Decreasing Retirement Benifits

[yakers]

The LA Times had an interesting article about decreasing medical benefits in retirement:

http://tinyurl.com/pmmxa

Looks like we will see more of this but I am not sure why this is happening when the companies are very profitable.

 

[Lazarus]

Because companies don't care about employees. They are a commodity that is bought on the market as cheap as possible. With the off shoring of manufacturing and many other jobs there is downward pressure on wages and benefits in the U.S. The government is doing nothing to stop them.

 

[uncledrz]

The LA Times had an interesting article about decreasing medical benefits in retirement:

http://tinyurl.com/pmmxa

Looks like we will see more of this but I am not sure why this is happening when the companies are very profitable.

Lower costs increase the bottom line.

 

[Mr._johngalt]

Because companies don't care about employees. They are a commodity that is bought on the market as cheap as possible. With the off shoring of manufacturing and many other jobs there is downward pressure on wages and benefits in the U.S. The government is doing nothing to stop them.

Nor should they, and I would feel that way even if I was still working.
Most of the time the government should just stay the hell out of it.

JG

 

[jeff2006]

Most of the time the government should just stay the hell out of it.

JG

Sure would make it easier for corporations to fleece the average Joe, as God evidently intended . . .

 

[Mr._johngalt]

Sure would make it easier for corporations to fleece the average Joe, as God evidently intended . . .

I am firmly on the side of the corporations. They should focus on making money. In the long run this will help the average Joe as well as everyone else.

JG

 

[Telly]

I have had horrible thoughts about all this. We all want to pay as little as possible for stuff, or services. Back in the early '70's was the first little movements to move factories to the lower labor cost non-union South, or overseas. Just small amounts way back then.

Has the relatively low rate of inflation for the last XX years been due to globalization, and domestic cost-cutting to keep up (or, down, I guess) with globalization? 

So, in effect, by keeping prices down, we just kissed goodbye to many of our benefits?

 

[modhatter]

Companies are cutting back because health insurance is out of hand. Our costs here in the US exceed all other countries, and there is not sufficient justification for the inflated costs.
I was in Phoenix, AZ. a couple of years back and had to go to the emergency room.

As my condition was not life threatning, every time a patient was brought in with a more severe matter or drug overdose, I was made to wait (not complaining on this) However, I was situated right next to the area that you check into when you go there. In every case, I heard "no insurance". I would say at least six times while I waited. When I finally got out of there, my bill was almost $900 (it involved an ekg)

The comment from the nurse was. "I'm sorry, someone has to pay for all the people without insurance."

That is a true story. I don't think people realize how many people out there do not have insurance, and either they get free medical help like just mentioned, or they get on the State Program where they get free medical insurance or pay a very, very small amount. It is only reasonable then that we must pay for their insurance. Right

 

[MasterBlaster]

It is not just retirement benefits that are getting cut back. It's pretty much all medical treatment.

Increasing medical prices make everyone mad.

Companies look at the total compensation cost going up and up and get mad.

Customers and patients get mad cause they have to pay more and more and wait longer and get pushed into worse and worse insurance coverage.

Medical practioners get mad cause they have to increasingly do more with less and are limited it the options that they can provide for patients.

 

[jeff2006]

I am firmly on the side of the corporations.  They should focus on making money.  In the long run this will help the average Joe as well as everyone else.

JG

Ordinary platitude . . . first time I heard this was in the third grade, as I recall. Another one is "the harder I work, the luckier I get." Both are typically espoused by late-middle-age white guys who lucked onto the gravy train.

 

[Zoocat]

I am firmly on the side of the corporations.  They should focus on making money.  In the long run this will help the average Joe as well as everyone else.

JG

All I have to say about this is --- Enron. Worldcom.

 

[modlair]

Not clear to me why folks would encourage corporate management to backstab their 80 yr old widowed shareholders who depend on dividends for income by pursuing a business strategy that increases costs.

 

[jeff2006]

Especially when they could backstab everybody in sight so that CEOs can make hundreds of millions . . .

 

[HFWR]

But they're worth every penny... :

 

[Running_Man]

Re: Decreasing Retirement Benefits

The reason for decreasing retiree benefits is primarily due to the FASB ruling where the accounting standards board ruled that retiree benefits needed to be listed on the balance sheet as a liability. At the same time court rulings came in that a promise of retiree health care was not binding and could be rescinded at any time.

The result is there is a financial gain just sitting on the balance sheet of all these corporations that will drive the price of the stock up when retiree benefits are curtailed or eliminated as the amount of the accrual is reduced. It creates a one-time accrual reversal of the reserve but more importantly lowers the ongoing expense which gives the impression of improving the operating costs and the potential for further gains when in reality it is just a one time wage cut.

The major beneficiaries are typically the few top executives who own millions of shares of stock either directly or indirectly through stock options with a zero basis and make millions on each incremental increase in the stock price while also get to make the desicions on whether to continue the health plan. Of course those individuals will have no trouble paying for their retiree health plan.

I see no problem with a corporation not offering a retiree health plan, I feel the court ruling of being able to withdraw a health plan at any time despite company letters sent to employees that they will have health care coverage to be very misguided.

As I live in Northwest Indiana I have seen many tens of thousands of steel workers take early retiree packages that promise pension and health care and then 2 years later have the company drop it on the government and drop health care. Many of the telecommunication companies did the same thing and were allowed to reopen doors without paying their promised benefits. In my mind those companies should have been disbanded and assets sold to meet the promised made. New companies not offering benefits could then fill the void rightly and justly.

There is an old rule that should be followed by individuals and corporations alike:

Say what you will do and do what you say.

 

[Nords]

Re: Decreasing Retirement Benefits

I see no problem with a corporation not offering a retiree health plan, I feel the court ruling of being able to withdraw a health plan at any time despite company letters sent to employees that they will have health care coverage to be very misguided.   
Say what you will do and do what you say.

The U.S. military had to lose that one all the way to the Supreme Court and then start all over again in Congress...

 

[Momtwo]

Tell me about it! My DH was taken into the emergency room here in the Phoenix Valley by ambulance with possible heart problems. He had had 5 by- passes a year before. They did an EKG in the hall near the ambulance entrance and put him in the waiting room for 16 hours before he was seen. The waiting room was full of people without insurance(who by the way a nurse has told me, they take first to try to get them in and out). The few of us with insurance were made to wait for 16 or more hours. And no one is doing anything about the illegal problem in this country that is clogging our emergency rooms and putting strains on our schools and other services. Emergency rooms are used in place of Dr's visits here. Illegals would be turned away by a Dr. or any one else without insurance. I am totally disqusted with the entire situation.

Momtwo

Companies are cutting back because health insurance is out of hand.  Our costs here in the US exceed all other countries, and there is not sufficient justification for the inflated costs.
I was in Phoenix, AZ. a couple of years back and had to go to the emergency room.

As my condition was not life threatning, every time a patient was brought in with a more severe matter or drug overdose, I was made to wait (not complaining on this)  However, I was situated right next to the area that you check into when you go there.  In every case, I heard "no insurance".  I would say at least six times while I waited.  When I finally got out of there, my bill was almost $900 (it involved an ekg)

The comment from the nurse was.  "I'm sorry, someone has to pay for all the people without insurance."

That is a true story.  I don't think people realize how many people out there do not have insurance, and either they get free medical help like just mentioned, or they get on the State Program where they get free medical insurance or pay a very, very small amount.  It is only reasonable then that we must pay for their insurance. Right

 

[Lazarus]

I am firmly on the side of the corporations. They should focus on making money. In the long run this will help the average Joe as well as everyone else.

JG

Corporations exist for the purpose of making money. They have no other reason to exist. They also have no morals. They after all are nothing but an algorithm for making profit. If they were actual humans they would be regarded as psychopathic. The single minded drive to make profit at the expense of whatever is in the way would mark them as a defective individual. They are not living, breathing, human beings. Like their employees who supply the brains and brawn to make the money.

Governments, Corporations, Churches, Families, ect. Exist to make life better for the human beings that are their members.

If they do not do so, then what is the point?

Governments are a construct of the people, at least in the United States. A Representative Republic. They should serve the interest of the people not the wealthy corporations which are nothing but a money machine.

I don’t buy that promising benefits such as pensions and health care to retirees in exchange for a lifetime of work, then reneging on the promise when they have no time to make it up is acceptable. It is morally wrong even if it raises profits.

It is the elected Governments responsibility to rein in these behaviors and protect the people who voted for them. Or it is time for a new Government.

Corporations are unable to focus on anything but profit by their nature. Are we willing to settle for that?

Disclaimer:

I work for one of the very largest corporations in the World. And I am a conservative by most measures.