Laid Off From Bristol Myers Squibb? What to Do With Your Severance, 401(k), and Benefits
The quick answer
If you were affected by Bristol Myers Squibb's New Jersey layoffs, take these decisions in order: review your severance agreement before signing, plan for the taxes on your severance, lock in health coverage, confirm what happens to your stock awards and bonus, and take your time with your 401(k). Rolling it into an IRA is often a good move, but not always, especially if you're 55 or older or hold BMS stock in the plan.
What severance are you entitled to?
New Jersey's required severance: New Jersey law requires employers in a mass layoff to pay one week of pay for every full year you worked. You don't have to sign a release to get it. If you received less than 90 days' notice, you're owed four more weeks.
Your BMS package: BMS may offer more severance, continued benefits, or career help, usually in exchange for signing a release. Ask HR how it fits with the state-required amount.
Before you sign:
Check your deadlines: If you're 40 or older and part of a group layoff, you generally get 45 days to review and 7 days to change your mind after signing.
Know what you're giving up: Look for releases and any limits on future work.
Consider an attorney: Worth it for larger packages or long service.
How is severance taxed?
Severance is taxed like a paycheck. Federal withholding is usually a flat 22%, which may be too low if the payment pushes you into a higher bracket, so set aside extra for April.
Timing matters: BMS's latest cuts run from December 2026 to May 2027, so your severance could land in either tax year. A payment in a lower-income year can mean less tax.
What happens to your health insurance?
Check whether your package continues your coverage, and for how long. After that:
COBRA: Keeps your BMS plan for up to 18 months, but you'll likely pay the full cost.
Get Covered New Jersey: Losing job-based coverage lets you sign up for a marketplace plan within 60 days, possibly with subsidies.
Any health savings account (HSA) balance stays with you.
What happens to your stock awards and bonus?
Unvested RSUs and performance shares: Often forfeited, but BMS plans have historically given special treatment based on age and years of service. Ask HR about each grant.
Vested stock options: Find out your deadline to exercise after your last day.
Annual bonus: Ask whether you'll get a prorated bonus, and when.
What should you do with your BMS 401(k)?
You can leave it in the BMS plan, roll it into an IRA, move it to a new employer's plan, or cash it out. Avoid cashing out: you'll owe income tax and usually a 10% penalty if you're under 59½.
An IRA often makes sense because: you get more investment choices, can combine old accounts, and have more control over withdrawals and Roth conversions.
Keeping the 401(k) may be better if:
You're 55 or older: You can withdraw from the BMS 401(k) without the 10% penalty. Move it to an IRA and you lose that until 59½.
You hold BMS stock in the plan: A special tax rule can let you pay lower capital gains rates on the stock's growth, but only if you handle it before rolling anything over.
You make backdoor Roth contributions: IRA balances can make those taxable. 401(k) balances don't.
If you do roll over, use a direct rollover to avoid a mandatory 20% withholding.
What about the BMS pension?
BMS stopped adding new U.S. pension benefits in 2009 and transferred its pension plan to the insurer Athene in 2019. If you still have a pension benefit, Athene pays it, and your layoff doesn't change it. Keep your contact information current with Athene.
Should you file for unemployment?
Yes. Apply with the New Jersey Department of Labor right away. Depending on how your severance is paid, you may be able to collect benefits at the same time.
Your first 30 days
Read your severance agreement: Note every deadline.
Map your cash: Add up severance, unused PTO, and savings, and see how many months they cover.
Pick your health coverage: Compare COBRA to a marketplace plan.
List your stock awards: Confirm what vests and any deadlines.
File for unemployment: Don't wait.
Take your time on your 401(k): It's safe where it is.
Frequently asked questions (FAQs)
Can I put my severance into my 401(k)? Generally no, but you may be able to contribute to an IRA.
Do I have to roll over my 401(k) right away? No. You can usually leave it in the BMS plan while you decide.
Get help with your next steps
Leaving BMS and not sure what to do with your severance, stock awards, or 401(k)? Reliant Wealth Advisory is based in New Jersey and helps professionals make these decisions with a clear plan.
Click here or book a time below:
About the author
Michael Walstedt, CFA, CFP®, is the founder of Reliant Wealth Advisory, a fee-only fiduciary firm in Hoboken, New Jersey. He helps business owners, executives, and professionals in the New York/New Jersey area, as well as nationwide, with financial planning and investment management.
Reliant Wealth Advisory is not affiliated with Bristol Myers Squibb. This article is for educational purposes only and is not tax, legal, or investment advice. Plan details vary and may change, so confirm your specific benefits with BMS HR and your plan documents. Consult a qualified tax professional and attorney before acting.
