Top Pension Questions for GSK Employees
These are the most frequently asked questions for GSK employees from our weekly webinars.
Question 1: What steps should GSK employees take to prepare for their retirement benefits under the GSK Cash Balance Pension Plan, and how do the options differ for those who joined GSK before versus after January 1, 2020?
Answer: Preparing for the GSK Cash Balance Pension Plan: Employees who joined GSK before January 1, 2020, are eligible for the GSK Cash Balance Pension Plan, which allows them to take distributions as a lump sum or annuity. Employees who joined after January 1, 2020, are not eligible for this plan. Employees should contact the GSK Benefits Center to run pension estimates and decide how they want to receive payments. For detailed options, it's advised to request an estimate 45-90 days before commencing the pension(GSK_2024_US_Total_Rewar…).
Question 2: How can GSK employees effectively evaluate the pros and cons of the annuity versus lump sum payout options available to them upon retirement? What should be considered in terms of tax implications and financial planning?
Answer: Evaluating Annuity vs. Lump Sum Payout: GSK employees can opt for either an annuity, which provides lifelong monthly payments, or a lump sum, which offers a single payment that can be rolled over into an IRA. The key considerations include personal financial goals, tax implications, and the need for guaranteed income over time versus control over a large sum. A financial advisor should be consulted to weigh the benefits and risks(GSK_2024_US_Total_Rewar…).
Question 3: In what ways do GSK's post-employment health benefits, particularly the health reimbursement account (HRA) and COBRA options, differ for employees who are Medicare eligible versus those who are not?
Answer: Post-Employment Health Benefits and Medicare: GSK employees who are Medicare-eligible have the option to enroll in the GSK Retiree Medicare HRA Plan. Those not eligible for Medicare can elect COBRA continuation coverage for up to 18 months. Employees should ensure they enroll in Medicare to avoid gaps in coverage and penalties(GSK_2024_US_Total_Rewar…)(GSK_2024_US_Total_Rewar…).
Question 4: How do GSK employees ensure they maintain access to their retirement benefits and important information on post-employment medical coverage after they leave the company? What are the benefits of the GSK Benefits Center?
Answer: Accessing Retirement Benefits Information: GSK employees can access their retirement and post-employment medical benefits through the GSK Benefits Center portal. The Benefits Center allows them to review their retirement plan, update beneficiaries, and explore tools for financial planning. It's important to keep contact information updated to ensure continued access(GSK_2024_US_Total_Rewar…).
Question 5: What criteria must GSK employees meet to qualify for retiree health benefits, and how does this integrate with Medicare enrollment to avoid financial penalties?
Answer: Qualifying for Retiree Health Benefits: To qualify for GSK retiree health benefits, employees must be at least 55 years old with 10 years of eligible service. It's essential to coordinate these benefits with Medicare enrollment to avoid penalties. Employees must enroll in Medicare Parts A and B once eligible to ensure seamless integration with their GSK retiree health benefits(GSK_2024_US_Total_Rewar…)(GSK_2024_US_Total_Rewar…).
Question 6: How should GSK employees approach the needs for their dependents when they terminate employment? What changes occur to their health benefits and medical coverage options provided by GSK?
Answer: Considering Dependent Health Benefits: Upon termination, GSK employees' health benefits will change, especially for dependents. Dependents can continue coverage under COBRA or may be added to GSK retiree health benefits if eligible. If dependents are not covered when an employee leaves GSK, they can only be added later due to qualified status changes(GSK_2024_US_Total_Rewar…).
Question 7: What are the implications of the IRS regulations regarding unused pre-tax balances for GSK employees participating in a Health Savings Account (HSA)? How does this affect retirement planning?
Answer: IRS Regulations on Health Savings Accounts (HSAs): Unused pre-tax balances in an HSA remain with the employee upon termination. However, the IRS may impose rules on contributions and distributions. It is important for GSK employees to understand these regulations when planning their retirement to avoid penalties(GSK_2024_US_Total_Rewar…).
Question 8: How can GSK employees contact the GSK Benefits Center to obtain detailed information regarding their retirement and health benefits, and what specific questions should they prepare in advance?
Answer: Contacting the GSK Benefits Center: GSK employees can contact the Benefits Center by phone or online to obtain detailed information about their retirement and health benefits. It's recommended to prepare questions in advance, such as those related to pension estimates, 401(k) distributions, and healthcare coverage options(GSK_2024_US_Total_Rewar…).
Question 9: What processes are in place for GSK employees to manage their 401(k) accounts post-employment, including understanding the different distribution options and maintaining investment strategies?
Answer: Managing 401(k) Accounts Post-Employment: Employees have several distribution options for their 401(k) accounts post-employment, including leaving the balance in the plan, taking partial distributions, or rolling the funds into an IRA. Investment strategies can be maintained through the GSK Benefits Center, which offers financial planning tools(GSK_2024_US_Total_Rewar…).
Question 10: For GSK employees facing retirement, what crucial resources are available through the GSK Benefits Center to assist with financial planning and retirement decisions, and how can they maximize these tools effectively?
Answer: Resources for Retirement Planning: GSK offers multiple resources through its Benefits Center to assist employees with retirement planning, such as the Financial Health tool, Alight Financial Advisors, and the EY Financial Planner Line. These resources help employees maximize their retirement funds and make informed financial decisions(GSK_2024_US_Total_Rewar…)(GSK_2024_US_Total_Rewar…).
Question 11: How does GSK ensure that its pension plan remains competitive and beneficial for its employees, particularly in light of changes to pension regulations and investment strategies that may arise in the coming years?
Answer: GSK ensures that its pension plan remains competitive by offering a defined contribution (DC) plan that allows both GSK and employees to contribute, with flexible options to save more. They monitor investment performance through external providers like Legal & General and offer employees the ability to adjust their contributions or investment strategies based on their retirement goals. GSK periodically reviews these plans to remain compliant with regulatory changes and adapt to market conditions(GSK_Pension_Plan_Bookle…).
Question 12: What options does GSK provide to employees for managing their pension contributions, and how does this flexibility influence retirement planning?
Answer: GSK offers flexibility in pension contributions through core, matching, and additional voluntary contributions (AVCs). Employees must contribute 2% of their pensionable pay, while GSK contributes 7%. Employees can further boost their contributions with matching contributions up to 5% and AVCs beyond that. These options provide employees with varying levels of flexibility in managing their retirement savings(GSK_Pension_Plan_Bookle…).
Question 13: In what ways can employees at GSK leverage their annual bonus to enhance their retirement savings without incurring additional tax burdens?
Answer: GSK employees can enhance their retirement savings by contributing part or all of their annual bonus into the pension plan, saving on income tax and National Insurance. This bonus exchange system allows employees to maximize the value of their bonus, further boosting their retirement funds without additional tax burdens(GSK_Pension_Plan_Bookle…).
Question 14: How does GSK support employees who are considering transferring their pensions from previous employers into the GSK Pension Plan?
Answer: GSK supports employees who want to transfer their pensions from previous employers by offering the option to transfer pension benefits into the GSK Pension Plan. Employees are advised to carefully evaluate whether the transfer will benefit them, as GSK’s plan may operate differently from their previous one. The process is initiated by contacting the plan administrator(GSK_Pension_Plan_Bookle…).
Question 15: What are the implications of the Lifetime Allowance and Annual Allowance changes announced for the 2024 tax year on GSK employees' pension contributions and overall retirement savings?
Answer: Changes to the Lifetime Allowance and Annual Allowance for the 2024 tax year could affect GSK employees' pension contributions. While the Lifetime Allowance charge will be abolished, the Annual Allowance remains at £60,000, and high earners may face reductions in tax relief. Employees should assess how these limits impact their retirement planning(GSK_Pension_Plan_Bookle…).
Question 16: How does GSK's Lifecycle investment strategy adapt investment options for employees nearing retirement, and what should employees know about the timing and allocation of their retirement savings?
Answer: GSK’s Lifecycle investment strategy gradually transitions employees' pension investments from growth-focused funds to lower-risk options as they near retirement. This strategy is designed to protect employees’ accumulated savings by adjusting investments based on their retirement horizon, allowing for smoother transitions into retirement(GSK_Pension_Plan_Bookle…).
Question 17: What resources does GSK offer to employees in terms of financial education and planning to ensure they make informed choices about their pension fund investments?
Answer: GSK offers a variety of resources to help employees with financial planning, including access to the pension plan’s website, where they can monitor their contributions, adjust their investment strategy, and use tools to forecast their pension. Employees are also encouraged to seek independent financial advice for tailored guidance(GSK_Pension_Plan_Bookle…).
Question 18: How can employees at GSK determine the right balance between risk and stability in their investment choices as they approach retirement?
Answer: Employees at GSK can balance risk and stability by choosing from different investment options within the GSK Pension Plan. The Lifecycle approach helps reduce exposure to stock market volatility as retirement approaches, while more risk-averse employees can opt for safer investments like bonds and cash funds(GSK_Pension_Plan_Bookle…).
Question 19: How does GSK accommodate employees with unique needs, such as those opting for part-time work or taking extended leave, in relation to their pension contributions?
Answer: GSK accommodates employees who take extended leave or work part-time by continuing core contributions (7%) during unpaid leave. Employees can make up missed contributions upon returning to work, and GSK will match these additional contributions, ensuring minimal disruption to their pension savings(GSK_Pension_Plan_Bookle…).
Question 20: What is the best way for GSK employees to contact the company with specific questions regarding their pension plans or retirement benefits?
Answer: GSK employees can contact GSK People Services for pension plan inquiries through phone numbers listed in the GSK Pension Plan booklet or access information through the Total Reward Online portal, which allows for easy management of contributions and investments(GSK_Pension_Plan_Bookle…).