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Navigating Real Estate Challenges: A Guide for Dominion Energy Employees Approaching Retirement

In recent years, the real estate market has witnessed significant fluctuations. Although a drop in home prices might initially appear beneficial for prospective buyers, it often points to deeper economic issues. According to a report by ATTOM , which analyzed over 155 million properties across the United States in the second quarter of 2024, certain regions are experiencing severe declines in property values. This downturn has increased the prevalence of underwater mortgages, where homeowners owe more on their mortgages than their properties are worth. Dominion Energy employees in affected areas should be particularly aware of these trends.

Underwater mortgages are especially common in ten states, mostly in the Southern and Midwestern regions. These areas have traditionally been lower-priced markets, yet they are now confronting economic challenges that deepen real estate troubles. States such as Louisiana, Oklahoma, and Kentucky, which have economies heavily reliant on fossil fuels, are experiencing slower growth as the demand for alternative energy sources rises. This economic slowdown, alongside rising unemployment and declining populations in these states, contributes significantly to the drop in real estate prices, potentially affecting Dominion Energy employees considering investments or residing in these areas.

ATTOM defines a seriously underwater mortgage as one where the loan-to-value ratio exceeds 125%. Their analysis highlights that economic downturns, natural disasters, and industry declines are primary contributors to this situation. Additionally, population movements, particularly from the Midwest and South to regions with stronger job markets and economic conditions, play a key role in driving down home values in the departure states. This could influence relocation decisions for Dominion Energy employees looking for more stable real estate markets.

Despite these challenges, there is potential for recovery. Market stabilization could ease the pressures of underwater mortgages. Rob Barber, CEO of ATTOM, notes a resurgence in buyer demand across the country during the summer of 2024, spurred by decreasing interest rates. This trend could signal a potential recovery in these troubled markets, presenting a timely opportunity for Dominion Energy employees to consider real estate investments.

States with the Highest Incidence of Seriously Underwater Mortgages (Q2 2024)

Louisiana – Tops the list with 10.5% of mortgages classified as seriously underwater.
Mississippi – Follows with 6.8%.
Kentucky - Reports 6.3% of homes with seriously underwater mortgages.
Arkansas - 5.4% of homes are significantly underwater.
Iowa – Alongside North Dakota, reports 5.0%.
North Dakota – Shares the same percentage as Iowa.
Oklahoma – Also reports that 5.0% of mortgages are seriously underwater.
West Virginia – 4.7%.
Illinois – 4.0% of mortgages are seriously underwater.
Missouri – Concludes the list with 3.9%.

This information is essential for understanding the dynamics impacting the property market, especially in states facing economic and demographic shifts. The focus on these regions underscores the relationship between energy policies, economic health, and real estate values. In some areas, residents face challenges that may require strategic responses to lessen the adverse effects on their financial well-being. Dominion Energy employees should stay informed about these trends for potential investment opportunities and financial risks.

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For individuals nearing retirement, the implications of falling home prices are particularly significant, especially when planning to downsize or relocate. According to a 2024 study by the National Association of Realtors , nearly 30% of retirees plan to sell their current homes to buy smaller ones in lower-cost areas. However, in states where the percentage of underwater mortgages is high, retirees, including those from Dominion Energy, may face financial difficulties if property values do not recover. This situation calls for careful timing and market research to make the most of retirement fund contributions from real estate assets.

Navigating the real estate market with falling home prices is akin to sailing a ship through unpredictable waters. Just as a captain must adjust their sails to maintain direction in a storm, homeowners—especially those nearing retirement—must carefully manage their real estate assets to maintain financial balance. In states suffering from high rates of underwater mortgages, this situation becomes more acute, resembling a ship navigating through a narrow strait with hidden shoals, where one misstep could lead to significant loss. Thus, vigilance and informed decision-making are essential to reach the shores of a stable financial retirement for Dominion Energy employees.

What specific factors should employees consider when evaluating their retirement benefits under the Dominion Energy Pension Plan, particularly those who were hired before July 1, 2021? Employees should understand how their age, final average earnings, and credited service impact their monthly retirement benefits. Additionally, what changes might be relevant for those who have transitioned to a different retirement plan under Dominion Energy since 2021?

Evaluating Retirement Benefits: Employees hired before July 1, 2021, should consider factors like age, final average earnings, and credited service when evaluating their Dominion Energy Pension Plan benefits. The formula for calculating benefits includes 1.8% of the final average earnings, multiplied by credited service, minus an estimated Social Security benefit. For those who have transitioned to a Cash Balance Pension Plan after 2021, the benefits are calculated differently, based on employer contributions to the employee's Cash Balance Account.

How does the Special Retirement Account feature within the Dominion Energy Pension Plan complement the traditional pension benefits for employees hired before 2008? Employees need clarity on how this account accumulates funds, the impact of contributions and interest credited according to IRS guidelines, and how it influences overall retirement income during their retirement years.

Special Retirement Account (SRA) Benefits: The Special Retirement Account (SRA) is an additional benefit for employees hired before 2008. This account is credited with 2% of an employee's pay each month and accumulates interest according to IRS guidelines. The SRA can be taken as a lump sum or an annuity, providing extra retirement income. Employees can choose to receive it alongside their traditional pension, enhancing their overall retirement benefit.

For employees considering early retirement options under the Dominion Energy Pension Plan, what are the potential financial implications? Specifically, how are benefits calculated for those who retire before age 65, and what penalties or reductions in monthly benefits must they be aware of regarding their overall retirement strategy?

Early Retirement Financial Implications: For employees considering early retirement, benefits under the Dominion Energy Pension Plan are reduced if taken before age 65. Specifically, the reduction is 0.25% per month for retirement between ages 58 and 60 and 0.50% per month for ages 55 to 58. This results in up to a 24% reduction in benefits if an employee retires at age 55, influencing their overall retirement strategy.

What are the steps Dominion Energy employees must undertake to ensure their beneficiaries are properly designated within the pension plan? This includes understanding the implications for both married and unmarried employees regarding survivor benefits and how to ensure that their wishes are reflected in the beneficiary designations as per the plan's requirements.

Beneficiary Designations: Dominion Energy employees should ensure their beneficiary designations reflect their wishes. For married employees, the spouse is automatically the beneficiary unless a different person is designated with spousal consent. Unmarried employees can choose any beneficiary, ensuring survivor benefits align with their personal circumstances.

In the event of a disability, how does the Dominion Energy Pension Plan provide support to its employees? Employees should understand the eligibility criteria for continued benefits, how credited service is affected, and the options available under both the Traditional Pension and Cash Balance formulas during periods of long-term disability.

Disability Benefits: Employees who qualify for long-term disability under the Dominion Energy Pension Plan continue to accrue credited service until age 65. Those under the Traditional Pension formula maintain eligibility for a pension based on their final average earnings and credited service, ensuring continued support during periods of disability.

How have the vesting requirements under the Dominion Energy Pension Plan evolved, and what does it mean for employees hired before and after July 1, 2021? Understanding these changes is essential for employees to assess their benefits and rights in relation to their service with the company, particularly if they leave before reaching the normal retirement age.

Vesting Requirements: Vesting for the Dominion Energy Pension Plan requires three years of service. For employees hired before July 1, 2021, vesting ensures non-forfeitable rights to pension benefits, regardless of whether they reach normal retirement age. Employees hired after July 1, 2021, are not eligible for the pension plan but may participate in alternative retirement benefits.

How can Dominion Energy employees effectively plan for retirement considering Social Security benefits? It is important for employees to integrate their expected Social Security benefits with their Dominion Energy pension projections, and to understand how each component contributes to their overall retirement income.

Social Security and Pension Planning: Employees should integrate their Social Security benefits with their Dominion Energy pension to ensure a comprehensive retirement income strategy. Using estimated Social Security benefits, employees can calculate how both sources will contribute to their financial stability in retirement.

What resources are available to Dominion Energy employees for estimating their pension benefits and planning their retirement? Employees should be informed about tools and websites like the Your Benefits Resource website, which provides insights into their pension information, including the ability to run benefit projections or request retirement estimates.

Retirement Planning Resources: Dominion Energy provides tools like the "Your Benefits Resource" website, which allows employees to view pension information, run benefit projections, and request retirement estimates. This helps employees plan effectively by estimating future benefits and understanding their retirement options.

Under what circumstances can Dominion Energy employees elect for a lump sum payment of their pension benefits, and what are the tax implications associated with such a decision? Employees need a thorough understanding of the consequences of taking lump sum distributions versus annuity payments, particularly regarding penalties and tax treatments in accordance with IRS regulations.

Lump Sum Payments and Tax Implications: Dominion Energy employees can elect to receive a lump sum payment of their pension benefits. However, lump sum distributions are subject to income taxes and may incur early withdrawal penalties if taken before age 59½. Rolling over the lump sum into an IRA or another retirement plan can defer taxes and avoid penalties.

How can employees at Dominion Energy get in touch with HR or the Benefits Center to clarify any questions regarding their pension benefits and retirement planning? It's crucial for employees to know the best methods to contact the Dominion Energy Benefit Center and the availability of service representatives to discuss their concerns or make necessary changes to their benefits.

Contacting HR and Benefits Center: Dominion Energy employees can reach the Benefits Center by calling 877-434-6996, Monday through Friday, from 8:00 a.m. to 5:00 p.m. ET. The Benefits Center provides assistance with retirement planning, beneficiary updates, and other pension-related inquiries, ensuring employees have access to support when needed(Dominion Energy_July 20…).

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For more information you can reach the plan administrator for Dominion Energy at 120 Tredegar St Richmond, VA 23219; or by calling them at (804) 819-2000.