Healthcare Provider Update: Healthcare Provider for Nokia Nokia primarily utilizes Aetna, a leading health insurance provider, for its employee healthcare needs. Aetna offers a wide range of health plans designed to fit the diverse needs of Nokia's workforce across various locations. Potential Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are projected to rise significantly, influenced by multiple factors impacting the Affordable Care Act (ACA) marketplace. Insurance premiums are expected to escalate by an average of 18% nationally, with some states witnessing hikes over 60%. A critical driver behind this surge is the potential expiration of federal premium subsidies, which currently shield many consumers from high out-of-pocket expenses. Without these subsidies, the affordability of healthcare will be compromised for millions, forcing consumers to reconsider their coverage options and financial strategies in anticipation of these price increases. Click here to learn more
'Grantor retained annuity trusts can be a powerful way for Nokia employees to transfer future asset growth efficiently, as long as they're structured correctly in coordination with estate planning professionals.' — Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.
'Nokia employees considering a GRAT should view it as a disciplined estate planning approach that allows them to pass future asset growth efficiently, with the help of qualified estate and tax professionals.' — Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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How a Grantor Retained Annuity Trust (GRAT) can function as part of a comprehensive estate plan.
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Key advantages and potential considerations when using a GRAT strategy.
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Why GRATs may be particularly valuable for Nokia employees with appreciating assets.
Important Takeaways
A Grantor Retained Annuity Trust (GRAT) can play a meaningful role in an estate plan for Nokia employees who hold assets anticipated to increase in value substantially over time.
With a GRAT, the grantor transfers assets to an irrevocable trust while receiving fixed annuity payments for a set period. If the trust’s assets perform better than the IRS Section 7520 rate and the grantor lives through the term, the excess appreciation can pass to beneficiaries without additional gift tax and outside of the estate.
A “zeroed-out” GRAT enables the grantor to minimize or eliminate the use of the lifetime gift and estate tax exclusion, because the present value of the retained annuity nearly equals the value of the transferred assets.
Understanding the GRAT
A GRAT is an irrevocable trust that uses a small portion of the federal gift and estate tax exemption to shift future asset growth to heirs.
After funding the trust, the grantor retains the right to receive fixed annual annuity payments for a specified term. The annuity value is calculated using the IRS Section 7520 rate, which updates monthly and equals 120% of the applicable federal interest rate (AFR).
If the grantor lives through the term and the trust’s assets perform better than the 7520 rate, the appreciation can pass to heirs outside the taxable estate and without additional gift tax. This structure may be useful for Nokia professionals with equity-based compensation or assets that have meaningful growth potential.
How a GRAT Operates
A GRAT effectively “freezes” the taxable value of the transferred assets as of the funding date, allowing beneficiaries to benefit from growth above the Section 7520 rate. For gift tax purposes, the annuity payment is determined using the 7520 rate. If the grantor lives through the trust term, any remaining assets typically pass to heirs outside the estate.
Choosing the GRAT Term
Typical GRAT terms span two to ten years. A longer term may create more time for assets to grow relative to the Section 7520 rate. However, many individuals—including Nokia employees with fluctuating investment portfolios—prefer multiple short-term rolling GRATs, supporting flexibility in various market and interest rate environments.
Advantages of a Flexible GRAT
If a GRAT includes a replacement power under Internal Revenue Code §675(4)(C), the grantor may exchange assets of equal value during the trust term. This gives the grantor the option to substitute assets that may have stronger growth potential, provided proper documentation and compliance procedures are followed.
Transferring High-Growth Assets
Funding a GRAT with assets anticipated to grow significantly—such as marketable securities, private business interests, or pre-IPO shares—can be especially useful. Nokia employees with company stock or equity-based compensation may find GRATs advantageous for shifting growth potential to the next generation.
Structuring Annuity Payments
The IRS permits GRAT annuity payments to rise by as much as 20% annually, which may leave more principal in the trust early in the term, potentially supporting greater growth over time.
Tax Treatment
A GRAT is often treated as a grantor trust for income tax purposes, meaning the grantor reports trust gains, income, and losses on their personal return. The IRS does not treat the grantor’s payment of tax on trust income as an additional gift.
Risks and Considerations
If the grantor passes away during the GRAT term, the remaining trust assets—along with appreciation—are generally included in the taxable estate. In addition, if trust assets do not grow beyond the Section 7520 rate, the benefit to heirs may be limited because only annuity payments would return to the grantor.
Legislative updates have been introduced periodically to limit GRAT use, such as requiring minimum terms or a minimum remainder value, although no such changes have become law as of 2025.
Generation-Skipping Transfer Tax (GSTT)
A GRAT does not automatically bypass generation-skipping transfer tax. Due to Estate Tax Inclusion Period (ETIP) rules, GSTT exemption typically is applied after the trust term concludes. Working with estate planning counsel may help align timing and exemption decisions.
Should Nokia Employees Consider a GRAT?
For those interested in transferring wealth efficiently while managing gift tax exposure, a GRAT may be an effective planning tool. Results depend on the grantor’s lifespan, asset performance, and proper legal structuring. Nokia employees evaluating this strategy should seek guidance from an estate planning attorney or tax professional.
Need Guidance Tailored to Your Situation?
The Retirement Group assists individuals in understanding and improving estate and retirement planning strategies.
Call (800) 900-5867 to speak with a knowledgeable professional who can help determine whether a GRAT—or another approach—suits your long-term goals.
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Sources:
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1. U.S. Department of the Treasury, Internal Revenue Service. “26 CFR §25.2702-3: Requirements for Qualified Interests (GRATs).” Code of Federal Regulations , 2012 ed., Title 26, vol. 14, Government Publishing Office, Apr. 1 2012, pp. 1-2.
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2. Badgley v. United States. No. 18-16053, U.S. Court of Appeals for the Ninth Circuit, 28 Apr. 2020. pp. 6-7, 16-18.
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3. Internal Revenue Service. Notice 2003-72: Qualified Interests (Acquiescence to Walton). 3 Nov. 2003. IRS Bulletin 2003-44, pp. 964. Scott S. Landes, principal author.
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4. Cornell Law School, Legal Information Institute. “26 U.S.C. § 7520 – Valuation Tables.” LII/USCode, Cornell University, updated 2025, law.cornell.edu/uscode/text/26/7520.
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5. Impert, Walter M., and Mark G. Riedy. “A Review of Grantor Trusts.” Real Property, Probate & Trust Journal , vol. 49, no. 1, Fall 2014, Dorsey & Whitney LLP, pp. 1-3.
What unique features and benefits does the Nokia Retirement Income Plan offer to its participants, and how can these benefits be maximized by current employees of Nokia of America Corporation? Additionally, what resources are available for employees to educate themselves about the various aspects of the plan, including eligibility, distribution options, and potential tax implications?
The Nokia Retirement Income Plan offers participants a defined benefit plan designed to provide financial security through retirement by supplementing Social Security and other retirement savings. Benefits can be maximized through strategies like ensuring accurate service records, understanding distribution options such as lump-sum payments or annuities, and consulting financial advisors to align these benefits with long-term retirement goals(Nokia of America Corpor…).
How does participation in the Nokia Retirement Income Plan facilitate financial security in retirement for employees, specifically in terms of pension benefit calculations and options such as lump-sum distributions or annuities? Moreover, what are some strategies that Nokia of America Corporation employees can employ to ensure they are fully prepared to utilize their retirement benefits as they transition towards retirement?
Participation in the Nokia Retirement Income Plan ensures financial security in retirement through pension benefit calculations based on service years and salary history. Employees can choose from options like lump-sum distributions or lifetime annuities. By carefully selecting a distribution option and incorporating it into a broader retirement strategy, employees can optimize financial outcomes(Nokia of America Corpor…).
With respect to changes in personal circumstances, such as marriage or divorce, what provisions does the Nokia Retirement Income Plan have to protect the benefits of employees from Nokia of America Corporation? How can employees navigate the complexities of Qualified Domestic Relations Orders (QDROs) within the context of their pension benefits, and what resources are available to assist them in this process?
The Nokia Retirement Income Plan protects benefits in cases of personal changes such as marriage or divorce through provisions like the Qualified Domestic Relations Order (QDRO). Employees can consult the Nokia Benefits Resource Center for assistance in navigating QDROs to ensure a fair division of benefits. Guidance is available for understanding the QDRO requirements and how they apply to their pension(Nokia of America Corpor…).
What steps must employees take to initiate the commencement of their benefits from the Nokia Retirement Income Plan once they reach retirement age? Furthermore, what are the important considerations employees need to keep in mind regarding the selection of a payment form and any potential impact this may have on their overall financial strategy during retirement?
To initiate pension benefits under the Nokia Retirement Income Plan, employees must submit a claim when they reach retirement age. They should consider factors such as payment form options (lump sum or annuity) and the impact on long-term financial plans. Choosing the appropriate payment form is critical to maximizing retirement income(Nokia of America Corpor…).
How can employees of Nokia of America Corporation ensure their beneficiaries are properly designated under the Nokia Retirement Income Plan, and what implications does this designation have for benefit distribution in the event of their death? Additionally, what steps should employees take to update their beneficiary designations in light of significant life events?
Employees can ensure their beneficiaries are properly designated by updating their beneficiary forms through the Nokia Benefits Resource Center. Proper designation affects how benefits are distributed in the event of their death, and it is crucial to update designations after life events like marriage, divorce, or the birth of a child(Nokia of America Corpor…).
In terms of compliance with federal regulations, how does the Nokia Retirement Income Plan adhere to ERISA guidelines concerning employee benefits, and what rights do employees of Nokia of America Corporation possess under these regulations? Also, how can employees exercise their rights effectively if they encounter issues regarding their pension benefits?
The Nokia Retirement Income Plan complies with the Employee Retirement Income Security Act (ERISA), giving employees the right to receive information about their benefits and hold fiduciaries accountable. If employees face issues with their pension, they can exercise their rights through claims and appeals, with recourse available through legal action if necessary(Nokia of America Corpor…).
How does the Nokia of America Corporation support employees who might be eligible for a disability pension under the Nokia Retirement Income Plan, and what specific eligibility criteria must be met? Additionally, what resources are available to assist employees in understanding this facet of their retirement benefits?
Employees eligible for a disability pension under the Nokia Retirement Income Plan must meet specific criteria, such as proving permanent disability before reaching retirement age. Resources like the Nokia Benefits Resource Center can provide guidance on the eligibility process and required documentation(Nokia of America Corpor…).
What specific actions should an employee of Nokia of America Corporation take when applying for a pension benefit under the Nokia Retirement Income Plan, and what documentation is typically required to streamline this process? Furthermore, in the event of a claim denial, what recourse do employees have to challenge the decision through the plan's appeal process?
When applying for pension benefits, employees should provide documentation such as proof of age and employment history. In case of a denial, they have the right to appeal through the Employee Benefits Committee. If necessary, employees can further appeal to federal courts under ERISA(Nokia of America Corpor…).
How does the pension benefit guarantee from the Pension Benefit Guaranty Corporation (PBGC) apply to employees of Nokia of America Corporation, and what are the limitations of this guarantee in protecting retirement benefits? Additionally, how can understanding these protections help employees make informed decisions regarding their retirement planning?
The Pension Benefit Guaranty Corporation (PBGC) guarantees benefits under the Nokia Retirement Income Plan in case the plan terminates. However, there are limitations, such as caps on benefit amounts. Understanding these protections helps employees make informed decisions about their retirement planning(Nokia of America Corpor…).
How can employees contact the Nokia Benefits Resource Center to gain more information about their benefits and the specific resources available under the Nokia Retirement Income Plan? What are the recommended communication channels and hours for reaching out to ensure timely and effective assistance?
Employees can contact the Nokia Benefits Resource Center through the Your Benefits Resources (YBR) website or by calling the designated phone line. It is recommended to use these channels during business hours (9:00 a.m. to 5:00 p.m. ET) for timely assistance with pension-related questions(Nokia of America Corpor…).
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