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Healthcare Provider Update: Healthcare Provider for Southern California Edison: Southern California Edison (SCE) primarily utilizes Blue Shield of California as its healthcare provider for employees. This partnership enables the company to offer a variety of health insurance options to its workforce, including comprehensive coverage options tailored to meet the diverse needs of its employees. Potential Healthcare Cost Increases in 2026: As the healthcare landscape shifts, Southern California Edison employees may see a significant impact on healthcare costs in 2026. With projected record increases in insurance premiums-some states reporting hikes exceeding 60%-combined with the potential expiration of enhanced federal subsidies, many employees could face out-of-pocket premium spikes exceeding 75%. Factors contributing to this trend include rising medical costs and aggressive rate hikes from major insurers, which underline the importance of strategic planning for healthcare expenses as retirement approaches. Adapting to these changes is essential for maintaining financial stability and ensuring access to necessary healthcare services. Click here to learn more
'Southern California Edison employees often face complex rollover decisions that can affect their retirement outcomes. To help avoid unnecessary taxes or penalties, it's important to understand rules like the 60-day window, the Rule of 55, and NUA strategies before moving assets.' — Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.
'Southern California Edison employees transitioning from their company plans need to understand rollover details such as timing, tax treatment, and NUA opportunities to help preserve long-term retirement value.' — Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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Common rollover mistakes that can trigger taxes and penalties.
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Special rules like the “Rule of 55” that can help early retirees.
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How Southern California Edison employees who own company stock can realize tax advantages through Net Unrealized Appreciation (NUA).
By Brent Wolf, CFP®, Wealth Enhancement
Transferring retirement savings from a 401(k) to an IRA can offer greater investment flexibility and control, but missteps during this process could lead to unnecessary taxes, penalties, or lost opportunities for growth. Thoughtful planning and awareness of the rules can help Southern California Edison employees steer clear of these costly mistakes.
1. Missing the 60-Day Rollover Window
When leaving a company like Southern California Edison, you may decide to move your 401(k) into an individual retirement account (IRA). There are two ways to move your funds: through a direct transfer or a 60-day rollover.
With a direct transfer, your 401(k) provider sends the funds directly to your IRA with no tax withheld. However, if you receive a check instead, you must deposit that amount into your IRA within 60 days. Missing that deadline can result in taxes being due and, if you’re under age 59½, a 10% early withdrawal penalty.
Additionally, your plan administrator may withhold up to 20% for federal taxes. For example, if you’re rolling over $10,000, you might receive only $8,000. To avoid tax on the withheld portion, you must deposit the full $10,000 into your IRA within 60 days—using other funds to cover the $2,000 difference until you’re refunded at tax time.
2. Overlooking the Rule of 55
Employees who leave Southern California Edison during or after the year they turn 55 may be able to use the “Rule of 55” to withdraw money from their 401(k) without the 10% early-withdrawal penalty (although ordinary income tax still applies).
This exception applies only to the 401(k) tied to the employer you just left—not to IRAs. If you roll your 401(k) into an IRA, that benefit is forfeited and the standard age-59½ rule applies. For public safety workers, the qualifying age may be as early as 50.
3. Missing Out on Southern California Edison Stock Tax Advantages
If you hold Southern California Edison company stock inside your 401(k), you may be able to use the Net Unrealized Appreciation (NUA) strategy. With NUA you move company stock directly from your 401(k) into a taxable brokerage account, paying ordinary income tax on the original cost basis only. The appreciated portion is then subject to long-term capital gains tax when sold—typically a lower rate.
For example, if your company stock cost basis was $300,000 and it has grown to $3 million, only $300,000 is taxed as ordinary income when distributed; the $2.7 million in growth is taxed later at long-term capital gains rates.
However, if you roll that stock into an IRA through a direct rollover, you lose the NUA benefit—all future withdrawals would be taxed as ordinary income.
Plan Thoughtfully and Seek Guidance
Even seasoned investors can miss key details of a 401(k) rollover. Southern California Edison employees nearing retirement may benefit from professional guidance to navigate complex tax rules, refine rollover strategies, and make informed decisions about their pension and savings.
The Retirement Group helps corporate professionals address retirement transitions and rollovers. To discuss your options, call (800) 900-5867 to speak with an advisor familiar with Southern California Edison benefits and retirement programs.
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Sources:
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1. Adams, Hayden. “When Can You Withdraw? 401(k)s and the Rule of 55.” Charles Schwab , 1 Apr. 2025, www.schwab.com/learn/story/retiring-early-5-key-points-about-rule-55 . Accessed 17 Nov. 2025.
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2. Ellis, Donna. “401(k) Rollover Rules: How to Avoid Costly Mistakes.” Creative Planning , 5 Nov. 2025, creativeplanning.com/insights/financial-planning/401k-rollover-rules-avoid-costly-mistakes/. Accessed 17 Nov. 2025.
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3. Hayes, Adam, Ph.D., CFA. “Net Unrealized Appreciation (NUA): Definition and Tax Treatment.” Investopedia , 14 May 2025, www.investopedia.com/terms/n/netunrealizedappreciation.asp . Accessed 17 Nov. 2025.
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…).
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