced Plan and the Essential Plan. These plans provide broad protection and unique features not available through individual plans. For example, participants will have access to any Medicare provider that accepts the plan, as well as broad drug coverage. Additionally, the new program includes a zero-premium option, meaning participants will see no change or a reduction in the amount paid monthly for healthcare premiums.

The transition to the new Group Medicare Advantage program has been met with mixed reactions from retirees. While it offers simplified plan options and enhanced benefits, some retirees have expressed anger and disappointment over the loss of freedom to select their benefit providers. There have also been concerns about the potential loss of savings accounts used for medical expenses if they do not switch to one of the new plans.

IBM's retiree medical plan is just one component of its comprehensive benefits program for former employees. The company also offers pension plans, 401(k) plans, and life insurance options to ensure the financial security and wellbeing of its retirees. IBM continuously evaluates and updates its benefits offerings to streamline administration and provide enhanced options for its retired employees.

IBM pension plans

IBM offers pension plans to its employees, but the specifics of these plans are not consistent. Some employees have complained about the company's changes to its pension and healthcare plans. In 2022, IBM sold some of its pension obligations to Prudential and MetLife, affecting 100,000 retirees. The company also transitioned medical coverage for Medicare-eligible retirees to a new IBM-sponsored Group Medicare Advantage program administered by UnitedHealthcare, starting on January 1, 2023. This transition caused issues for retirees, who were forced to pay for some medical expenses out of their own pockets due to delays in transferring funds to the new system.

IBM offers a pension plan called the IBM Personal Pension Plan. This plan was the subject of a lawsuit in 2022, alleging that it relies on outdated mortality tables to value annuity payments, resulting in married retirees receiving less than they should under the law. As of January 1, 2023, Prudential and MetLife took over the obligation to pay benefits to some participants and beneficiaries in this plan.

IBM also offers a retiree medical plan for Medicare-eligible participants, which includes two plan options: the Enhanced Plan and the Essential Plan. These plans are designed exclusively for IBM retirees eligible for Medicare and are administered by UnitedHealthcare. IBM states that these plans provide broad protection and unique features not available through individual plans.

In addition to pension and medical benefits, IBM offers a range of other benefits to its employees, including a 401(k) plan, health savings accounts (HSA), flexible spending accounts (FSA), disability insurance, supplemental life insurance, accidental death and dismemberment insurance, and occupational accident insurance. However, the specifics of these benefits can vary, and some employees have expressed dissatisfaction with the changes and limitations to their benefits.

IBM 401(k) plans

IBM offers a 401(k) Plus Plan through Fidelity, covering 179,859 employees. The plan is available to US-based employees. IBM used to match the first 5% of salary that employees contributed to their 401(k) accounts, dollar for dollar. However, as of 2024, this policy has been replaced by a "Retirement Benefit Account" (RBA). The RBA is a defined-benefit plan that vests after one year and is portable, meaning it stays with employees if they leave IBM. The RBA will receive 5% of employee salaries, earning a fixed interest rate of 6% for the next three years.

If you no longer work for IBM and have a 401(k) plan through Fidelity, you have a few options:

• Leave it with Fidelity
• Roll it over into an individual retirement account (IRA)
• Roll it over into a new 401(k)
• Withdraw the funds (may incur tax penalties)

If you choose to roll over your 401(k) into an IRA, you can follow these three steps:

• Confirm key details about your Fidelity 401(k) plan
• Decide which IRA you want to move your Fidelity 401(k) to
• Initiate your rollover with Fidelity

If you choose to withdraw your 401(k), you can follow these steps:

• Determine how much of your IBM 401(k) you want to cash out
• Contact your IBM 401(k) plan administrator
• Request that your account be liquidated in the amount you choose
• Receive the cash-out amount via paper check or ACH transfer

It is important to note that withdrawing your 401(k) should typically be reserved for emergency circumstances, as it can come with significant tax implications and penalties that may impact your retirement savings growth.

IBM's handling of healthcare funding

One of the main points of contention is IBM's decision to withhold retiree health reimbursement arrangement (HRA) funds from those who did not switch to UnitedHealthcare's privatized version of Medicare. This has resulted in some retirees being locked out of healthcare subsidies and having to pay for medical expenses out of their own pockets. There have been issues with the transition of these funds, with some retirees reporting delays in accessing their HRA accounts and being forced to draw from their personal savings to cover medical costs.

IBM has also been accused of shortchanging pensioners in a separate lawsuit, Knight v. International Business Machines Corporation, et al. The lawsuit alleges that the IBM Personal Pension Plan uses outdated mortality tables to value annuity payments, resulting in married retirees receiving less than they should under the law.

In response to the changes in benefits, one retiree, Steve Bergeron, launched a petition on Change.org, which has garnered over 600 signatures. Bergeron and other retirees feel that IBM is not keeping its promises and that the changes are depleting their savings accounts. Despite the backlash, IBM has not commented on the situation.

While IBM has stated that the changes to its benefits program are intended to streamline offerings and provide enhanced options for active and retired employees, the transition process has been challenging for some retirees, raising concerns about the accessibility and adequacy of their healthcare funding.

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