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Old 01-27-2017, 07:24 PM   #21
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and the reality may be that the taxpayers will have to contribute either way. if most of the retirees use that pension as their sole means of support, and they don't have money, they could possible need social programs (food stamps) to survive.....
If as a result of these pension reductions they qualify for food stamps or whatever based on their income I don't have any issue with them getting benefits that they are entitled to based on their income... so I guess I don't have a problem with a back door subsidization of those in need but am not keen on direct support to the ailing pension plan.
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Old 01-27-2017, 07:27 PM   #22
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But that is why the pension insurance corp should have been properly funded.

Lets try this idea: If your bank went belly up and you were counting on FDIC to cover their loss but the govt said "So sorry we didn't properly fund fdic you only get 50%" What would say to that?
Like I said earlier, I think it is more complicated than that with these multi-employer pensions. PBGC rules are different - I don't understand them, and I'm not sure why they are different, maybe thinking not all the employers would go belly up at once? Maybe someone here is under one of these plans and can explain.

While there are concerns about PBGC funding, I doubt that they wouldn't be able to cover this particular pension. But it sounds like the rules say it just doesn't apply, or coverage is limited, or .

I think it is more like they are getting the coverage they paid for, and this is it. Again, maybe someone has fuller info they can share.

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Old 01-27-2017, 07:30 PM   #23
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Not really a solution but just a thought that if taxpayer dollars can bail out the rich donor corporations surly the same should be done for those pensioners.
What is a donor corporation? What in the world are you talking about?
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Old 01-27-2017, 07:36 PM   #24
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What is a donor corporation? What in the world are you talking about?
The ones who line the pockets of the politicians.
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Old 01-27-2017, 07:40 PM   #25
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OK, I reread the article, not a lot of info there, but I'll take a stab at how I think this is working.

First, my single-employer pension (different rules) is insured by PBGC. MegaCorp and I have/are paid/paying into the insurance fund. My pension is guaranteed, but there is a cap on the amount (and no COLA). If my company cannot fund my pension, PBGC is there (hopefully) to fill in the difference between what MegaCorp can pay and my pension - up to the cap.

So, if my pension exceeded the cap (it doesn't), and MegaCorp went belly up, I could be in a news article saying my pension was cut.

What I think is happening here is, the PBGC guarantees for these multi-employer plans may be low relative to the pensions, and there may be COLA involved (my pension, or any PBGC payments are non-COLA). So they are cutting what is being paid from the corp fund, in order to stretch it out, so they don't run out of funds. If they run out, the pensioners would fall all the way down to the PBGC caps.

This is mostly guesswork on my part, but I have a feeling that's close. In made-up numbers, say a pensioner is now getting $70K, and PBGC cap is $35K. If they keep paying $70K, they run out in X years, and the pensioner is down to $35K. But if they cut to $50K now, they can hold out longer, maybe indefinitely, before they have to turn it over to the PBGC and the pensioners get cut to $35K.

So this law allows them to make that stretch cut, before just running out. And members need to approve it, so they can decide if that is in their best interests. But I would not be surprised if some hold out, hoping for some other form of relief.

I hope someone can confirm/deny this.

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Old 01-27-2017, 08:14 PM   #26
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I have a bit of time reading the PBGC site and agree it is a bit convoluted at best.
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Old 01-27-2017, 08:42 PM   #27
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Oh, it gets worse... see page 52 of http://www.pbgc.gov/documents/2015-annual-report.pdf

They had losses of $26 and $15 billion in 2014 and 2015, respectively... an accumulated deficit (liabilities exceed assets) of $76 billion at September 30, 2015 and charge plans premiums of about $4 billion annually.

Otherwise known as a house of cards.
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Old 01-27-2017, 09:27 PM   #28
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Oh, it gets worse... see page 52 of http://www.pbgc.gov/documents/2015-annual-report.pdf

They had losses of $26 and $15 billion in 2014 and 2015, respectively... an accumulated deficit (liabilities exceed assets) of $76 billion at September 30, 2015 and charge plans premiums of about $4 billion annually.

Otherwise known as a house of cards.
Just another finely tuned govt agency. Makes SS look like a shining star.
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Old 01-27-2017, 10:09 PM   #29
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But that is why the pension insurance corp should have been properly funded.

Lets try this idea: If your bank went belly up and you were counting on FDIC to cover their loss but the govt said "So sorry we didn't properly fund fdic you only get 50%" What would say to that?

From what I read before, these pensions are not insured by PBGC... which is why they need to fix the problems themselves....

IF they were paying into the insurance plan, I would agree that the insurance plan might kick in.... but, at the agreed upon rate, not whatever was promised when became underfunded...
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Old 01-28-2017, 01:31 AM   #30
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OK, I reread the article, not a lot of info there, but I'll take a stab at how I think this is working.

First, my single-employer pension (different rules) is insured by PBGC. MegaCorp and I have/are paid/paying into the insurance fund. My pension is guaranteed, but there is a cap on the amount (and no COLA). If my company cannot fund my pension, PBGC is there (hopefully) to fill in the difference between what MegaCorp can pay and my pension - up to the cap.

So, if my pension exceeded the cap (it doesn't), and MegaCorp went belly up, I could be in a news article saying my pension was cut.

What I think is happening here is, the PBGC guarantees for these multi-employer plans may be low relative to the pensions, and there may be COLA involved (my pension, or any PBGC payments are non-COLA). So they are cutting what is being paid from the corp fund, in order to stretch it out, so they don't run out of funds. If they run out, the pensioners would fall all the way down to the PBGC caps.

This is mostly guesswork on my part, but I have a feeling that's close. In made-up numbers, say a pensioner is now getting $70K, and PBGC cap is $35K. If they keep paying $70K, they run out in X years, and the pensioner is down to $35K. But if they cut to $50K now, they can hold out longer, maybe indefinitely, before they have to turn it over to the PBGC and the pensioners get cut to $35K.

So this law allows them to make that stretch cut, before just running out. And members need to approve it, so they can decide if that is in their best interests. But I would not be surprised if some hold out, hoping for some other form of relief.

I hope someone can confirm/deny this.

-ERD50


You're right. I'm not going to look it up but from what I remember....PBGC pays only 110% of pension. Kline - Miller act - Pensions cannot cut benefits to retirees over 80, disabled retirees, widow/widowers or terminated employees. All pension cuts after that must be equal across the board. Workers must vote BUT not voting counts as a yes vote, appointed actuary on the workers behalf must approve the plan and the Treasury Dept must allow.

The Kline-Miller act was threaded into existing ERISA laws. There is also an ERISA law that disallows pension increases in the previous five years if a pension has critical status. So any cuts under the new K-M act would be for a pension amount from five years previous?
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Old 01-28-2017, 07:24 AM   #31
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What song were you singing when wall street was bailed out?
Unfortunately, it was pensions, insurance companies, and publicly owned corporations that owned "wall street". Hence, their failure would have had even greater consequences. It was/is an ugly situation then and now.
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Old 01-28-2017, 08:34 AM   #32
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Here's a link to a CRS brief on PBGC https://fas.org/sgp/crs/misc/95-118.pdf and here's one to a Treasury FAQ on the Kline Miller Reform Act https://www.treasury.gov/services/Pa...sion-faqs.aspx

The biggest difference between how PBGC deals with single employer vs multiemployer pension is when a covered single employer pension fails, the PBGC steps in as new trustee, and in the case of the multiemployer pension, the current trustee continues. Like pensions themselves, this is complex stuff.
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Old 01-28-2017, 08:42 AM   #33
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My problem with this is the govt found the money to bail out the megas and continues to find money for the welfare recipients but tells the working man to go to hell.

Bingo! That's because the rich lobby and the poor organize. The rest of us complain on forums and social media.
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Old 01-28-2017, 08:47 AM   #34
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So they are cutting what is being paid from the corp fund, in order to stretch it out, so they don't run out of funds. If they run out, the pensioners would fall all the way down to the PBGC caps.
./.
So this law allows them to make that stretch cut, before just running out. And members need to approve it, so they can decide if that is in their best interests.
Certainly no pension expert here but this is how I understand it works as well.
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Old 01-28-2017, 09:03 AM   #35
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Not really a solution but just a thought that if taxpayer dollars can bail out the rich donor corporations surly the same should be done for those pensioners.
Tax revenues are already not enough to cover spending, where do you draw the line on deficit spending, and passing more and more debt on to your kids/grandkids - while our generation refuses to face facts and act? And as other have noted, the bailout was repaid with interest ahead of schedule, nothing like pension bailouts.
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Old 01-28-2017, 09:15 AM   #36
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Tax revenues are already not enough to cover spending, where do you draw the line on deficit spending, and passing more and more debt on to your kids/grandkids - while our generation refuses to face facts and act? And as other have noted, the bailout was repaid with interest ahead of schedule, nothing like pension bailouts.
Then suck it up and cut spending, as well as raise taxes - whatever it takes to pay the bills incurred. But it shouldn't be an option to just not pay contracted debt. Fix pensions going forward. But it's pretty unfair to put the burden mostly on those who did nothing wrong and held up their end of the bargain.

Do I get to stiff my plumber when his bill comes in after his work is completed?

We should all share in the collective decades-long mistakes made by continuing to elect crooked politicians (redundant?) instead of just stiffing those who've paid into and earned pensions, simply because it annoys the least number of voters (all pols really care about!).

Replace "pension" with SS or 401k taxation or any other income source that most of us have and the screams would be much louder about raiding what's already been earned. But I, for one, have had enough of hearing so many without a government pension just saying "Screw THEM! They never should've had those pensions anyway!"

Full disclosure: My spouse has worked 30+ years as teacher and had some rather drastic changes made to her pension in the last few years. But that doesn't make me biased, it just makes me pay attention to this. Contracts are still contracts, even if one side thinks they can just walk away after the other has upheld their end. That's a terrible precedent to set; it may satisfy the mob majority now (because most don't have govt pensions), but in the future, it could reach much wider.
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Old 01-28-2017, 09:32 AM   #37
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This is an emotional topic that affects almost all of us one way or another, so let's make an effort to keep the discussion friendly and respectful - and on an even keel.
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Old 01-28-2017, 10:05 AM   #38
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This is an emotional topic that affects almost all of us one way or another, so let's make an effort to keep the discussion friendly and respectful - and on an even keel.
You forgot to point out, "This is why we can't have nice things."
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Old 01-28-2017, 10:10 AM   #39
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Federal insurance, whether it's pensions or flooding, tends to pick winners and losers. The winners are usually the people whose assets were insured, the losers are, of course, the taxpayers.


IMHO, the best would be for employers to give a generous amount to their employees as part of the compensation package, which would be combined with the employee's own contributions. The total limit would be very high and indexed for inflation. The employee could choose non-taxable like an IRA or taxable like a Roth IRA, or some combination of both.

That plan would be managed by the employee. No employer, politician or other outsider could mess with it. I would give it legal protection in the event of lawsuits for all but intentional and very malicious actions.
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Old 01-28-2017, 10:12 AM   #40
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When I started with my final employer, I accepted the position with slightly less salary, but great benefits. Fast forward 10 years, and the board decides that the pension and 401K, combined with the health insurance, are too expensive to keep. It took 4 more years to work it out, but the pension was frozen, the 401K revamped (somewhat better, but not enough to make up for the lost pension), and health benefits reduced (less premium covered and much higher deductibles and copays, also retiree health coverage dropped for employees). This was beneficial for the new young hires (they want the big salary and don't care about benefits), but the existing older employees were disadvantaged. The $ I took for the first 15 years was lower to balance out the higher benefits. When the benefits were cut, there was no corresponding increase to the pay. This is the trade off that workers often make, lower current pay for future benefits. Unfortunately, employers don't always fund the ben fits, and employees get the benefits then demand higher pay. Don't get me started on government benefits (for the politicians primarily). When a pension plan is about to blow up, the management complains that it is the unions fault, the unions blame management, the lawyers sue everyone, and the retirees get screwed!
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