If you work for Pfizer, you likely have a generous compensation and benefits package. But do you understand what to do to make the most of what’s available to you?
Whether you’re a new employee, a mid-career professional, a manager, a leader, nearing retirement, or thinking of moving on, making the right moves now can help cement your future.
Today, we’ll talk about how to gain the most value from your Pfizer benefits and what moves to make today to ensure you receive all the compensation and benefits you’re entitled to.
First Things First: Get the Right Financial Guidance
Whichever Pfizer office you work in—and even if you primarily work remotely—Pfizer offers plenty of resources and support for employees looking to maximize their benefits. However, you may have questions or unique issues that would be better addressed by an independent third party, ideally a qualified financial advisor with experience in the pharmaceutical industry.
Case in point: if you’re thinking of quitting, changing jobs, going to another company, or preparing yourself for a corporate reorganization during which you fear you might lose your job, you probably don’t want to engage a Pfizer insider. If any of these scenarios apply to you, or if you’d like to discuss your benefits “off the record,” please set up a call with me today.
Saving for the Future: How to Maximize Your Pfizer Benefits
Pfizer’s benefits and incentives package is finely nuanced, so understanding what’s included in your package, the terminology, and the implications is critical. Here are a few examples.
- The PSP (Public Service Pension) has contribution limits, which are set during open enrollment. These limits can have a significant difference on the company’s matching contributions. If it’s not done correctly, contributions and company matches can be stopped prematurely. A financial advisor can help you calculate what you need to contribute to ensure you don’t lose out on the match and maximize the after-tax value.
- After tax contribution options for PSP. While you’re contributing to your PSP, think about whether you want to continue to grow your gains tax deferred. You can instead choose to convert it to a Roth – it’s as simple as calling the benefits department and requesting the change.
- TSRUs vs. PTUs. Employees and executives eligible for Total Shareholder Return Units (TSRU) may choose to convert their stock options into Performance Targeted Units (PTUs), also known as profit units. Employees who are 55 years old or older with at least 10 years of tenure in the company can convert their TSRU to PTU if they choose to do so. The either-or side of things is that, if you don’t convert, you’ll need to leverage the stock options according to the vesting schedule at retirement or convert to common stock. The PTU conversion is performance-based, so you’re banking on the company’s continued success, which can provide you with ongoing income in retirement. You would obviously want to choose the most tax-advantaged option, especially if retirement is on the near horizon.
So, should you convert? TSRUs will appreciate faster than PTUs in a rising market. If you think Pfizer’s share value will increase, it might make sense not to convert.
It is worth noting that taxes are withheld when you convert to PTUs. In a flat market, this will likely reduce the value of your investment by the applicable tax rate.
However, in down markets, TSRUs will lose value. If you feel that Pfizer stocks are headed that way, conversion might be the best option for you.
- PRAP Pension Plan (Pfizer Retirement Annuity Plan). The PRAP provides a lump sum to retiring employees, an amount that can be reduced if you take early retirement. The benefit is tied directly to years of service and career milestones, so it’s helpful to understand the implications and what benefits you’re eligible for should you retire early.
- Retiree Medical Savings (RMS) can significantly reduce healthcare costs in retirement if you play it right. For example, Pfizer has an excellent long-term care group policy that can supplement the RMS. Understanding your healthcare benefits can help to improve your quality of life and provide peace of mind for you and your family.
Is it Time to Move On? Consider This Before You Quit
Before you leave your job, be sure to change all your contact information with insurers. You would have been signed up with a company email, so when that account is retired after you leave, you don’t want to miss any critical communications.
Additionally, it’s helpful to understand what you’re leaving behind so you can compare it to what your new employer is offering. Doing so may help you negotiate a better deal or weigh multiple offers.
Think about how much your pension will be reduced because of your age, your vesting schedule, what incentives are still forthcoming, and how leaving before you hit those milestones will affect your income. No matter your reason for leaving, it’s essential to understand what you’re leaving behind. If it’s to your advantage to wait for a particular date, you might want to think about that.
From Salary to Savings: Considerations for Retiring Pfizer Employees
From a financial perspective, the future often arrives quite suddenly. You go from being a high earner to a spender, and the nest egg you’ve built up over the years needs to cover your expenses, emergency fund, and future needs. With a bit of planning and forethought, the transition won’t be as jarring!
A financial advisor can help you establish a plan that enables you to accomplish your goals in retirement and ensures your money won’t disappear before you do. The formula isn’t the same for all people—after all, everyone has different dreams, circumstances, and mindsets.
Even if you’ve successfully managed your finances on your own thus far, a qualified pharma financial advisor can make all the difference in planning for the future. We understand the economic significance of Pfizer’s milestones and how you can leverage them now to your future advantage.
While Pfizer’s benefits and compensation packages can be complex, we’ll help you make sense of it all and guide you to the most appropriate decisions for you.
Schedule a call with me.
It's quick, easy, and can make all the difference in your future.
LPL Financial and Randal DeFillippis are not affiliated with Pfizer.