Our Farther Focus team has worked with many employees of PG&E over the years. And with more than 26,000 people working at PG&E currently, many different situations can unfold when it comes to financial planning, and, more specifically, retirement planning. Our goal in this case study piece is to briefly capture three different types of planning circumstances surrounding PG&E employment — involuntary separation, voluntary retirement, and nearing retirement. Let's dive into the individual cases.
Case Study #1: Involuntary Separation
Name: John
Position: Senior Contract Analyst
Age: 57 Years Old
Years of Service: 37
Planning Focus: Involuntary Separation from PG&E in 2019
John qualified for retirement benefits when he was laid off from PG&E. As such, he was able to effectively retire with his severance. We recommended that since he was still considered young for a retiree, he pursue other employment opportunities. He eventually found a new position at the CPUC.
When it came to his pension, John chose to receive his pension as a joint annuity immediately following his separation from the company. Since he had more than 35 years of service he was qualified for his full pension regardless of his new employment status.
Case Study #2: Voluntary Retirement
Name: Phil
Position: Senior Lineworker
Age: 64 Years Old
Years of Service: 32
Planning Focus: Voluntary Retirement from PG&E in 2022
Phil qualified for retirement benefits and chose to retire. He considered retiring in either 2021 or 2022, and we provided consultations planning his cash flow, budget, and retirement timeline. Since union employees receive full pension and retirement benefits once they have 30 years of service, he had the freedom of choosing between the two dates. He was able to optimize by working through March. This allowed a final cost of living adjustment to fully factor into his paycheck – which also translates into increasing his pension payouts.
Once Phil retired, we provided support by managing his pension and 401K funds. On top of that, we helped guide him through each step of the retirement process:
1. Picking a date based on his cash flow situation
2. Submission of a resignation letter
3. Pension election packet submission
4. Special enrollment for Retiree Medical
5. Rollover of 401K funds through Fidelity
Case Study #3: Current PG&E Employee Nearing Retirement
Name: Sherry
Position: IT Senior Manager
Age: 64 Years Old
Years of Service: 27
Planning Focus: Currently Employed at PG&E
Sherry is a current employee at PG&E. She has plans to retire sometime in the next five years. She is fully eligible to retire with full pension and other benefits but she enjoys her work and is not quite ready to give it up. We provide ongoing consultations on picking dates and making sure she's making the most of her benefits. As a current employee of PG&E, she must keep the funds of her 401K at Fidelity. We provide management services on her 401K by rebalancing her funds and providing guidance on the after-tax rollover feature. This allows her to circumvent the salary and contribution limits to fund a Roth IRA each year she has spillover contributions.
Additionally, she had an inherited IRA from her father who also worked at PG&E. We provide management services on those funds, selecting investments and following required distribution guidelines.
