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Old 03-09-2014, 10:34 AM   #41
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The question I kept asking was - were any of the private pensioners left with less than PBGC guarantees? I think the answer is "no", unless they go back in time before the PBGC was in effect.
The pensions I (and my wife) were associated with were all discontinued before we got close to retirement age. I cannot say if the offers we were made were less than the PBGC amounts or not, but I can say for sure that the actual value received was far far less than the value of the pension would have been, In a system (SmallCompany) which would have fully vested at 20 years a pension worth between 1 and 2 % of final three years salary, the plan terminated after 5 years produced a monthly pension (payable at age 65) of less then $20 per month. I assume the guarantees are better for people closer to retirement age. In a system (MegaCorp) that converted to a cash balance plan, the payout was less than half what the company should have been contributing yearly if it really was going to provide the promised benefit. I assume that with a MegaCorp of this size this was all vetted and legal - it certainly attracted lots of vigorous complaints, but they stuck to their low ball figures.

Pensions are great if you have one, but the promise of one is not something I would count on until you are sure it's going to pay out. The "guarantee" didn't do much for me.
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Old 03-09-2014, 01:03 PM   #42
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The pensions I (and my wife) were associated with were all discontinued before we got close to retirement age. I cannot say if the offers we were made were less than the PBGC amounts or not, ....
Well, the PBGC would not allow them to do less than what is required. If that were to BK them, that is when the PBGC takes over, with caps on the pension amounts (no reductions if you are under the cap).

So what you are describing is, Corp offered xyz pension benefits for several years. Then, going forward, they changed the way the plan works.

While we might all wish and dream that they would never reduce the system from the day we were hired, it is their prerogative.

Just the same as we look for raises and promotions as time goes on - but I'm sure the company would wish and dream they could pay us the same wage as the day we were hired. In times of full employment, the worker often has the upper hand. In times of high unemployment, employers have the upper hand.

My own pension got 'downshifted' a couple times (future benefits earned at a lower/slower pace). I never considered it a 'heist' or 'plundering'. I didn't like it, but my option was to go find other employment, and I decided to stay. I think we are all better off w/o these future promises that also end up being like 'golden handcuffs' (or some baser metals for those of us further down the food chain). Total compensation is more transparent if it is all collected in today's dollars.

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Old 03-09-2014, 01:14 PM   #43
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So what you are describing is, Corp offered xyz pension benefits for several years. Then, going forward, they changed the way the plan works.
In my case, they also were apparently given some latitude to determine the value of the promise made up until that point. As someone who was not actually collecting the pension, perhaps the PBGC guarantees didn't apply, but the actual value given in exchange for what had already been "earned" under the previous promise was much. much less than would have been expected. The company was free to make assumptions in the model about future value and indeed they did so in such as way to strongly reduce any payouts. None of these were union situations or negotiations, so the decisions were completely one sided and value was not just reduced going forward, but cleverly calculated to minimize value retroactively.
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Old 03-09-2014, 08:29 PM   #44
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That book has been discussed here before. From the responses, the book seems to frame things in such a way to rile up the masses. I'd suggest you keep plenty of grains of salt handy as you read.


Can we see some examples to support that it frames things to rile up the masses? Or where the author erred or misrepresented one of the examples she wrote about?
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Old 03-09-2014, 08:56 PM   #45
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I know there are people on here who complain about their pension at a private company being 'stolen' or some other such wording... but, the truth is that when you are young... it does not cost them that much... so when they freeze it or close it down, you do not have that much money set aside.. it just is simple math....

As ERD50 said, you had a choice... stay where you are at or move someplace else after they make that move... he mentioned that his got 'downshifted'....


Well, I was thinking about it and I have had a total of at least 4 pensions that were I was either 'paid in full', they were closed, they were reduced, or they were switched to a cash balance plan.... and then that cash balance plan was made worse... every time I would curse them a bit, take my money (if they sent it to me) and roll it over... and I stayed most of the time.... why, because I was getting a good wage and all my other benefits were also good... I was well compensated for the job...

I will say that I did like the 401(k) where they matched dollar for dollar up to 6%.... that was really good... I then worked at a place that was 4% and my last job was 3%..... it always seems to go down....
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Old 03-09-2014, 09:12 PM   #46
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Can we see some examples to support that it frames things to rile up the masses? Or where the author erred or misrepresented one of the examples she wrote about?
I'll suggest you search for the old thread. Been there, done that.

-ERD50
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Old 03-10-2014, 12:33 PM   #47
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I'm curious why you call this a 'huge change'?

If you were looking to retire in two years, how much affect could moving from a DB to a DC plan for two years make to you? How different are the plans? Are there certain 'gates' that you no longer hit?

-ERD50
Sorry for the delay here. I was very brief in my original posting. Retiring at 57 makes a lot more sense to me so it would mean two years of non pension credit accrual. So---I guess it's not huge to me but to a mid-career person with 15 years to go it's much bigger. Thanks!
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Old 03-10-2014, 12:37 PM   #48
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How does the 'new' retirement system compare to the executive retirement system?
Hi, the exec DB pension plan is essentially 50% greater than our pension plan. Roughly speaking for a 30 yr IT professional at 55 yrs old it's about $36K a year pension. So the execs (directors and above) get another $18K on top. The "C Series" are much higher of course. Thanks.
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Old 03-10-2014, 12:43 PM   #49
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I'm still at Boeing too. We expected the pension change was coming soon due to the recent contract with IAM union with a similar shift. Overall not a killer but definitely a reduction in total compensation. They are providing an additional 401k contribution which is nice, but according to my calculations much less personally. I have numbers but it wouldn't be prudent to share in public domain.

It is enough less that Boeing employees will have to adjust either working longer or saving more or live on less in retirement than they had been expecting. Not insurmountable situation, yet impactful nonetheless.

The Company will definitely save Billions as future liability. Good news is that this will help cash flow and earnings. I hope for a nice pop in BA stock. I'm hoping owning BA stock will outperform my loss in pension.

Hi Turbo---now that our plan will be frozen in Jan 2016 the million dollar question for folks located in Puget Sound (WA) is will the retiree medical remain in place. They "de-coupled" the pension from retiree medical in 2006 so I'm thinking they might make some changes there as well. It's ultra cheap at $20 a month from 55 to 65 (no kidding!!).
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Old 03-10-2014, 12:49 PM   #50
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Wife and I are Boeing engineers (speea represented). The writing's on the wall for our pension to be frozen in 2016 also. I'm 49 and wife is 50 and plan on retiring at 55. Due to the change, i've been crunching numbers (my spread sheets smokn!). I will have 14 years vesting and wife will have 25 vesting by 2016. A freeze in 2016 will reduce our combined monthly payout by 700/month.

I've learned by crunching the numbers, the pension (non cola'd) becomes less and less important to our finances as i get older due to inflation (meaning when we age to 85). The 401k looks amazing when you project it out to age 85 at an average 5% annual growth. Social security also plays a significant roll in propping up that third leg of the financial bench (hate using the word stool).

So summarizing my post, the frozen pension will have minimal impact to us.
Thanks Daydreamer. Many friends who are engineers and SPEEA as well. They also say the writing is on the wall--but wondering when your contract expires in 2016 if there will be push back from the members to maybe add some yrs of service to ER. The IAM deal added two years so at 58 it really means 60 with full bennies.

Good luck!!
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Old 03-10-2014, 10:56 PM   #51
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Hi Turbo---now that our plan will be frozen in Jan 2016 the million dollar question for folks located in Puget Sound (WA) is will the retiree medical remain in place. They "de-coupled" the pension from retiree medical in 2006 so I'm thinking they might make some changes there as well. It's ultra cheap at $20 a month from 55 to 65 (no kidding!!).

Ya I'm betting the retiree healthcare is next. It is an incredible value currently. Active employees had increases in monthly contributions last year.
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Old 03-10-2014, 11:05 PM   #52
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Thanks Daydreamer. Many friends who are engineers and SPEEA as well. They also say the writing is on the wall--but wondering when your contract expires in 2016 if there will be push back from the members to maybe add some yrs of service to ER. The IAM deal added two years so at 58 it really means 60 with full bennies.

Good luck!!

2016 will be a very eventful year for Boeing. The biggest being 100 years in business! That is impressive these days.
It certainly would be nice for SPEEA folks (Puget Sound area) to get a reasonable incentive to ER at contract time. Would be nice for us poor, non-exec management types too LoL. Toss us a bone.

Overall Boeing is a solid company with great benefits when you account for everything.

Now if this damn BA stock would double by say 2020 I will be stoked (Gen X term for you geezers)
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Old 03-11-2014, 07:03 AM   #53
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I will say that I did like the 401(k) where they matched dollar for dollar up to 6%.... that was really good... I then worked at a place that was 4% and my last job was 3%..... it always seems to go down....
I know a lot of people have been screwed with 401K matches being reduced or eliminated (temporarily or permanently), but I guess I was lucky as that never happened to me. My first Megacorp matched 60% of the first 8%, and my second Megacorp matched dollar-for-dollar on the first 5%. Even in the worst of the near-meltdown, that didn't change.

DW is currently getting an 8% contribution into a 403B whether she contributes or not. Takes some of the sting out of not getting much of a DB pension except for a small, old frozen one from my Megacorp #1.
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Old 03-11-2014, 08:59 AM   #54
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I've seen 401k matches reduced or eliminated for a time. However any matching that was already done, even if it wasn't vested, always remained in my account. Because I can SEE the balance, I know that they are not able to retroactively change the rules and take back a previously earned match. At worst, they can change the rules for future matches going forward.
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Old 04-09-2014, 01:58 PM   #55
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Takes effect in 2016. We knew this was coming but still a huge change. The salaried non-represented folks at Boeing were the next step after the machinists union voted to end theirs. Will need to evaluate if this effects my retirement date (I'm 53 and can retire early at 55).

Boeing to end pension plans for nonunion employees | Reuters
Update:

Below is the new pension estimates via the company portal tool. At 55 the "new" estimate is slightly higher now because of some IRS required adjustments to the older "heritage" pension accruals.

pen_comp_55_57.PNG
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