Article 43


Dealing with Layoff

Thursday, November 18, 2004

401K Choices after Layoff

Four Choices for You and Your Nest Egg

Published: October 29, 2004

By Jacqueline Fearer

While Chuck Yoke was in a hastily called office meeting a few years ago, a crew of professional terminators, along with members of his own staff, disconnected his phone, deleted his computer accounts, and deactivated his security access.

Back at his desk, he found a severance package and just enough boxes to hold his personal belongings. Before he left the building, his corporate credit card, employee identification badge, and laptop computer were seized.

While walking to his car, he remembers thinking that his calls and e-mails would remain unanswered—and that his 401(k) would never be fully vested.

“I felt depersonalized,” says the 46-year-old Denver information systems manager who, under the terms of his severance agreement, can’t identify the technology company that laid him off. “I’d had a sense that it was coming, but believe me, you can’t prepare yourself for the humbling, humiliating reality of being pulled into a room and confronted with an apologetic human resources representative who has been flown in to lay you off. It was a real blow to my ego.”

Although Mr. Yoke found another job within a month, he says it took some time to get over the shock of being considered “non-essential” by his employer. It could happen to you.

When leaving a company—voluntarily or not—you need to make decisions about your health, life, and disability insurance. But you also need to decide what to do with any vested assets accumulated in your employer-sponsored retirement savings plan, such as a 401(k), 403(b), or 457.

Oftentimes, employees receive little information from their former employers regarding their 401(k) distribution options—or the tax consequences associated with those options.

Employees, therefore, don’t know that they may have been able to leave the assets in their former employer’s plan, and they often have to seek advice from another source on where to put their money.

“Companies need to be proactive in providing information and education to their employees—at least enough to help employees feel confident that they’re making the right decisions,” says Steve Deschenes, executive vice president of Fidelity Investments Institutional Service Company.

Roberta Chinsky-Matuson, founder of Human Resource Solutions, a Massachusetts-based independent human resources consultant, advises her clients to always be prepared for their lives to take an unexpected turn.

“Take a look at where your money is going, and see if there are areas where you can cut back. Then tighten your belt and start to save more,” Ms. Chinsky-Matuson says. “That will help put you in a much stronger financial position to weather emergency situations or layoffs.”

If your employer were to cut you loose tomorrow, what would you do with your employer-sponsored retirement savings plan?

Depending on your age, the amount of money in your plan, and your long-term goals, you generally have four choices:

Leave the money where it is. Your employer’s plan may allow you to leave your vested 401(k) savings in the plan, provided you meet a minimum balance requirement—typically $5,000 in current 401(k) contributions; assets rolled over are not eligible.

Roll over assets to your new employer’s plan. After you land a new job, you can generally transfer your vested 401(k) balance from your previous employer’s plan to your new employer’s plan.

Roll over your assets to an IRA. Why would you choose an IRA over another employer’s 401(k)? One reason may be that IRAs typically offer a broader range of investments as well as more control over your assets.

Take a cash distribution. Unless you truly need the money to meet living expenses, cashing out your retirement plan usually is your last choice. In addition to forfeiting the benefits of tax-deferred growth, the IRS requires your former company’s plan administrator to withhold 20% for taxes from your total distribution.

Immediately after his fateful meeting with human resources, Chuck Yoke recalls being acutely aware that he was no longer in control.

“People I didn’t even know had made important decisions about crucial aspects of my life,” Mr. Yoke recalls.

But there are ways to cushion the blow. And there are things that can be kept safe from anyone else’s influence—such as what you ultimately do with your retirement savings. By making a few simple and sensible decisions over the course of your career, you just might prevent an unexpected job loss from becoming a life-altering experience.

Jacqueline Fearer writes for Fidelity and is a frequent contributor to publications available to Fidelity customers. E-mail any questions or comments to Investor’s Weekly at

Credit: Fidelity Investments

Posted by Elvis on 11/18/04 •
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Wednesday, November 10, 2004

Bouncing Back From A Termination

By George Blomgren

I have a good friend who lost his job last Friday - he was downsized. The way he reacted to this trauma is inspirational.

He got up at his normal time the following Monday morning. He showered, shaved, and put on his business clothes. He started working the phone immediately; calling everyone he could think of - friends, colleagues from previous employers, clients, vendors, church members. His basic request to each person was, “Can we sit down for a few minutes so you can share any thoughts you might have about my situation?” Tactfully implicit in this request was, of course, “If you know of any opportunities, I’d love to hear about them.”

There are many things worth noting in his story. By getting an early start Monday and dressing for work, he kept his momentum going. Additionally, he clearly understood that job hunting is a very important full time activity, and should be approached as such. He also recognized and tapped into the full breadth of the network available to him - potentially, almost anyone he knew.

He refused to fall into the “victim mentality” which would have been so easy after being axed - a mentality that can be terribly counter-constructive to a job seeker.

Perhaps the most important point about this story is that everyone he networked with could only be impressed by the work ethic, the positive spirit and the gumption he showed by climbing right back into the saddle.

It paid off quickly. After hearing from him, I confidently reached out to several of my colleagues who I thought would have something to offer. Many of his other networking leads felt likewise. Less than one week later, he already had several actual job opportunities targeted, and interviews arranged.

I confidently predict his biggest challenge won’t be finding another job quickly. It will be choosing between various lucrative and tempting offers.

It reminds me of a great quote I heard recently about sales. (Remember: job hunting is an exercise in sales and marketing. You’re the product and interviewers are potential customers.) The quote I heard - one that applies to my friend - was “In a sales situation, the customer’s perception of value comes not so much from what you are selling as how you are selling it.”

George Blomgren is an Operations Manager with THE BENEFIT COMPANIES. He’s been on both sides of the table, and now that he’s on the hiring side, he’s sharing his secrets of success to gainful employment.

Source: JOBSEEKERWEEKLY Nov 8 2004 issue

Posted by Elvis on 11/10/04 •
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Sunday, October 31, 2004

What To Do If You’re Layed Off

In today’s uncertain business world, continuous layoffs, dot-bombs, and technology shifts, one of our most common inquiries is asking what to expect when laid off. Whether you are a software programmer, a manufacturing worker, a high tech engineer, or a medical worker, no job is secure from outsourcing and insourcing.

When you are handed the proverbial pink-slip (when you are laid off), it is very important that you not go into panic mode. Stop, take a deep breath, think clearly, and start planning. Every step you take from the moment that you are laid off will protect you, your fellow Americans, and your financial future.

If you are not laid off yet, but you know that you will be laid off soon

Are you training a foreign replacement? Document! Document! Document!

Find out if your replacement will be working here in the U.S. or overseas in his home country. Find out what type of visa your replacement is using to work here in the U.S.

Documentthe qualifications of every worker in your group. In the event that you are laid off and you are replaced by foreign workers, you will need to know the qualifications, education and experience of every member of your group. Gather information about foreign visa workers - their full names, address, dates of hire, and the name of their original agency of hire. Any other information you can glean is always helpful.

Documentthe number of American workers laid off, the number of foreign workers laid off, and which positions they held. Documenteach worker’s pre-layoff job function and post-layoff job function. Documentthe job requirements and job descriptions.

Take home all personal possessions before the layoffs. Be discrete, as you do not want to give the impression that you are considering quitting. Many workers are laid off without being given a chance to clean out their desk, cubicle, or office.

If you believe you will be laid off in the future, start taking home your personal possessions today. Be as discreet as possible.

Put together a portfolio of your work. If you are laid off, you will be able to ask permission from your former boss to take it with you. This will help you secure jobs in the future.

Stay professional, keep your head up.

When you are laid off, especially in a bad economy, you and your family will experience an emotional roller coaster. No matter what, keep your chin up, stay proud, and stay professional. People will always remember the one person who lost his/her head and acted unprofessionally on the day of the layoff. Perhaps everyone will even laugh about it and say “I wish I had the guts to say/do that!” But rest assured, the person who acts out will be the person without a reference and without a job tomorrow.

First ask for references

When you are laid off, before handling any other business, be sure to obtain references. Ask your boss for a letter of reference, and ask him what he will tell potential employers when they call. Ask permission to take your portfolio to future job interviews.

Also ask your colleagues and any management with whom you worked for references and letters. Be open to writing your own letters and asking others to sign them. When layoffs occur, many people are stressed, tired, or very busy, and they often prefer you to writeyour own. As long as you are well-liked and honest, most people will sign them.

Get contact information from references who are also being laid off.

Register at your state unemployment office

If you are laid off, whether or not you are eligible for unemployment compensation, it is important that you register as an unemployed worker.

COBRA Insurance

Get as much information about COBRA from your current employer - even if you don’t think that you will need it. You may be tempted to go without health insurance because it is expensive. Don’t! Not even for a few weeks!

Also note that if you are living with a domestic partner or spouse, you may be able to get health insurance through their benefit plan.

Negotiate severance documents and package

If you are laid off, do not sign your exit agreement without talking to a qualified attorney. If you need help, CONTACT US.

Ask what type of financial, emotional, and career counseling the company is offering to laid off employees. Often companies only offer this to employees who request it. So if you don’t request it, you may be out of luck! If you believe you are strong enough to get through this without emotional or financial counseling, think again. Your spouse, children, and other family and friends will put pressure on you without even realizing it. Your spouse and children may also be affected emotionally, so they may need that extra support or counseling. Also, financial counseling can often offer alternatives to meeting those hefty payments that you may no longer be able to afford.

For more advice, read this excellent ARTICLE about financial advice for layed off workers.

SOURCE link.

Posted by Elvis on 10/31/04 •
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Friday, September 10, 2004

Effects of Corporate Downsizing

As they pass their 40’s, being re-employed becomes harder.  Van Buren’s (1996, p. 50) research shows that being fired is likely to mean the loss not only of upward career movement, but also of economic stability and self-respect. They feel like they are being sacrificed, not because their corporations were in serious economic trouble, but rather because the profits being made were not high enough.


Trust is one of the most valuable yet brittle assets in any enterprise. Over the long term, it’s far better for companies to downsize in a humane way.

“Corporations should remember that they are artificial creatures chartered by society. As such, they are subject to society’s values-and society’s approval can be withdrawn at any time” (Van Buren III, 1996, p. 50).  All the more reason to do it humanely.


A key factor for employees who lose their jobs is often an organization’s severance package. Being displaced from a company is a devastating experience. Studies have shown that a generous severance package sends out a message to the employee kept on, that the company does care and provides for displaced workers. As Misha, et, al (1998) sees it, survivors will judge a company’s future interactions with them on how fairly it treats those laid off.

Developing a humane and dignified outcome for these displaced workers should be one of a company’s primary goals for each displaced individual within the organization. A way to increase the morale of each displaced worker within the organization is to have them gain control of their lives. 

Nothing saps a person more than a feeling of “lost control” in obtaining a job. “Workers’ control stabilizes employment, and, hence reduced the impact of an exogenous shock which reduces employment” (Doucouliagos, 1997, p. 175). Turnley and Feldman (1998, p. 82) look at how a company’s unfair actions cause low morale and a decrease in productivity. “In the case of organizations undergoing downsizing and reorganization, respondents’ comments highlight the negative reactions to perceived unfair layoff procedures”.

Using an organization’s position to retrain, having an out placement service, and having financial counseling for the displaced employees should be a primary concern for an organization in the middle of downsizing.

Leana, Feldman and Tan (1997) hold a contrary view of severance packages to displaced workers. In their research of laid off workers, they found that corporate assistance programs may have some unintended consequences for coping behaviors. A severance package given to individuals in a downsizing is meant to lessen the blow of being without a job. With this severance package, displaced workers should have time to look for a new position. These authors note, however, that substantial severance pay reduces the respondents’ sense of urgency to look for a job. On the other hand, other studies cites have shown that even after a displaced employee finds a new position, the pay is substantially less than what they were making in their prior position. Quite often these individuals who do find a new position are quite often under immense economic and social pressure to accept any job even if the wages are substantially lower than what they were making.

Employers know that these individuals are in dire need and will often offer less to them because of their situation. “The unemployed could be particularly vulnerable to distinct hiring discriminatory practices, as the reward for their human capital will depend on the subjective and discretionary evaluation made by the prospective employer who is typically, in a superior bargaining position” (Mavromaras & Rudolph, 1997, p. 814).


Posted by Elvis on 09/10/04 •
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Coping With Unemployment

On a daily basis you check your email to see if your sixteen different job search agents have returned that dream job. You send your resume to at least five positions a day. Heck, you even look in the Sunday newspaper! The media tells us that the economic recovery has begun. Companies are hiring. People are optimistic. Yet you are still unemployed. 

If you’re out of work, particularly if you’ve been looking for a job for quite some time, it’s easy to get discouraged. After all we define ourselves so much by what we do. How many minutes after you meet someone for the first time, do you ask him or her, “so what do you do for a living?”

Even those that support you, family and friends, can unintentionally create problems. How many times as a job seeker have you heard, “so, have you found anything yet?” If you’ve been unemployed a while, it’s easy to take that the wrong way. can help you cope with being unemployed and set the stage for job search success.

1. Budget - Now that may sound fairly obvious, but you need to understand what your expenses are and how you can control them. Do you really need two ISP’s? Can you really watch all those channels on premium cable? Or how about that daily double decaf soy Latte down at Starbucks? You need to prioritize where you are spending your money.

There are certain expenses you may not be able to control such as rent or a house note. But for expenses like credit card debt, examine your statement to see if you ever automatically signed up for a payment protection plan. Chances are your credit card company may have enrolled you, if your balance has been over a certain amount. Take advantage of that, many of those plans will allow you to suspend payments temporarily.

The key to a budget is to put it on paper. Whether you create an Excel spreadsheet or scribble it on a note pad, having something that you can look at and change is a great help in developing a budget that will last.

2 .Routine - What does being employed really do for us? Besides a paycheck, it gives us a schedule. Being unemployed should not be different. You should stick to the same pattern you had when you were working. Resist the nightly temptation to watch Leno and get plenty of sleep instead. 

During the week, actually set your alarm clock. Pick a time to get up and get ready as if you were going to work. Does that mean you need to put on business professional clothes? Not necessarily, but hey, if it helps keep you focused then why not.

Being ready for work every day means that you can respond to an interview request quickly. Also, by keeping a schedule, you will have an easier time of transitioning back to the work world. And you won’t scare your new co-workers by looking like a sleep-deprived zombie your first week on the job.

3. Exercise - If you’ve been unemployed for any length of time, you’ve probably become use to wearing your sweats or some other sort of casual clothes. Funny, when you go to that interview, your suit feels a little tight. Although you wish you could blame your dry cleaner for shrinking your best interview suit, you know you can’t.

You don’t have to join a gym. You can exercise by taking a walk in a nearby park or dusting off that old Richard Simmons tape. In addition to exercise, watching what you eat can help as well.

Regular exercise and consistently eating right can help make sure that interview suit fits a little better. But it’s the added bonus of staying healthy during a stressful period in your life that is most important. 

4. Keep informed - Watching the latest Jerry Springer or keeping up with All My Children is not something that will keep you up to date on current events. Staying current on what’s happening in the real world is what keeps you connected. 

Whether you read the paper, surf the Internet, or frequent your local library, challenge yourself to learn about what is going on in the bigger picture. At the very least make sure you keep current on business trends. Being unemployed means that you need to be keenly aware of what factors are affecting the marketplace, especially in your industry.

Doing research can give you ideas on what industries are growing and what companies are hiring. And you will also be able to engage in the “small talk” that often precedes an interview. Whether it’s the recent landing on Mars or discussing the 11 Oscar Nominations that Return of the King received, chitchat like that can help ease the tension when you’re meeting a recruiter or hiring manager.

5. Volunteer -­ When you’re working, you always say to yourself, “I think this organization or cause is worthwhile and I should really help out.” Perhaps while you were working you helped with your money, now you can help with your time.

Becoming a volunteer should be a commitment that will last beyond your unemployment. So examine it seriously, before you decide to do it. Most organizations that rely on volunteer help will welcome anyone, no matter how much time he or she donates. But again, explore carefully how you can contribute during your unemployment and then what you can do after you start to work again.

Besides being a wonderful networking opportunity, it is great to have that sense of accomplishment. Try this site to help find that right volunteer opportunity:

6. Support Groups - No matter how well meaning your wife, husband, parents, in-laws, or friends are, if they aren’t unemployed, they will find it hard to understand what it’s like to be out of work. That’s not to suggest that their support is not needed or welcomed, but sometimes you need to seek out others who are also unemployed.

This idea may seem overly dramatic and some folks may not need it and that’s okay. For those that do just remember to start simple. If there were other people that were laid off from your company, call them first. Check in on them. Find out how they’re doing. If you think it would be worthwhile to get together, then do it.

Some people you encounter will be negative, frustrated by their lack of success in finding work, they will likely try and infect you with their bad attitude.

The long-term value outweighs the risk since this can be another networking opportunity. After all a job that might not be a fit for them, may be for you and vice-a-versa. And it is reassuring to know that there’s another person or group of people going through what you’re going through.

7. Entertainment - Yes that’s right, entertainment! You need to find a way to have fun. Whether it͢s reading a book, playing a game, or watching TV, you need to work at making sure that some form of entertainment is part of your week.

You need to figure out a way to include entertainment in your budget. Even if it means clipping coupons, going to Happy Hour and eating bar appetizers at half-price, or waiting till that first-run movie hits the cheap theaters, you need give yourself permission to relax and enjoy life.

Looking for work is a full-time job. Like any job, you need to have a break. So don’t short change yourself and feel guilty about goofing off every once in a while.

Whether it’s managing your budget or planning something fun, the goal is to keep you focused. Without that focus it is easy to get discouraged. The first thing that you lose when that happens is your attitude.

The bottom line in keeping a positive attitude while you’re unemployed is to remember the bigger picture. People get interviews because their skills match the job requirements. People get jobs because they have great attitudes.

The author, Wayne Rainey, is human resources professional with 9 plus years of diverse experience in both corporate recruiting and the temporary staffing industry. Wayne can be reached via email at and welcomes any questions from fellow job seekers who may want a recruiter’s perspective.


Changing Your View Changes Everything!

Its like that when you lose your job, too. When I was fired from my first professional job, I thought my future had collapsed. That woe-is-me perspective blocked my ability to see that what happened had opened, not closed, opportunities. In time, my view broadened, and my understanding emerged.

Not only did I come to realize I disliked the job and wasnҒt good at it, but I was also ill-suited for it. I thought I could do anything, but I couldnt. I chose wrong. Once my self-awareness (and self-esteem) came to terms with why it happened, my view shifted, and so did my future.

Changing Your View

You can wait for perspective, or you can develop it. Like an architect taught to design by looking at something within a narrow context first, and then viewing it from wider and wider angles, we can learn to see our own life situations from different and wider vantage points; we can grow ғnew eyes, as it were.

Changing your view may take time, but you can start by nudging yourself toward new perspectives using these approaches:

1: The once-a-week, step back approach

Force yourself to step back from a narrow job-loss vista, in order to gain perspective at least once a week. Volunteer at a hospital, work with a charity, organize a community event, read to disadvantaged children, or help that elderly neighbor. Be of service.

ItԒs easy to lose perspective of whats going right in life. Keep your view clear. Or in the words of Mahatma Gandhi, ғThe best way to find yourself is to lose yourself in the service of others.

2: The see-the-world anew approach

Never taken a yoga class, read a mystery, or planted a garden? Always gravitate to the same websites, read the same magazines, or frequent the same establishments? Venture out. Drive back roads to the grocery store, take a class you never imagined, or learn to paint. You canԒt change your view to reboot career prosperity, make new connections, or notice hidden opportunities unless you replenish your soul and grow new learning pathways along the way.

3: The reframe-the-picture approach

Woe is me or an opportunity to retool? Personal tragedy or personal growth? Permanent scar or catalyst for a dream-pursuit? How you see your life is how you live it. What frame have you put around your job loss? Is it helping or hurting your personal view of your future?

Lee Iacocca said, “In times of great stress or adversity, it’s always best to keep busy, to plow your anger and your energy into something positive.” Thats true, but as you do, keep reframing the picture.

Go Beyond the Frog

The frog in the well, described by Mao Tse-Tung, captures the thought, ғWe think too small. Like the frog at the bottom of the well. He thinks the sky is only as big as the top of the well. If he surfaced, he would have an entirely different view.

When we suffer job-loss, we see the world from the vantage point of something taken away, something lost, something stolen from us. Yet, when we nudge ourselves to broaden our perspective and remerge from that well-of-loss to a larger world of opportunity, thereԒs a profound shift in our energy and our outlook. Thats because changing your view, changes everything. Try it!


Posted by Elvis on 09/10/04 •
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