/General/General%208.png?width=1280&height=853&name=General%208.png)
For Southern California Edison employees and retirees, understanding key investment terms like portfolio, stock, bond and mutual funds is important - and working with an expert like Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group, can help you tailor a plan that fits your Retirement goals,' he said.
'Southern California Edison employees and retirees should understand risk, return and diversification in investing, and Tyson Mavar, a representative of the Retirement Group, a division of Wealth Enhancement Group, can help structure investments to achieve long-term financial security,' he said.
In this article we will discuss:
1. Typical investment components are stocks, bonds and cash.
2. Describe how mutual funds and ETFs diversify and reduce risk for investors.
3. Understand investment terms such as dividends, yield and market trends.
Just left Southern California Edison and started investing? You may have heard unfamiliar terms. We therefore created this glossary to help Southern California Edison employees and retirees become more confident investors.
Portfolio
The assets of someone or an organization are called a portfolio. A portfolio contains typically several asset classifications including stocks, bonds and cash. That includes your Southern California Edison pension, 401(k), lump sum and annuity payments upon retirement. The asset allocation of a portfolio depends typically on investor risk aversion, time horizon and investment objectives.
Stock
Stocks are instruments that represent ownership in a business. Shares in the benefits package for most Southern California Edison employees come with time in the workforce. Any shareholder can get a cut of the company's assets and profits. Shareholders are both beneficiaries and losers of their position - they win if the company succeeds and lose money if it fails.See how principal value and return on investment of stocks fluctuate with respect to market conditions. Shares transferred may have a value greater than or lower than their initial price.
Bond
The government agency or corporation is issuing a bond to raise money for current operations or new projects. Investors buying bonds become the issuer's creditors. Bondholders typically get interest payments periodically. Their amounts depend on the coupon rate, which is a fixed annual interest rate. These interest rates could also affect your Southern California Edison settlement sum and annuity. Absent issuer default, bondholders should receive the full par value of the bond at the maturity date specified.The principal of bonds may change depending on market conditions. Prematurely redeemed bonds might be worth more or less than their face value.
More Articles You May Like:
Cash
Another investment or asset is cash. It consists of low-risk and liquid alternatives to money and currency.Typical alternatives to currency include savings accounts, certificates of deposit/CDs, and U.S. Treasury bills.The FDIC insures certificates of deposit (CDs) and bank savings accounts with generally fixed interest rates up to USD 250,000 per depositor per insured institution.T-rex securities are backed to the full faith and credit of the government for timely principal and interest payments.
Mutual Fund
It is a grouping of stocks, bonds and / or other securities purchased and / or managed by an investment company on behalf of many investors. The net asset value (NAV) of the underlying securities determines the price at which shares are purchased from and sold back to the investing company at the end of each trading day. Employees of Southern California Edison have access to mutual funds managed by competent people and a broad investment mix. Diversification reduces risk but does not ensure a profit or prevent investment loss. Understand diversity to ensure a stress-free Southern California Edison retirement.
Exchange-Traded Fund
A portfolio of assets prepared by an investment firm is called an exchange-traded fund (ETF). Unlike mutual funds however, ETF shares can be traded throughout the day on stock exchanges just like individual equities and the price may be higher or lower than the NAV depending on supply and demand. ETFs usually have low expense ratios but you have to pay a commission to buy or sell them - and your overall costs may be higher if you trade frequently.
The return and principal value of mutual funds and ETFs changes with the market. Shares transferred may have a value greater than or lower than their initial price. Check prospectus carefully before investing to understand fund investment objectives, risks, fees and expenses. Read the document before investing.
Dividends
Dividends are distributions by a company of its earnings to its shareholders - typically quarterly - in cash or additional equity shares. The dividend per share is decided by the board of directors of the corporation. An important tax consideration for buyers of Southern California Edison dividends with lump sum payments is often not thought of. Many investors consider dividend payments a sign of a company's health and future prospects.
The yield on a dividend investment is high. Lower volatility and more stable returns mean investors must be prepared for periods when dividend payers detract from a stock portfolio. Profitable economic, market and political factors may affect a company's dividend payout. Generally speaking, dividends are unsecured and can be changed or eliminated.
Yield
Usually, the yield on an investment represents the current income received. Yield for a stock equals the sum of all annual dividends divided by the current share price. Yield on a bond: divide the annual interest rate by the current pricing. The return is comprised of price appreciation and depreciation and is not related to yield. Investments with a higher yield target involve more risk.
Index
A statistical composite called an index tracks the long-term evolution of economic conditions (like inflation) or financial markets. Many different indices are available for assessing how an asset performed. The S&P 500 Index is considered representative of the U.S. equity market overall.An unmanaged index does not necessarily reflect investment performance. No one can own an index directly. Past performances do not indicate future results. The real results could be different.
Bear/Bull Market
Typically a bear market involves falling asset prices that drop 20% or more in several major market indexes over a period of months or more. A bull market is a period of rising prices and investor optimism that lasts for months or years. All these market fluctuations could affect investor attitudes and actions.
Added Fact:
Southern California Edison employee or retiree looking to learn more about investing should know about required minimum distributions (RMDs). RMDs are the minimum amounts that people must take out of retirement accounts - 401(k)s and traditional IRAs - by age 72, the IRS said in 2023 (IRS, updated 2023). Withdrawing the RMD may be punishable. Southern California Edison employees and retirees need to understand RMDs when planning investments and preparing for retirement to avoid IRS penalties and interest rates.
Added Analogy:
Knowing investment terms for Southern California Edison employees and retirees is like having an organized toolbox for a craftsman. All terms are tools that help investors navigate the maze of financial markets. Just as a craftsman needs a hammer and a wrench to drive in nails and a wrench to tighten bolts, understanding terms like portfolio, stock, bond, cash, mutual fund, ETF, dividends, yield, index and bear/bull market provides investors with the tools to build a secure and prosperous financial future. Familiarizing themselves with these terms allows Southern California Edison employees and retirees to invest like craftsmen - picking the right tool for the job and building a long-term portfolio (Author, Date).
Articles you may find interesting:
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
Sources:
1. Johns Hopkins University Human Resources. Retirement Choice Glossary . 2019, hr.jhu.edu/wp-content/uploads/2019/06/RetirementChoiceGlossary.pdf?utm_source=chatgpt.com .
2. Protective Life. 'Retirement Glossary: Terms You Should Know.' Protective Life , 2023, protective.com/learn/retirement-glossary-terms-you-should-know?utm_source=chatgpt.com .
3. Carbon Collective. 'Retirement Planning Glossary | 20 Retirement Terms You Should Know.' Carbon Collective , 2023, carboncollective.co/sustainable-investing/retirement-planning-glossary?utm_source=chatgpt.com .
4. Internal Revenue Service. 'Retirement Topics - Required Minimum Distributions (RMDs).' IRS , 2023, irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds?utm_source=chatgpt.com .
5. Charles Schwab. 'IRA Withdrawals: Required Minimum Distributions.' Charles Schwab , 2023, schwab.com/ira/traditional-ira/withdrawal-rules/required-minimum-distributions?utm_source=chatgpt.com .
How does SoCalGas determine its pension contribution levels for 2024, and what factors influence the funding strategies to maintain financial stability? In preparing for the Test Year (TY) 2024, SoCalGas employs a detailed actuarial process to ascertain the necessary pension contributions. The actuarial valuation includes an assessment of the company's Projected Benefit Obligation (PBO) under Generally Accepted Accounting Principles (GAAP). These calculations incorporate variables such as current employee demographics, expected retirement ages, and market conditions. Additionally, SoCalGas must navigate external economic factors, including interest rates and economic forecasts, which can impact the funded status of its pension plans and the associated financial obligations.
SoCalGas determines its pension contribution levels using a detailed actuarial process that evaluates the Projected Benefit Obligation (PBO) under Generally Accepted Accounting Principles (GAAP). The contribution is influenced by variables such as employee demographics, retirement age expectations, market conditions, and external economic factors like interest rates and economic forecasts. SoCalGas maintains financial stability by adjusting funding strategies based on market returns and required amortization periods(Southern_California_Gas…).
What specific changes to SoCalGas's pension plan are being proposed for the upcoming fiscal year, and how will these changes impact existing employees and retirees? The proposals for the TY 2024 incorporate adjustments to the existing pension funding mechanisms, including the continuation of the two-way balancing account to account for fluctuations in pension costs. This measure is designed to stabilize funding while meeting both the service cost and the annual minimum contributions required under regulatory standards. Existing employees and retirees may see changes in their benefits as adjustments are made to align with these funding strategies, which may include modifications to expected payouts or contributions required from retirees depending on their service years and retirement age.
For the 2024 Test Year, SoCalGas is proposing to adjust its pension funding policy by shortening the amortization period for the PBO shortfall from fourteen to seven years. This change aims to fully fund the pension plan more quickly, improving long-term financial health while reducing intergenerational ratepayer burden. Existing employees and retirees may experience greater financial stability in the pension plan due to these proactive funding strategies(Southern_California_Gas…).
In what ways does SoCalGas's health care cost escalation projections for postretirement benefits compare with national trends, and what strategies are in place to manage these costs? The health care cost escalations required for the Postretirement Health and Welfare Benefits Other than Pension (PBOP) at SoCalGas have been developed in alignment with industry trends, which show consistent increases in health care expenses across the nation. Strategies implemented by SoCalGas involve negotiation with health care providers for favorable rates, introduction of health reimbursement accounts (HRAs), and ongoing assessments of utilization rates among retirees to identify potential savings. These measures aim to contain costs while ensuring that retirees maintain access to necessary healthcare services without a significant financial burden.
SoCalGas's healthcare cost projections for its Postretirement Benefits Other than Pensions (PBOP) align with national trends of increasing healthcare expenses. To manage these costs, SoCalGas employs strategies like negotiating favorable rates with providers, utilizing health reimbursement accounts (HRAs), and regularly assessing healthcare utilization. These efforts aim to control healthcare costs while ensuring that retirees receive necessary care(Southern_California_Gas…).
What resources are available to SoCalGas employees to help them understand their benefits and the changes that may occur in 2024? SoCalGas provides various resources to employees to clarify their benefits and upcoming changes, including dedicated HR representatives, comprehensive guides on benefits options, web-based portals, and informational seminars. Employees can access personalized accounts to view their specific benefits, contributions, and projections. Additionally, the company offers regular training sessions covering changes in benefits and how to navigate the retirement process effectively, empowering employees to make informed decisions regarding their retirement planning.
SoCalGas provides employees with various resources, including HR representatives, benefit guides, and web-based portals to help them understand their benefits. Employees also have access to personalized retirement accounts and training sessions that cover benefit changes and retirement planning, helping them make informed decisions regarding their future(Southern_California_Gas…).
How does the PBOP plan impact SoCalGas’s overall compensation strategy for attracting talent? The PBOP plan is a critical component of SoCalGas’s total compensation strategy, designed to attract and retain high-caliber talent in an increasingly competitive market. SoCalGas recognizes that comprehensive postretirement benefits enhance their appeal as an employer. The direct correlation between competitive benefits packages, including the PBOP plan's provisions for health care coverage and financial support during retirement, plays a significant role in talent acquisition and retention by providing peace of mind for employees about their long-term financial security.
SoCalGas's PBOP plan plays a crucial role in its overall compensation strategy by offering competitive postretirement health benefits that enhance the attractiveness of the company's total compensation package. This helps SoCalGas attract and retain a high-performing workforce, as comprehensive retirement and healthcare benefits are important factors for employees when choosing an employer(Southern_California_Gas…).
What are the anticipated trends in the pension and postretirement cost estimates for SoCalGas from 2024 through 2031, and what implications do these trends hold for financial planning? Anticipated trends in pension and postretirement cost estimates are projected to indicate gradual increases in these costs due to changing demographics, increasing life expectancies, and inflation impacting healthcare costs. Financial planning at SoCalGas thus necessitates a proactive approach to ensure adequate funding mechanisms are in place. This involves forecasting contributions that will remain in line with the projected obligations while also navigating regulatory requirements to avoid potential funding shortfalls or impacts on corporate finances.
SoCalGas anticipates gradual increases in pension and postretirement costs from 2024 to 2031 due to changing demographics, increased life expectancies, and rising healthcare costs. This trend implies that SoCalGas will need to implement robust financial planning strategies, including forecasting contributions and aligning funding mechanisms with regulatory requirements to avoid potential shortfalls(Southern_California_Gas…).
How do SoCalGas's pension plans compare with those offered by other utility companies in California in terms of competitiveness and sustainability? When evaluating SoCalGas's pension plans compared to other California utility companies, it becomes evident that SoCalGas's offerings emphasize not only competitive benefits but also a sustainable framework for its pension obligations. This comparative analysis includes studying funding ratios, benefit structures, and employee satisfaction levels. SoCalGas aims to maintain a robust pension plan that not only meets current employee needs but is also sustainable in the long term, adapting to changing economic conditions and workforce requirements while remaining compliant with state regulations.
SoCalGas's pension plans are competitive with those of other utility companies in California, with a focus on both benefit structure and long-term sustainability. SoCalGas emphasizes maintaining a robust pension plan that is adaptable to changing market conditions, regulatory requirements, and workforce needs. This allows the company to remain an attractive employer while ensuring the sustainability of its pension commitments(Southern_California_Gas…).
How can SoCalGas employees reach out for support regarding their pension and retirement benefits, and what types of inquiries can they make? Employees can contact SoCalGas’s Human Resources Benefits Department through dedicated communication channels such as the company’s HR support line, email, or scheduled one-on-one consultations. The HR team is trained to address a variety of inquiries related to pension benefits, eligibility requirements, plan options, and retirement planning strategies. Moreover, employees can request personalized benefits statements and assistance with understanding their entitlements and the implications of any regulatory changes affecting their plans.
SoCalGas employees can reach out to the company's HR Benefits Department through a dedicated support line, email, or consultations. They can inquire about pension benefits, eligibility, plan options, and retirement strategies. Employees may also request personalized benefits statements and clarification on regulatory changes that may affect their plans(Southern_California_Gas…).
What role does market volatility and economic conditions play in shaping the funding strategy of SoCalGas's pension plans? Market volatility and economic conditions play a significant role in shaping SoCalGas's pension funding strategy, influencing both asset returns and liabilities. Fluctuations in interest rates, market performance of invested pension assets, and changes in demographic factors directly affect the PBO calculation, requiring SoCalGas to adjust its funding strategy responsively. This involved the use of sophisticated financial modeling and scenario analysis to ensure that the pension plans remain adequately funded and financially viable despite adverse economic conditions, thereby protecting the interests of current and future beneficiaries.
Market volatility and economic conditions significantly impact SoCalGas's pension funding strategy, affecting both asset returns and liabilities. Factors like interest rates, market performance of pension assets, and demographic shifts influence the PBO calculation, prompting SoCalGas to adjust its funding strategy to ensure adequate pension funding and long-term plan viability(Southern_California_Gas…).
What steps have SoCalGas and SDG&E proposed to recover costs related to pension and PBOP to alleviate financial pressure on ratepayers? SoCalGas and SDG&E proposed implementing a two-way balancing account mechanism designed to smoothly recover the costs associated with their pension and PBOP plans. This initiative aims to ensure that any variances between projected and actual contributions are adjusted in a timely manner, thereby reducing the financial burden on ratepayers. By utilizing this approach, the Companies seek to maintain stable rates while ensuring that all pension obligations can be met without compromising operational integrity or service delivery to their customers. These questions reflect complex issues relevant to SoCalGas employees preparing for retirement and navigating the nuances of their benefits.
SoCalGas and SDG&E have proposed utilizing a two-way balancing account mechanism to recover pension and PBOP-related costs. This mechanism helps adjust for variances between projected and actual contributions, ensuring that costs are managed effectively and do not overly burden ratepayers. This approach aims to maintain stable rates while fulfilling pension obligations(Southern_California_Gas…).
-2.png?width=300&height=200&name=office-builing-main-lobby%20(52)-2.png)
.webp?width=300&height=200&name=office-builing-main-lobby%20(27).webp)
-2.png)
.webp)