Alan, it was taken over by Prudential. No GM or PBGC involvement, liability, etc. It's all on Prudential.
Cool, I would be happy with that arrangement.
Alan, it was taken over by Prudential. No GM or PBGC involvement, liability, etc. It's all on Prudential.
While I have the utmost confidence my pension plan and its sponsor (one of my former employers), even if I didn't there probably wouldn't be much that I could do about it other than factor its stability into my planning. I've never been one to fret too much about things that I cannot control or influence.
Cool, I would be happy with that arrangement.
Alan, thanks for your post on the GM pension "sale" to Prudential. It is a sale because GM purchased annuity for me and no longer has any ties to the pension program. I agree with other posters that I am better off under the Prudential plan than if GM was still funding the plan.
Having PBGC cover federal pensions would be redundant wouldn't it? As I understand it, PGBC is run by the federal government. The only thing that would result in a loss of federal pensions, would be failure of the government. I imagine PBGC, along with every other government entity would cease to exist at that point. I doubt that the Chinese, or whatever flag we end up under, is going to honor such obligations, PBGC or otherwise.
Sort of, but it can be a "shell game" like Social Security where the left hand takes from the right hand, so to speak -- you've just shifted where the money is. Still, if we reached the point where entities like PBGC, FDIC and even Social Security can't be backstopped, they would be among the least of our concerns.Having PBGC cover federal pensions would be redundant wouldn't it? As I understand it, PGBC is run by the federal government. The only thing that would result in a loss of federal pensions, would be failure of the government. I imagine PBGC, along with every other government entity would cease to exist at that point. I doubt that the Chinese, or whatever flag we end up under, is going to honor such obligations, PBGC or otherwise.
Sort of, but it can be a "shell game" like Social Security where the left hand takes from the right hand, so to speak -- you've just shifted where the money is. Still, if we reached the point where entities like PBGC, FDIC and even Social Security can't be backstopped, they would be among the least of our concerns.
Alan, it was taken over by Prudential. No GM or PBGC involvement, liability, etc. It's all on Prudential.
http://www.pionline.com/article/20120822/REG/120819895
GM transferred $29B to Prudential to cover $26B in obligations. Basically they purchased an annuity from Pru to cover thier obligation! The transfer to Prudential was done to clean up GM's books post BK. Having such a large variable liability on the books was bad for the new GM stock. I have a friend that is a GM retiree and they got an option to take a lump sum if they were uncomfortable with the change to Prudential. I think the lump sum would be more attractive if GM was going to carry the obligation.
The lump sum distributions were only available depending on your retirement date. I was not eligible because I retired in 1988 and I think you had to retire after to 2000 in order to be offered the lump sum. Don't remember the details.
+1Sometimes I think it is better to be responsible for your own financial future.....
Sometimes I think it is better to be responsible for your own financial future.....
Last weekend I met up with a friend who recently lost his (pensionable) job in the healthcare system because of some politics. He has 3 years to go until he is entitled to a full pension and the calculation places a lot of weight on the latter years of earnings. He is having difficulty finding employment. Looks like he will be left with a significantly lower pension than he had planned for, and a longer time to make it last.
Sometimes I think it is better to be responsible for your own financial future.....
Alan, thanks for your post on the GM pension "sale" to Prudential. It is a sale because GM purchased annuity for me and no longer has any ties to the pension program. I agree with other posters that I am better off under the Prudential plan than if GM was still funding the plan.