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Healthcare Provider Update: Healthcare Provider for Alcoa Alcoa has partnered with several healthcare plans to provide its employees with benefits, primarily utilizing the services of major health insurance providers. For many employees, Alcoa's health coverage encompasses offerings from companies like Anthem Blue Cross Blue Shield and Aetna, focusing on comprehensive coverage options that include medical, dental, and vision plans. Potential Healthcare Cost Increases for Alcoa in 2026 As we look ahead to 2026, healthcare costs are projected to rise significantly, primarily driven by increases in ACA marketplace premiums. Nationally, insurers are requesting median premium hikes of approximately 20%, with individual states seeing increases as high as 66%. The expiration of enhanced federal premium subsidies adds further pressure, potentially leading to a staggering 75% increase in out-of-pocket costs for many enrollees. For Alcoa employees, these factors will likely mean a reevaluation of healthcare spending and strategic planning to mitigate escalating out-of-pocket expenses in the coming year. Click here to learn more
'Thoughtful multigenerational planning can help Alcoa employees navigate GSTT considerations more effectively, making it an essential part of preparing families for long-term financial transitions.' -- Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.
'Carefully structuring multigenerational wealth transfers can help Alcoa employees stay aligned with GSTT rules and should be considered when discussing long-term family planning priorities.' -- Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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Key concepts behind the generation-skipping transfer tax (GSTT).
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Common exemptions and exclusions that may lessen transfer tax exposure.
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Planning methods that can help families pass wealth across generations.
Important Takeaways on How to Transfer Wealth Across Generations
The generation-skipping transfer tax (GSTT) is relevant for any Alcoa employees transferring wealth to grandchildren or other individuals that skip over your children's generation.
Both GSTT and gift or estate taxes may apply when transferring assets to heirs more than one generation below the transferor.
Exemptions may lower transfer tax liability if planning is structured thoughtfully.
Federal gift and estate taxes—applicable to transfers during life or at death—are familiar to many Alcoa employees. However, when assets move to people more than one generation below the transferor, such as a gift from a grandparent to a grandchild, the federal generation-skipping transfer tax (GSTT) may also apply.
Generation-Skipping Transfer Tax: What Is It?
Transfers to “skip persons,” those more than one generation below the transferor or more than 37½ years younger, are subject to the GSTT. This federal tax applies in addition to any federal gift or estate tax due and equals the highest federal gift and estate tax rate in effect—a flat rate of 40%—which is relevant for Alcoa employees engaging in multigenerational planning.
The GSTT was introduced in 1976 to address concerns that affluent families could shift assets in ways that bypassed estate taxes at each generational level. 1
Lifetime Exemptions and Gift Tax Exclusions
Transfers made during life or at death to anyone other than a spouse or qualified charity may be subject to federal gift or estate tax. Key exclusions include several that may benefit Alcoa employees:
Annual gift tax exemption: In 2026, individuals may give up to $19,000 per recipient without incurring federal estate or gift tax. Couples may combine exclusions for a total of $38,000 per beneficiary. 2 For example, a married couple with two children could give $76,000 total ($38,000 to each child) annually without gift tax.
Qualified transfers: Payments made directly to educational institutions for tuition or to medical providers for medical expenses are not considered taxable gifts. There is no dollar limit on these transfers. 1
Lifetime unified exclusion: Individuals may transfer up to $13.99 million (or $27.98 million per married couple) during life or at death without federal gift or estate tax. 2 Lifetime gifts reduce the remaining exclusion available at death.
Transfers exceeding these exclusions are taxed at the top federal estate and gift tax rate of 40%.
Exclusions & Exemptions from GSTT
The GSTT has rules similar to traditional gift tax laws, which can influence planning for Alcoa families:
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- Grandparents may give up to $19,000 directly to a grandchild in 2026 without triggering gift tax or GSTT.
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- Each individual has a $13.99 million lifetime GSTT exemption ($27.98 million per couple), though this exemption is not independent from estate or gift tax rules.
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Transfers above exemption thresholds are subject to a 40% GSTT.
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GSTT applies only at the federal level, although some states may impose their own estate or inheritance taxes.
When Does the GSTT Start to Apply?
The GSTT applies to three types of taxable events, all of which may arise in multigenerational planning for Alcoa families:
Direct skips: Transfers made directly to a skip person or to a trust for their exclusive benefit. The transferor or their estate pays the tax.
Taxable distributions: Distributions from a trust to a skip person. The beneficiary pays the tax.
Taxable terminations: Occur when a trust interest ends and only skip persons remain as beneficiaries. The trustee pays the tax.
GSTT Exemption Allocations
Transfers—outright or to a trust—may qualify for GSTT exemption as long as the exemption is properly allocated. Once allocated, all future growth on those trust assets is generally free from GSTT, a strategy Alcoa families may want to use.
For example, if a person contributed $10 million to an irrevocable trust for grandchildren in 2024 and allocated the GSTT exemption, and the trust later grew to $20 million, future distributions would not incur GSTT. 1
Methods for Lowering GSTT
1. 529 Plan Contributions
Contributions to 529 college savings plans are treated as completed gifts, even though account owners can change the beneficiary. Grandparents may “superfund” a 529 plan with five years of annual exclusions at once—up to $95,000 per beneficiary in 2025 or $190,000 per beneficiary for a married couple filing jointly 3 —which may interest Alcoa retirees.
2. Dynasty Trusts
Dynasty trusts are irrevocable trusts designed to last across multiple generations. Some states allow long-term or perpetual trusts, while others limit trust duration under the “rule against perpetuities.” These trusts can combine GSTT planning with long-term asset preservation features and, when fully exempt from GSTT, future distributions or terminations can occur without additional GSTT 4 —an appealing option for extended family planning.
Concluding Remarks
Although GSTT planning can be complex, exemptions and structured transfers may help Alcoa employees reduce or eliminate federal taxes on wealth passed to grandchildren or other skip persons.
The Retirement Group can assist you with wealth transfer planning and retirement income strategies. Call our team at (800) 900-5867 for guidance.
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Sources:
1. Fidelity Investments. “Understanding the Generation-Skipping Transfer Tax.” Fidelity , 3 Oct. 2025, www.fidelity.com/viewpoints/wealth-management/insights/generation-skipping-transfer-tax .
2. Internal Revenue Service. “ IRS releases tax inflation adjustments for tax year 2027 .” IRS.gov , 9 Oct. 2025.
3. Bendig, Erin. “How This 529 ‘Superfund’ Strategy Can Transform Your Estate Plan.” Kiplinger , 12 Sept. 2025, www.kiplinger.com/personal-finance/this-super-529-strategy-can-help-you-jumpstart-college-savings .
4. Investopedia. ' What Is a Dynasty Trust? ' by Will Kenton. 31 March 2025.
What are the key eligibility requirements for employees to participate in the Pension Plan for Certain Hourly Employees of Alcoa USA Corp, and how do these requirements change if an employee is hired or rehired after April 1, 2022? This question aims to explore the specific criteria that must be met for participation in the plan, providing clarity on both the general eligibility for new employees and any exceptions for those previously employed.
Eligibility Requirements: Employees are automatically eligible for the Pension Plan for Certain Hourly Employees of Alcoa USA Corp if they were hired or rehired before April 1, 2022, have reached age 21, and completed one year of vesting service. Employees hired or rehired on or after April 1, 2022, are not eligible for this pension plan(Alcoa USA Corp_Pension …).
How is the vesting service calculated in the context of the Alcoa USA Corp pension plan, and what implications does it have for an employee considering retirement? Understanding the nuances of how vesting service is accrued and the minimum time required to become vested can significantly impact an employee's retirement planning.
Vesting Service Calculation: Vesting service determines when an employee becomes eligible for pension benefits. Employees become vested after completing five years of vesting service, which includes both periods of pension service and non-pension service such as absences not counted towards pension service. This is crucial for retirement planning, as it ensures employees are entitled to pension benefits even if they leave the company after becoming vested(Alcoa USA Corp_Pension …).
What various retirement options are available to employees of Alcoa USA Corp, and how do these options affect the benefits and payout structure for retiring employees? This question addresses the multiple choices employees face when planning their retirement, including the differences between normal retirement, early retirement, and disability retirement benefits.
Retirement Options: The plan offers normal retirement (at age 65 with five years of vesting service), 60/10 retirement (for employees between 60 and 62 with 10 years of vesting service), and 62/10 retirement (for employees between 62 and 65 with 10 years of vesting service). Disability retirement is also available for those permanently incapacitated with 10 years of vesting service(Alcoa USA Corp_Pension …).
Can you elaborate on the survivor benefits provided under the Alcoa USA Corp pension plan, and what steps need to be taken to ensure that a spouse or partner is eligible for these benefits upon the employee's retirement? This question seeks to examine the protections and financial security afforded to survivors, alongside the required documentation and choices available to employees.
Survivor Benefits: The pension plan provides automatic surviving spouse coverage unless waived by the employee and spouse. Surviving spouse pensions are payable if the employee dies while actively employed and vested in the plan, after retirement, or while receiving a deferred vested pension. The spouse must submit a written application to claim benefits(Alcoa USA Corp_Pension …)(Alcoa USA Corp_Pension …).
What are the specific methodologies used to calculate the regular monthly pension for employees retiring under the Alcoa USA Corp pension plan, and how might these calculations vary based on an employee's age and years of service? This question looks at the complex actuarial factors that influence pension benefits, enhancing employees' understanding of how their retirement income is determined.
Pension Calculation: The regular monthly pension is calculated using a formula based on the employee's pension service and a pension factor in effect when pension service ends. For example, if an employee retires at 65 with 10 years of service, the pension factor might be $57 per year of service. The pension is adjusted based on age and service length(Alcoa USA Corp_Pension …).
In the event of a disability, how does the Alcoa USA Corp pension plan provide support to affected employees, and what are the requirements to qualify for disability retirement benefits? This question emphasizes the importance of understanding disability provisions, ensuring employees are aware of their rights and the circumstances under which they might qualify for benefits.
Disability Retirement: Employees under 62 who are permanently incapacitated with at least 10 years of vesting service qualify for disability retirement. They must be deemed permanently disabled and unable to return to work in a bargaining unit occupation. A medical examination may be required to confirm ongoing eligibility(Alcoa USA Corp_Pension …).
What steps must Alcoa USA Corp employees take to apply for retirement benefits, and what timelines are involved in the processing and payout of these benefits? This question delves into the procedural aspects of retirement applications, aiming to prepare potential retirees for the necessary actions they must undertake.
Retirement Application Process: Employees must file a retirement application with the plan administrator before their desired retirement date. The application can be filed up to 90 days before retirement, and the process typically includes receiving benefit explanations and payment elections within this timeframe(Alcoa USA Corp_Pension …).
How does the Pension Benefit Guaranty Corporation (PBGC) influence the pension benefits received by employees of Alcoa USA Corp, particularly in the context of plan terminations or financial challenges? This question explores the security provided by the PBGC, focusing on its role as a backup for employees’ pension benefits.
Pension Benefit Guaranty Corporation (PBGC): The PBGC provides a safety net for pension benefits in the case of plan termination or financial distress. If the pension plan is underfunded, the PBGC ensures employees still receive pension benefits, although certain limitations may apply(Alcoa USA Corp_Pension …).
What resources and support does Alcoa USA Corp provide to its employees for understanding their pension plan, and how can employees reach out for assistance regarding their retirement options? This question emphasizes the resources available to employees for further education and guidance, ensuring they know where to turn for help.
Resources for Understanding the Plan: Employees can access information about their pension plan and retirement options through the Alight Worklife™ website or by calling the Alcoa benefits helpline. These resources offer guidance on applying for retirement and understanding plan benefits(Alcoa USA Corp_Pension …).
How can employees of Alcoa USA Corp contact the benefits management team to learn more about their specific pension plan details, and what channels are available for inquiries? Understanding the communication channels can empower employees to seek the information they need, facilitating a smoother transition into retirement.
Contacting Benefits Management: Employees can reach out to the benefits management team through the Alight Worklife™ website or by phone at 1-844-31ALCOA. This service provides assistance with pension-related inquiries and retirement applications(Alcoa USA Corp_Pension …).
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