GE freezes pension benefits for 20k employees
businessinsider.com
GE freezes pension benefits for 20k employees
1–10 of 260 posts
Re: GE freezes pension benefits for 20k employees
#2Can someone explain what this means, and how its not illegal? Arent pensions a contract?
Re: GE freezes pension benefits for 20k employees
#3Can someone explain what this means, and how its not illegal? Arent pensions a contract?
Pensions are very strange. IBM abolished its pension program some decade ago, replaced with a 401K funded to 25% or some such. Saved IBM billions; pissed off a generation of employees.
So no, not really a contract.
Re: GE freezes pension benefits for 20k employees
#4Can someone explain what this means, and how its not illegal? Arent pensions a contract?
Not sure if this is legal or not, but this is definitely why I think the 401k/private saving model is the best. It's a lot easier for governments/corps to change the payout of a system they run vs. clawing money away from an account you own. That being said there should be a minimum safety net for those that don't have the diligence to save by their own accord.
Re: GE freezes pension benefits for 20k employees
#5Can someone explain what this means, and how its not illegal? Arent pensions a contract?
People currently accumulating benefits will stop accumulating. It’s a pay cut.
Plan was closed in 2012, so these are longtime employees.
People currently collecting pensions are not affected.
Ex employees in the pension are being cashed out with lump sums.
Source: https://www.wsj.com/articles/erie-hit-rock-bottom-the-former...
Re: GE freezes pension benefits for 20k employees
#6Can someone explain what this means, and how its not illegal? Arent pensions a contract?
There's typically a minimum limit set out by a set of laws. So if you have $100k yearly pension, they may have to pay at least $25k.
Reality is, 401k is much better for all parties as company and employee can part ways at any time. Employee has more control over their funds, but risk they will lose it all (not companies problem).
Re: GE freezes pension benefits for 20k employees
#7Do pension funds rely on a growing population in order to sustain themselves? I wonder whether they'll see a resurgence as the baby boomers die off and the age distribution in the U.S. becomes more uniform, or if these sorts of plans are a thing of the past.
Re: GE freezes pension benefits for 20k employees
#8Can someone explain what this means, and how its not illegal? Arent pensions a contract?
Pensions are very strange. IBM abolished its pension program some decade ago, replaced with a 401K funded to 25% or some such. Saved IBM billions; pissed off a generation of employees. So no, not really a contract.
> replaced with a 401K funded to 25% or some such.
25% employer contribution match? That seems very high. I've never worked at a company with higher than 5% match.
Re: GE freezes pension benefits for 20k employees
#9... and this is why pension schemes should be managed by the government or at least tightly regulated.
Just imagine GE going bankrupt - who's gonna pay the pension, then? The government in a bailout or what?
Re: GE freezes pension benefits for 20k employees
#10More signs of debt crisis and global liquidity risk. Now wait until California capitulates...