By Dolores Kong
The Boston Globe

BILLERICA - At the Doghouse Bar & Grill here in the
heart of high- tech country, where the talk over
drinks used to be about hot stock options and
skyrocketing IPOs, the conversation the other night
was more down to earth: What financial options do
people have if they lose their jobs?

"The way the recession or slowdown is going right now,
I'm sure all people are concerned about it," said Ann
Fitzgerald, 46, of North Andover, as she and fellow
tech employee Stephen Silvia, 29, of Ayer, sat at a
table and had a drink after work. Their jobs,
outsourced last year by Nortel Networks, are safe for

They and about a dozen others came to listen to
financial representatives discuss stock options,
401(k) rollovers, tax planning and other topics, as
part of a series of talks organized by bar owners
Noreen and Dan Lombard and Sam Kiefer, second vice
president, investments, for Salomon Smith Barney in

For Noreen Lombard, who remembers the heady barroom
conversations of a year or two ago, hosting the "Money
Talks" sessions is one way to help out her high-tech
clientele in these somber times. As she rattled off
the names of the nearby start-ups that folded and of
once- regular customers who don't come around anymore,
Lombard said, "I think it's worse than anybody

"The Route 3 corridor has been pretty badly decimated
with layoffs," agreed Kiefer as he introduced the
series at the bar last month. The series continues on
Mondays at 5:30 p.m. through late October. "If you're
facing layoffs, we can provide some pretty good
solutions," he said.

As the economy teeters into recession in the wake of
the Sept. 11 terrorist attacks and layoffs mount
across all industries, workers more than ever need to
know their financial options and right to benefits.

The Massachusetts unemployment rate crept up to 3.9
percent in August, and the state lost 10,100 jobs in
July and August, according to statistics released in
September. Since Sept. 11, companies nationwide have
announced job cuts totaling more than 100,000.

While the emotional turmoil of losing a job may be
overwhelming, financial specialists and worker
advocates say it's important to keep a cool head and
learn about your financial and benefit options.

"There's no socially accepted way to lose your job,"
said J. Damian Birkel, founder of Professionals in
Transition (PIT) Support Group, a North Carolina-based
nonprofit that helps employees who lose their jobs.

"Don't be afraid to use HR right after your downsizing
and throughout your severance period," he said.

There's a wealth of information you can find about
your financial and benefit options. Here's a rundown
of some of those options.

- Health insurance. If your employer provided
insurance, you may be able to continue coverage under
its group health plan for up to 18 months, although
you may be required to pay the full premium. This
continuation of coverage results from a 1986 federal
law known as the Consolidated Omnibus Budget
Reconciliation Act, or COBRA. You can become eligible
under COBRA whether you leave your job voluntarily or
involuntarily (as long as "gross misconduct" was not
involved), or if your hours of employment fall below
the level needed for company- paid coverage. You have
60 days to choose COBRA, or you lose all rights to

Massachusetts also offers health benefits for people
receiving unemployment through the Medical Security
Plan. For income-eligible people who had no health
plan through work, the state provides comprehensive
health coverage at no charge, except for some
copayments and deductibles. For income-eligible people
on COBRA, the state provides a monthly premium subsidy
of up to $120 for single and $280 for family plans. To
find out more, go to the state Division of Employment
and Training's Web site,

- 401(k) plan. The money you put into your 401(k) is
yours, but the availability of any company match may
depend on whether you've been there long enough to be

Under federal law, if you have less than $5,000 in
your 401(k) and you don't tell your former employer
within 30 days what you want done with the money, the
employer can issue you a check, minus a required 20
percent tax withholding. You may then also be subject
to a 10 percent early withdrawal penalty and
additional taxes if you don't deposit that check and
the missing 20 percent into an individual retirement
account or a new employer's 401(k) in a timely manner.

If you have a vested 401(k) balance of $5,000 or more
and you're under age 65, you can leave your money with
your former employer or roll it over at your
convenience into an IRA or a new 401(k). But if you
take a distribution, you may be subject to the 20
percent tax withholding and 10 percent early
withdrawal penalty, unless you meet certain

- Pension benefits. If you've worked long enough at a
company to be vested in a pension, those benefits are
forever yours even if you're decades away from
retirement, and even if the company ultimately goes
out of business. If you're losing your job, "this is
definitely the time to inform yourself about those
things," and gather together all the paperwork,
especially what's called the Summary Plan Description,
said Jeanne Medeiros, regional coordinator for the New
England Pension Assistance Project.

Even if you've already left a job, you're entitled to
a copy of the plan description within 30 days of a
written request. "That document is really invaluable,"
she said. The project, based at the University of
Massachusetts, Boston, and funded largely by the
Administration on Aging, has helped more than 2,000
people access more than $10.5 million in pension
benefits since 1994. New England residents can call
the project for help at 1-888-425-6067.

PIT's Birkel suggested that employees check when their
pension benefits might be vesting, to make sure those
won't be jeopardized by leaving the job too early.
Birkel found out the hard way. In 1987, when he lost a
department buyer's job in Cleveland after a new boss
came on board, Birkel was within one month of being
vested. "I didn't think to ask, `Give me another month
or is there a lower level position I can take?' You
could potentially negotiate your having them bridge
you. Many people don't even know it's OK to negotiate
when you lose your job, and to negotiate hard

- Severance pay. While some employers will give
severance based on how long an employee has worked for
the company, there is no requirement for such payment
under the federal Fair Labor Standards Act. But if you
believe your employment contract calls for severance
pay and it has been violated, you can contact the
Pension and Welfare Benefits Administration for
possible assistance. The administration's Boston
regional office, located at the John F. Kennedy
federal building, can be reached at 617-565-9600.

- Vacation pay. Under state law, an employer with a
paid vacation policy must pay people for vacation time
earned "under an oral or written agreement," whether
employees resign or get fired or laid off. The Fair
Labor and Business Practices Division Hotline, handled
by the state attorney general's office, fielded 87,000
calls last year on such topics as wages and overtime.
It can be reached at 617- 727-3465.

- Stock options. Once one of the hottest employee
benefits, stock options are now often worthless as
firms struggle, and employees face possible layoff.
But for people who may still be wondering whether to
exercise the options they still have, there are a
number of complicating issues to consider. For
instance, there are two types - incentive stock
options and nonqualified stock options - and each has
different tax implications.

Ray Anstiss Jr., a Lowell certified public accountant,
told Doghouse listeners about some of the tax issues
they need to consider. For instance, think about the
timing of the exercise, and the tax liability. Anstiss
mentioned the case of an employee who didn't think
before exercising all his options on Dec. 28, and
ended up with a tax liability for that year of about
half a million dollars.

Unemployment benefits. People filing unemployment
claims get a benefit of about 50 percent of their
weekly average wage, up to a maximum of $477 a week,
plus $25 a week dependency allowance for each
dependent child up to a limit. A claim can be made by
telephone or in person. For details, consult the state
Division of Employment and Training's Web site,, or call 617-626-6800.