If you will be affected, it is most important to note that the American Red Cross has pledged that “there will be no changes to the gross amount or timing of your monthly pension payment.” If you do not receive a letter from the Red Cross, your benefit will continue to be paid in the same way.
It is also important that you read the materials carefully, respond to any requests, and make use of the phone numbers and email addresses provided as needed. If you get help from a family member or other advisor with your financial business, get the materials in front of them promptly.
We’d urge benefit recipients to note:
Why the Changes?
As indicated in the letters, Red Cross has concluded that purchasing the new annuity contract and changing the way in which the existing annuity contracts pay other pension recipients is the best way to secure pension benefits for current recipients, maintain a healthy plan for future retirees, and focus financial resources on the mission.
Insurance company annuities are common and typically sound, but as with any major financial institution, there are always pros and cons to be found. In our preliminary research, however, we have found that insurance companies which hold the pension obligations for organizations like the ARC have excellent track records. For example, although many may be unaware, retirees who have been receiving pension benefits and were employed in 1989 or earlier are receiving a portion of their benefit from John Hancock or Aetna, paid through the ARC.
ARCRA Support Going Forward
Regardless of the source of your pension benefit, ARCRA will continue to advocate for all Red Cross retirees and educate our members on important and relevant issues. Given the impending changes, our research and education efforts will now include pensions backed by annuity contracts and the State Guaranty Associations which insure them and be communicated through our monthly eNewsletters, print newsletter The Retiree, and website. In addition, we’ll continue to help retirees to stay connected. Our ability to continue this work depends on the continued support of our members.
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