On October 8, 2009, Ford announced it was terminating its relationship with Fidelity to administer the Savings and Stock Investment Plan (SSIP) and Ford Retirement Plan (FRP) and transferring the administrative services to ACS. ACS is a large well established benefits company (in the process of being bought by Xerox). A lot of folks we know really like Fidelity, so now they have one more decision to consider.
Brian and I think there are some pretty important questions a Ford Retiree needs to consider before the end of 2009:
- If I’m in the SSIP, should I rollover to an IRA to stay at Fidelity? (This one has an age-based answer, depending on whether you’re under age 59 ½)
- Should I rollover the SSIP and go elsewhere? (ACS is offering the same investment options as Fidelity, so this question is independent of who administers it)
- Should I consider a Roth conversion on part or all of the SSIP in 2009? (Now, in my opinion, this is a much more important issue. Do you have after-tax funds? Income under $100K? Big savings possible)
- Should I consider a Roth conversion on part or all of the SSIP in 2010? (2010 eliminates the income limitation on Roth conversions. We believe the conversion is a great future opportunity; the trick is to stay in the same effective tax bracket)
- What do I do with any Ford stock in the SSIP? (You can take Ford stock out of the SSIP at the lower of cost [what you paid], or current market value. All appreciation after withdrawal is long-term capital gain. If you think Ford shares are going to appreciate, you could convert what would have been ordinary income [if you left it in the SSIP] into long-term capital gains, which may be taxable at a lower rate.