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Key Questions for WestRock Employees to Explore When Evaluating an Early Retirement Package

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Healthcare Provider Update: Healthcare Provider for WestRock: WestRock employees typically receive their health care benefits through various providers as part of employer-sponsored insurance plans. Specific details on the primary healthcare provider may vary, but it's known that large companies like WestRock often collaborate with major insurers. To identify the exact provider, employees should consult their HR department, which can provide the most accurate and relevant information. Potential Healthcare Cost Increases in 2026: As WestRock prepares for 2026, employees should brace for significant healthcare cost increases. With the expiration of enhanced federal ACA subsidies and rising medical costs, many workers could face steep premium hikes, potentially exceeding 75%. A recent survey indicates that nearly half of large employers, including WestRock, anticipate transferring more healthcare expenses to employees, raising deductibles and out-of-pocket maximums. This evolving landscape highlights the importance for WestRock employees to understand their benefits and mitigate potential financial impacts. Click here to learn more

With the economic downturn and recession looming, companies across various industries are facing an uncertain future. We have been planning with WestRock client's retirement for decades, and when an offer comes along, you typically don’t much time to act on it. Many give only 2 weeks to 30 days to make a decision. Many organizations are being forced to cut expenses to stay afloat, and unfortunately, that means workforce cuts in the form of furloughs, payroll reductions and forced layoffs. 

You have spent decades planning for retirement. Just when you think you have everything figured out and a concrete retirement plan in place, you’re thrown a curveball. WestRock has offered you an early retirement or voluntary separation package.

You were planning on retiring in a few years. Now what?

If you’ve received an early retirement offer, accepting it doesn’t mean you must retire from the workforce altogether. It just means that you can no longer work for WestRock. If you think you may be getting an early retirement package, here are questions to consider as you review your offer. 

What is an early retirement offer?

Does it include health benefits?

How does it affect my retirement assets?

How does it impact social security benefits?

What if I don’t want to retire, or can’t afford to?

Can I negotiate my offer?

What if I don’t accept my early retirement offer?

What is An Early Retirement Offer?

Early retirement packages, also known as retirement buyouts, are generally offered to employees who may be approaching retirement age, usually in a company’s efforts to reduce its overall costs. 

These packages may include perks in addition to standard severance benefits. For example, an employer may offer an extended salary continuation, a lump sum, payment of healthcare benefits or additional years of service to help employees reach the required time needed to collect a pension.

Some employers may even pay for career counseling or placement services to help you find your next job (if you want or need to keep working), but that benefit may be limited in the current environment.

Does my retirement offer include health benefits?

Health care has become one of the largest expenses for a retiree, even with good insurance. For many, a company’s contribution to your family’s health insurance premium is critical to keeping medical insurance and care affordable.

If you are lucky, your voluntary severance package will extend your health benefits. Companies may include health insurance benefits for a period of time in an early retirement package, but this varies by employer. If your offer from WestRock includes medical coverage, make sure you understand how long you’re covered for and to what extent. If health benefits aren’t part of your initial offer, consider negotiating for any crucial coverage and premium benefits. Health insurance will be needed until you are age 65 and become eligible for Medicare. However, not all those offered an early retirement package are so lucky.

If you will be on your own paying for health insurance after accepting an early retirement offer from WestRock, COBRA insurance is always available. COBRA may extend your family’s coverage for up to 18 months. But this coverage is expensive. You might be able to get added to your spouse's health plan if they are still working. 

If you still want to work, look into a company that offers health benefits to get you to age 65 You also have the option of entering the open market for an insurance policy. If you don’t have healthcare benefits or don’t yet qualify for Medicare, you may want to consider purchasing a health insurance policy from the Health Insurance Marketplace. 

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For example, a 60-year-old on a Silver-level plan may pay an average monthly premium of $1,216 in 2022, but this also does not include out-of-pocket expenses, such as deductibles, copays, or coinsurance.

Before making a decision about an early retirement offer from WestRock, determine if your severance package includes any health care benefits. If not, price out other health care options, such as those available on  Heathcare.gov Can the added expenses be supported with your retirement savings?

How does an early retirement package affect my retirement assets?

Retirement accounts

If you have a WestRock-sponsored 401(k) plan and are 100% vested, then that money is yours to keep. After leaving WestRock, you can consider rolling your 401(k) over to a new or existing IRA.

Workers who are 55 or older that take an early retirement package may be eligible to withdraw money from their WestRock-sponsored retirement plan, such as a  401(k) , without paying the 10% IRS penalty. This only applies if withdrawing from a current employer’s retirement plan, not any past employer. Just keep in mind that while you won’t have to pay the 10% penalty, you will have to pay income taxes on withdrawals from your 401(k). 

Note: Rule of 55 works only if you leave money in your 401(K)

Another method to avoid the 10% penalty is to utilize 72t if you rolled you money into an IRA.  You will need to take Substantially equal payments for 5 year or at age 59 1/2, whichever is later.

Accepting an early retirement offer or voluntary severance package from WestRock may require you to begin withdrawals from your 401(k), IRA, or other retirement accounts sooner than you originally expected.

Extra years of retirement can take a toll on your retirement nest egg. In fact, retiring earlier than planned can result in hundreds of thousands of dollars in extra expenses that your retirement portfolio must now support. It may also limit the growth of your assets already invested since you have to spend instead of saving.

Can your retirement portfolio withstand fewer years of contributions and more years of withdrawals? This is the first question you need to answer when making your decision.

When we help WestRock clients answer this question, we commonly use a cash flow analysis. This allows us to simulate different scenarios side-by-side, and quickly see the impact accepting – or declining – an early severance offer will have on your financial plan.

Pensions

WestRock employees who have earned a pension may worry that taking early retirement will affect their monthly benefits. Many pension plans partly determine monthly benefits based on how long an employee has worked for the company, so leaving early could reduce that monthly figure.

To offset these concerns, WestRock may increase the total number of years of service as part of the early retirement package. This can help bridge the gap for those who would receive a reduced pension as a result of retiring early.

Social Security benefits 

An early retirement package from WestRock can affect your Social Security benefits if you leave the workforce before working for a total of 35 years. The Social Security Administration averages your highest-earning 35 years of employment to decide your monthly benefits. For example, if you only worked for 32 years, then the government would add a $0 salary for three years to come up with your 35-year average. That means those three years of unemployment would technically count “against” you.

One potential consequence of accepting an early retirement offer is a reduction in Social Security benefits. Your future pension payments may also be reduced, depending on the language in your separation package.

If you accept an early retirement package, the benefits listed on your statement is not what you will receive. These estimated Social Security benefits assume that you continue to work for WestRock and make your current salary. As a retiree who accepts an early voluntary severance package, your future income will likely be reduced. This means potentially lower future Social Security payments.

Likewise, your pension statement likely makes assumptions on years of service. If you accept an early retirement offer, your years of service may be less than what your pension statement assumes.

The first step is to determine what your Social Security or pension benefits will be if you accept the early retirement package. We use several different cash flow analyses to determine your future pension benefits and your optimal Social Security selection. Calculating your optimal Social Security and pension depends on the options you have available, your savings, and your spending needs.

Pensions, and particularly pension benefits for those who retire early, often have options for increased payments until the retiree reaches Social Security age. This is usually referred to as a ‘Social Security Offset’ option. This option adds more to your early benefits, but your lifetime benefits may be reduced.

You also will have to consider what portion of your pension would be left to your spouse if you were to pass away in retirement. For most, the peace of mind by ensuring their spouse will receive a sizeable pension, is best. However, this will leave you with lower monthly benefits.

You may know that your monthly Social Security benefit is increased the longer you delay beginning your benefit. But that requires you to likely draw down on your retirement savings more early on in retirement. Social Security increases its payouts by 6.7% to 8.3%, plus an additional increment for inflation, for every year a beneficiary between ages 62 and 70 refrains from collecting a check.  Sometimes delaying collecting benefits for just one year could have a huge impact on a successful retirement for married couples. It may make sense for the lower-earning spouse to claim benefits early, while the higher-earning spouse delays.

Therefore, not only is it important to known which Social Security strategy gets you the most money in total, but also which options fits best with your retirement plan. If you are evaluating the early retirement offer on your own, you can start by using the  Social Security Administration’s Benefits Estimator .

From there, you can enter estimated future income to arrive at an estimated correct Social Security benefit. Once you have this updated, compare your new estimate to your monthly expenses. What impact will this reduced benefit reduction will have on your retirement plan and anticipated retirement account withdrawals?

Accepting an early retirement offer may force you to tap into your retirement savings, such as your 401(k) or IRA earlier, or it may mean changing when you will need to begin receiving Social Security benefits.

Unemployment benefits

If you decide to take an early retirement package, you may still be eligible for unemployment in certain circumstances. Your state may have its own qualifications, such as a specific period of service with a company before you can claim unemployment after leaving WestRock.

What if I don’t want to retire early, or I can’t afford to?

If you're unsure about your financial future, you might consider working with a financial advisor to go over your finances and how an early exit package may impact your retirement plans.  

If you can’t retire just yet, try to determine if a part-time job will be enough to fill the gaps. If not, can you at least afford to take a pay cut with your next job? If so, how much? Try to map out these answers while also thinking about ways you can cut back on expenses and adjust your budget to accommodate your new income. 

If you end up landing another job, your early retirement package won’t be impacted. However, you may want to check for a non-compete disclosure that could prevent you from working with one of WestRock's competitor for a specified time.

Can I negotiate my early retirement offer?

Just as you would negotiate a salary for a job offer, consider negotiating an early retirement package, too. Some employers may be willing to offer more money in the form of extended salary coverage or a lump-sum, better healthcare benefits or an addition to your years of service. Of course, they may decline, but you won’t know if you don’t ask.

If You Accept a Voluntary Separation Package – Consider Roth Conversions

Roth conversions can be an incredibly valuable tool for those who accept an early retirement offer. They can increase asset longevity and reduce total taxes paid during their retirement.  

For those with retirement account assets in tax deferred retirement savings accounts (like 401(k)s and IRAs), an  early retirement offer opens up the potential to save significantly on future taxes . Those who accept an early retirement buyout offer from WestRock will likely be facing a year or two of reduced income before Social Security benefits kick in. These years of reduced income can be the perfect time to convert some assets within your 401(k) or traditional IRA into a Roth IRA.

What if I don’t accept my early retirement offer?

Rejecting an Early Severance Offer

Of course, you have the option to say no to any voluntary severance package offered by WestRock.

If you want to continue working, or are unable to retire early, this may be your best option. Working additional years can lead to pay raises, promotions, increased Social Security and pension payments, and increased financial stability. However, rejecting an early retirement offer has potential drawbacks, too.

First, there is no guarantee that WestRock will repeat the early retirement offer in the future. Assuming that another offer will come later is not always a wise move. Second, and more importantly, realize that companies offers an early severance package to its employees to cut costs. If the company’s finances do not improve, there may be much worse outcomes in the future. WestRock may make layoffs, reduce employee pay, or eliminate other benefits.

 

 

How does the WestRock Company Consolidated Pension Plan specifically calculate the Normal Retirement Benefit for its employees, and what considerations should employees be aware of regarding the Final Average Pay calculation used by WestRock Company?

Normal Retirement Benefit Calculation: The WestRock Company calculates the Normal Retirement Benefit based on the employee's Final Average Pay. This is defined as the average of the employee's highest five years of earnings over the last ten years of employment before termination. Earnings included in the Final Average Pay are most wages, bonuses, commissions, and amounts deferred under the company’s 401(k) plan. Employees should be aware that earnings after December 31, 2015, are excluded unless they qualify under the Rule of 75​(WestRock Company_Issued…).

What are the specific eligibility requirements for the Disability Retirement Pension under the WestRock Company plan, and how does this differ for Legacy Mead and Legacy Westvaco participants within the WestRock Company workforce?

Disability Retirement Pension Eligibility: To qualify for a Disability Retirement Pension, an employee must have earned at least five years of Vesting Service and be deemed "totally and permanently disabled" according to specific criteria. Legacy Mead and Legacy Westvaco participants are subject to special rules detailed in the Legacy Supplement. Legacy Mead employees must apply separate criteria from Legacy Westvaco employees​(WestRock Company_Issued…).

In what ways can employees at WestRock Company manage and maximize their Vesting Service to ensure they receive the full benefits from the company’s pension plan, particularly for those with interrupted service or re-employment?

Vesting Service Maximization: WestRock employees can manage their Vesting Service by ensuring that they complete at least five years of service, which guarantees their right to pension benefits. Employees with interrupted service can still receive credit for Vesting Service if they return within five years. Additionally, employees who leave and return within a year will receive credit for the time they were absent​(WestRock Company_Issued…).

How does the WestRock Company handle the transition of benefits for employees who transfer between different positions within the company, and what impacts could this have on their eventual retirement benefits?

Transfer Between Positions: When WestRock employees transfer between different positions, their retirement benefit is calculated based on the greater of two methods. The first method calculates the benefit accrued at each position separately, while the second method applies the total benefit service across positions. Vesting Service is always combined, regardless of location or position​(WestRock Company_Issued…).

How does the WestRock Company plan ensure that pension benefits are protected, particularly through the Pension Benefit Guaranty Corporation (PBGC), and what should employees know about their rights and guarantees under this insurance?

Pension Benefit Protection (PBGC): The WestRock Pension Plan is insured by the Pension Benefit Guaranty Corporation (PBGC). This federal insurance guarantees that employees will receive their vested pension benefits even if the plan is terminated. Employees should understand that PBGC coverage has limits, and benefits might be reduced under certain circumstances​(WestRock Company_Issued…).

What are the consequences for WestRock Company employees who choose to withdraw from their pension plan or to rollover their benefits upon retirement or termination? How can they navigate these options effectively to avoid penalties?

Withdrawals and Rollovers: Employees can withdraw or roll over their pension benefits upon retirement or termination. Lump-sum withdrawals may be subject to taxes unless rolled over into a qualifying retirement account. Employees should consult the WestRock Benefits Center to avoid penalties and ensure compliance with federal tax regulations​(WestRock Company_Issued…).

How does the WestRock Company maintain compliance with federal regulations and best practices under ERISA, and what specific rights do employees have concerning their pension benefits?

ERISA Compliance: WestRock complies with the Employee Retirement Income Security Act (ERISA), ensuring that employees' pension rights are protected. Employees have the right to receive information about their benefits, act prudently, and enforce their rights through the claims and appeals process outlined in the plan​(WestRock Company_Issued…).

What resources are available to employees of WestRock Company for understanding their benefits under the Consolidated Pension Plan, and how can they utilize these resources to ensure they make informed decisions about their retirement?

Resources for Understanding Benefits: WestRock provides employees access to the WestRock Benefits Center, where they can obtain information on their pension plan. Employees are encouraged to review the Summary Plan Description and consult with the Benefits Center for clarification on their benefits and to make informed retirement decisions​(WestRock Company_Issued…).

How will the integration of employee benefits from various company acquisitions impact current staff at WestRock Company, and what steps is the company taking to communicate these changes effectively to its employees?

Impact of Acquisitions on Benefits: WestRock has acquired various companies over time, and employees from these acquisitions may have different pension rules applied to them. WestRock takes steps to integrate these employees and communicates any changes through the WestRock Benefits Center. Special rules may apply based on the previous employer’s pension plan​(WestRock Company_Issued…).

How can employees of WestRock Company get in touch with the WestRock Benefits Center to seek clarification about the Summary Plan Description, and what are the best practices to follow when requesting information regarding their pension plan?

Contacting the Benefits Center: Employees can contact the WestRock Benefits Center for clarification on the Summary Plan Description. Best practices include having detailed questions prepared, reviewing the SPD in advance, and requesting copies of documents or forms that clarify specific aspects of their pension plan​(WestRock Company_Issued…).

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