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Choosing a Lump-Sum Payment Option

You decide how you want your pension benefit paid to you—as monthly payments or a lump-sum payment. Here is your lump-sum payment option choice.

 Pension Payment Options
Lump-Sum Cash Payment

Available to everyone

How Long Benefits Are Paid

  • You receive a single cash payment of your entire benefit. No other benefits are payable under the Plan after you receive the payment.
  • The single cash payment is equal to the present value of your monthly payments, which are determined by the interest rates released each August and mortality table in effect at the time you receive the benefit.
  • You can defer paying taxes on your lump-sum payment by directly rolling it over to an IRA or other eligible employer’s retirement plan. If you don’t directly roll over your payment, then you have 60 days to roll it over.

NOTE: If you don’t directly roll over your lump-sum payment, the IRS requires that 20% automatically be withheld and you will have to pay additional income taxes at tax filing time if the 20% withholding amount is not enough. If you are under age 59½, early withdrawal taxes may apply. Your payment is also subject to state and local income taxes where applicable. Some states, such as Ohio, require automatic state tax withholding, and you may be required to pay additional taxes at tax filing time if the amount withheld is not enough.

Why Choose It

  • You feel comfortable investing the lump-sum value of your pension benefit so that you can provide yourself with a steady stream of lifetime income.
  • You do not want to receive monthly benefit payments for life.
  • You may have the opportunity to pass any remaining amount of your lump-sum payment to your heirs upon your death.

NOTE: If you’re married when payments begin, you may be required to submit spousal consent to choose this payment option.

Still Have Questions?

What to Do After You Leave the Company: If You Elect a Lump-Sum Cash Payment

Your entire pension benefit will be paid to you after you leave the Company, and there is nothing further you need to do when it comes to your pension benefit, unless you move during the same year your benefit is paid to you. In that case, you will need to inform the RASC of your new address so that the appropriate tax forms may be sent to you.

Seek Financial Advice for Retirement

You have some important choices to make before you retire. Trusted investment advisors, tax specialists or attorneys can help you make decisions that are best for you and your financial situation. To give your financial advisors a better idea of the retirement benefits you get from Rockwell Automation, it’s a good idea to share your important benefits-related documents with them, such as:

  • The Summary Plan Descriptions (SPDs) for your retirement benefits (Pension Plan, Retirement Savings Plan and Retiree Medical)
  • Your most recent benefits statements (Pension Plan benefit estimate from Your BenefitsTM or the RASC and Retirement Savings Plan account statements from Fidelity)
  • Your beneficiary designations (from Your BenefitsTM and Fidelity)

You can download copies of your SPDs and Your Guide to a Hassle-Free Retirement by going to Your BenefitsTM, or you can request copies be sent to you by calling the RASC.