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GE freezes pension benefits for 20k employees

businessinsider.com

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Re: GE freezes pension benefits for 20k employees

#31

Post by nerdponx »

Retric wrote: post #13
matthewaveryusa wrote: post #4

Earlier quoted context omitted.

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.

Personal 401k’s don’t offer much over saving directly. It has some tax advantages at the individual level, but those tax savings are just shifting money around at the societal level. The upside of public / private pensions is pooling money among a pool of survivors. Rather than saving X money to live off of at 95 while risking dying sooner you essentially save less on a bet that will live to be 95. Die early and you…

Personal 401k’s don’t offer much over saving directly.

I beg to differ. My IRA doesn't offer a 6% match.

Re: GE freezes pension benefits for 20k employees

#32

Post by sesuximo »

mschuster91 wrote: post #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?

At least in the US, what you describe is reality. Pensions are regulated heavily (you may disagree with the few legal flexibilities though).

And they are at least partially insured:

https://www.pbgc.gov/

Maybe the PBGC will go under? Who knows.

Re: GE freezes pension benefits for 20k employees

#33

Post by helpPeople »

mschuster91 wrote: post #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?

Do people not understand this is how pensions work.

If your company isn't there when you retire, you don't get a pension.

I find it incredibly risky to rely on pensions. I don't quite understand why employees are so excited about non cash benefits.

Re: GE freezes pension benefits for 20k employees

#35

Post by xienze »

JoeAltmaier wrote: post #3
dannykwells wrote: post #2

Can 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.

And six or so years ago IBM changed their 401k match to only provide the matching funds if you were still employed on December 15th instead of every pay period.

They really are the worst.

Re: GE freezes pension benefits for 20k employees

#36

Post by lotsofpulp »

helpPeople wrote: post #33
mschuster91 wrote: post #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?

Do people not understand this is how pensions work. If your company isn't there when you retire, you don't get a pension. I find it incredibly risky to rely on pensions. I don't quite understand why employees are so excited about non cash benefits.

>I don't quite understand why employees are so excited about non cash benefits.

They might not be aware that automation has done away with the role of pension fund managers. In the old days, you couldn't just go out and buy a total stock market or bond market ETF. Nowadays, you don't even have to think about asset allocation with target date funds. And since all investments are going towards the fewer and fewer remaining companies, a bailout for one is a bailout for all.

Re: GE freezes pension benefits for 20k employees

#37

Post by voxic11 »

anonuser123456 wrote: post #16
twodave wrote: post #7

Do 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.

In the corporate world, probably not. Pensions obligations just look like debt on the balance sheet... but they have high administrative overhead. Further, there is the risk that life expectancy will continue to grow... thus making those liabilities much larger. In government... I don't think pensions ever went out of fashion. Why bother when you can always just print more money?

Not all governments can just print more money, which is why many state and local pension programs are in major trouble.

Re: GE freezes pension benefits for 20k employees

#38

Post by golover721 »

matthewaveryusa wrote: post #4
dannykwells wrote: post #2

Can 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.

Sadly companies never really have contributed much to employee 401ks which was one of the main selling points when being offered as an alternative to pensions.

Employees are very lucky if employers contribute 50% of their contributions (which would would be a max possible of $9500 match this year). And usually it’s significantly less.

In 2019 employers are allowed to contribute up to $36000. No company I have heard of provides anyway near that. The 401k has unfortunately allowed employers to care very little about employees retirement.

Re: GE freezes pension benefits for 20k employees

#39

Post by entropea »

rootusrootus wrote: post #25
Clubber wrote: post #14

I inherited the desire to buy American cars to support America workers from my Uncle would was a WWII vet. He didn't like Japanese products (he was in the Pacific theatre). I've been buying American cars for the last 20+ years and currently own a GM. I think the next one I buy will be Japanese or German and it's ironic. While I spent my money on American cars to support American workers, the American companies offsho…

Are you conflating GM with GE?

I read it that way too, at first, mostly because of GM's recent strike & health benefit cut headlines.

Re: GE freezes pension benefits for 20k employees

#40

Post by anonuser123456 »

voxic11 wrote: post #37
anonuser123456 wrote: post #16

Earlier quoted context omitted.

In the corporate world, probably not. Pensions obligations just look like debt on the balance sheet... but they have high administrative overhead. Further, there is the risk that life expectancy will continue to grow... thus making those liabilities much larger. In government... I don't think pensions ever went out of fashion. Why bother when you can always just print more money?

Not all governments can just print more money, which is why many state and local pension programs are in major trouble.

Good point. I'll amend my statement with "or raise taxes!"
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