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Old 12-24-2017, 03:46 PM   #21
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DF had a pension that was still paying in 2017 as the day he retired in 1986. He cleaned up on company profit sharing, though, especially the company stock (which he thankfully sold many years ago). DM even got a pension from his megacorp just for being a spouse. I still recall when she became eligible and DF had no say on HER money for the very first time in her life.

I never had a DB pension so I always socked as much away in both IRAs and 401(k)s. One place I worked had a nice old engineer who’d been there forever and I asked someone why. He said that the company gave everyone the cash value of the old DB plan and switched to a 401k, and most of the old hands were shocked at how little it was and had to keep plugging along. Yikes!

The takeaway I got from this article and other similar ones is that it isn’t very fair to have promised employees a pension for decades and then pull the rug out, but hey, that’s the way it is thesse days. A recent “Hi, I am...” post from a young dreamer mentioned a pension and I thought to myself that he shouldn’t count on that being there in 20-30 years.
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Old 12-24-2017, 04:02 PM   #22
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For me, my pension is one of 3 "reinforcements" waiting for me as I near and enter my 60s, just about 5 years from now. It's a frozen pension, as my of company froze their pensions in late 2001 and began a crummy cash-balance program in its place.


I had begun working part-time in mid-2001, so my pay was greatly reduced compared to what is was in my 16 full-time years the pension was based on. Freezing my pension also reduced any incentive to keep working, not that there was a lot of incentive to begin with throughout the 2000s.
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Old 12-24-2017, 04:27 PM   #23
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My mega megacorp recognized halfway thru my career that they couldn't sustain the union workforce's defined pension program out of a cyclable business' roller coaster profitability.

The good news was the pension fund investment ROE was about as as good as any other US megacorporation. And it was nice to have top benefits, a defined pension, a 401k and personal IRAs going into FIDO monthly.

And then everyone 55 years old or older in 2008 was sent "to the house permanently.". Thank you!

I would hate to be 25 years old today beginning building a retirement portfolio with the stock market at an all time high--with interest rates at an all time low.
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Old 12-24-2017, 04:32 PM   #24
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And the kids cannot inherit the pensions such as they were from their parents. However, money left in an IRA or 401(k) can be passed down to heirs.
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Old 12-24-2017, 04:35 PM   #25
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To the extent that long-time government workers increase as a percent of the workforce, the numbers with pensions grow.
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Old 12-24-2017, 04:53 PM   #26
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Preview of the US without pensions

What a shock to the retired executives at Westinghouse when they lost their pension this year.

The Westinghouse executive pension plan was non- qualified so the bankruptcy judge stopped paying them when the current executives' decisions bankrupted the company.

Add to the sting, this was deferred salary compensation they lost that could have been personally invested or enjoyed.

Regular employee pensions are qualified and not impacted.

https://www.reuters.com/article/us-t...-idUSKBN18L2AF
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Old 12-24-2017, 05:04 PM   #27
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The article seems to talk only about private-sector pensions. Meanwhile, in the public sectors, 93% of workers are offered defined benefit (!) pensions. And not much fear of them being cut: in Oregon, where unaccountable and over-generous lawmakers granted workers a defined benefits packaged that threatens to bankrupt the state and school system, courts have ruled that once-promised benefits can not be rescinded.
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Old 12-24-2017, 05:08 PM   #28
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My Megacorp froze the pensions years ago. Nice to have one, even if it is small.
Same here. It is about $1200 a month, but on top of SS, it covers most of my expenses.
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Old 12-24-2017, 05:14 PM   #29
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I know I've posted this before, but my agency's HR department holds lots of retirement seminars. Mr. A. and I got some good info out of his, back in the 1990's...it was the first time either of us had heard of "Dollar cost averaging." We knew about index funds but had been reluctant to put much in them, as the stock market seemed high at the time.

Then, the year he retired, I hit 15 years in, and was offered a 2-day,"mid-career" seminar. HR brought in financial advisers and people who were experts on the federal retirement system. They were not allowed to push their businesses during the seminar, but of course their payoff was that employees could contact them later on. The message I best recall was the HR reps telling us that Congress could change our benefits at any time (as they had in 1984) and that even those of us covered under the older Civil Service retirement system should not count on our pensions to be enough for retirement, but should be putting money in the TSP and in private investments, too.

If a Federal agency was willing to caution its employees about the potential risks of a U.S. Govt. pension, it's really a shame that private companies didn't try to prepare their employees for the risks that a private pension is heir to.
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Old 12-24-2017, 05:24 PM   #30
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To the extent that long-time government workers increase as a percent of the workforce, the numbers with pensions grow.
Actually, not in all cases. Anyone who begins with the State of NC in 2020 will be eligible for a pension but no longer health insurance. By 2025, I expect the legislature will convert future Pension $ to 401k contributions instead.

The real problem is that States still need to pay "promised benefits" to retired employees.

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Old 12-24-2017, 05:41 PM   #31
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What a shock to the retired executives at Westinghouse when they lost their pension this year.

The Westinghouse executive pension plan was non- qualified so the bankruptcy judge stopped paying them when the current executives' decisions bankrupted the company.

Add to the sting, this was deferred salary compensation they lost that could have been personally invested or enjoyed.

Regular employee pensions are qualified and not impacted.

https://www.reuters.com/article/us-t...-idUSKBN18L2AF
You might add that this was the supplemental pension plan that paid benefits above the limits specified by ERISA (currently wages over 250k are not covered by qualified) Most companies provide supplemental retirement plans for executives and the like who make more than 250k for pension and an equivalent for 401k called a supplemental retirement plan. This is how the huge listing for deferred comp for the top 5 execs is reached. In addition they have a deferred income plan where an exec can also differ say part of the bonus and leave it with the company. (I suspect the Westinghouse execs lost this also)
These plans are spelled out in the company prospectus discussion of top 5 execs compensation. Congress chickened out on ending the deferred comp plans this year as it was in the original docs but the lobbyists must have gotten to them.
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Old 12-24-2017, 05:50 PM   #32
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What strikes me most about the profiles of the MDD workers (who, in this story, are meant to represent everyone in similar situations) is the unfairness of how they were treated. It’s very sad.

I know we all make our own choices, LBYM, save, learn to invest, blah blah blah; and, therefore, think everyone else can do the same. But, the fact that these folks could be subject to such treatment with little/no recourse, is very disappointing to me.

In the end, I suppose we’re all just one catastrophe from being in the same boat.
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Old 12-24-2017, 05:51 PM   #33
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There’s a misperception that more people in the past received pensions than actually did. I don’t believe it’s ever been more than about 40% of workers ever received pensions.
According to this CNN Money article, "The percentage of workers in the private sector whose only retirement account is a defined benefit pension plan is now 4%, down from 60% in the early 1980s." (And certainly the public sector had far higher coverage).

Just how common are defined benefit plans? - Ultimate Guide to Retirement

This Forbes article shows that 61% of all workers were offered a defined benefit plan in 1999:

https://www.forbes.com/sites/laurash.../#6e12148e2152


When I started working, most companies offered defined benefit pensions. When I recently retired, virtually none did. In the private sector, the financial risk has been shifted from the employer to the employee pretty much completely.
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Old 12-24-2017, 05:59 PM   #34
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From the article, I understand that the MDD workers in the Tulsa plant did not lose their pension, but it was frozen at the level they earned up to that point when the plant was closed.

It would have been better if the pension plan was frozen and converted to cash value as my wife's megacorp did. The workers got to keep their job, but had to start saving in their 401k. I am not knowledgeable about this, but believe that many (most?) aerospace companies have agreements with employee unions, and perhaps pension reform was not possible and closing the plant was the only thing they could do to save money.
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Old 12-24-2017, 06:07 PM   #35
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While we're junking up Xmas eve with doom and gloom, so far the people with public employee pensions have not been mentioned. Chicago, California, Illinois and many other jurisdictions headed towards bankruptcy will, in bankruptcy, be cutting those pensions. For those who are already retired or near retirement, the necessary arithmetic will be very tough. And, worse, these will probably not be people like @midpack who are financially savvy enough to have planned for it.
date of retirement dictated benefits:
  • to 1984 = COLA not banked so if COLA was greater than 3% increase capped at 3%
  • 1984-2000 = COLA tops at 2%
  • 2000-June 2004= cash payment if personal bucket short, I wrote a check for 66k+
  • 2004-now= pension can be clawed back if nec
So glad they kept harping on the value of fully funding the 457 so it's all good .... letting 457 ride. Actually this passage says it all:
Quote:
Those affected are buried by debts incurred for credit cards, used cars, health care and sometimes, the college educations of their children.
outside of health care, those are lifestyle choices (says one whose kids funded their own college through grants / scholarships / 16k debt on graduation)
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Old 12-24-2017, 06:33 PM   #36
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As I see it, Megacorp did me a favor by freezing pensions in 1994 when I was 40 yo ** and I still had time to plan to depend on our own resources entirely. I do feel some sympathy for those who were not able to plan for retirement without a pension, but some/many could have. And I don't feel much sympathy for those who still pine for pensions to return, that seems highly unlikely.
Ditto, except, I figured this out even earlier, due to pension freeze, and, more importantly, offshoring most w*rk related to my specialty. I learned that technology and business decisions change w*rking conditions more quickly than I could or even would want to keep up with.

In short, I finally learned what my dad had been trying to teach me: be an owner, not an employee. So I maxed out my 401K, and then almost doubled by savings rate beyond this in my early 30's.

Funny thing is that if I had a pension and good retiree healthcare, I perhaps would have felt the pressure of "golden handcuffs". Instead, once I got comfortable with my withdrawal rate, I moved on to the next phase life. Mini-corp moved on and, eventually, so did I. Win-win!!

After reading these replies, I realize I was fortunate to see the carnage in my industry at the beginning of my career. I had few illusions as to the end. I spent a few decades "managing" it's demise in the US, and said goodbye to tons of good co-w*rkers. I had had a good run, but I was done...
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Old 12-24-2017, 06:56 PM   #37
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My father said never trust a company. My father was not crazy about companies. When I got older I understood why.
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Old 12-24-2017, 07:04 PM   #38
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A kind of pension and retiree healthcare is having a spouse who wants to continue working and has company-provided healthcare for the family.
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Old 12-24-2017, 07:09 PM   #39
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I think that pensions should only be for people that really need them, like Jack Welsh, for example.
Who is Jack Welsh?
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Old 12-24-2017, 07:12 PM   #40
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Yeah, I just wish that as pensions were being phased out and 401ks phased in that someone had told employees that they needed to save for their retirement rather than pissing their money away on bigger, fancier houses, fancy cars, incredible vacations, etc. Why didn they warn people?
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