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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

#51

Post by mikepurvis »

chrisseaton wrote: post #42
lotsofpulp wrote: post #21

Earlier quoted context omitted.

I doubt it, defined benefit pension plans don't make financial sense in the current climate. Who is able to predict which company will be around in 30 to 60 years in the future, and what the economic climate will be? And much of the pension fund investments are going to the same place as 401k money anyway. Why not directly invest in VTI and skip paying all the pension fund managers and staff? It's not like they have…

I wouldn’t even agree to getting a defined benefit pension these days - why wouldn’t you want to invest your own money instead of letting one company you happened to work for control your pension? I have a defined benefit pension from a previous employer and frankly I count it as zero in my financial planning since I have no idea if it’s actually coming or not.

Americans love having the one company they happened to work for control their healthcare, though.

Re: GE freezes pension benefits for 20k employees

#53

Post by phonebanshee »

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.

Why do you think that?

httpss://en.m.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation

Re: GE freezes pension benefits for 20k employees

#54

Post by lotsofpulp »

joeyrideout wrote: post #41
lotsofpulp wrote: post #30

Earlier quoted context omitted.

In the US, "pension" typically means a defined benefit pension.

Not any more... "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. About 14% of companies offer a combination of both types." [1] [1] https://money.cnn.com/retirement/guide/pensions_basics.money...

I mean that in common vernacular, when someone says "pension", they are referring to a defined benefit pension. Otherwise, in the US, we use 401k, IRA, "retirement funds", or other words.

Re: GE freezes pension benefits for 20k employees

#55

Post by rileymat2 »

lotsofpulp wrote: post #21
eternalny1 wrote: post #15

Keep in mind this comes on the heels of the Madoff whistleblower saying GE is a fraud: https://www.barrons.com/articles/ge-insurance-fraud-madoff-w... They piled up massive losses in their insurance division (long term care) and guess who gets slammed because of it? The workers.

I doubt it, defined benefit pension plans don't make financial sense in the current climate. Who is able to predict which company will be around in 30 to 60 years in the future, and what the economic climate will be? And much of the pension fund investments are going to the same place as 401k money anyway. Why not directly invest in VTI and skip paying all the pension fund managers and staff? It's not like they have…

The simple answer is that group mortality is easier to estimate and plan for than individual mortality.

At 65, you do not know if you are going to live to 70 or 101, so you need to plan your 401k accordingly, pessimistic.

Couple that with the fact that many many americans could not save enough to last to 101, but could last until 72. So they are left with the choice of living more poorly than they should or running out of money.

Defined benefit makes way more sense, some people "win" by living longer, others lose. But there is much less stress in the meantime.

Re: GE freezes pension benefits for 20k employees

#56

Post by Rebelgecko »

joeyrideout wrote: post #41
lotsofpulp wrote: post #30

Earlier quoted context omitted.

In the US, "pension" typically means a defined benefit pension.

Not any more... "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. About 14% of companies offer a combination of both types." [1] [1] https://money.cnn.com/retirement/guide/pensions_basics.money...

I don't think I've ever heard someone refer to their 401k as a pension

Re: GE freezes pension benefits for 20k employees

#57

Post by mschuster91 »

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.

In Germany, the pension (Rentenversicherung) follows you during your employment life, the mandatory contributions are automatically paid by your employer and it does not matter if the employer goes belly-up at some time between now and your eventual death.

The idea that someone could lose their retirement and depend on social security or nothing at all simply because the company one has dedicated his life to goes bankrupt is just... horrible.

Re: GE freezes pension benefits for 20k employees

#58

Post by mywittyname »

anonuser123456 wrote: post #40
voxic11 wrote: post #37

Earlier quoted context omitted.

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!"

Or, more accurately: issue more traffic citations.

Re: GE freezes pension benefits for 20k employees

#59

Post by lotsofpulp »

Rebelgecko wrote: post #56
joeyrideout wrote: post #41

Earlier quoted context omitted.

Not any more... "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. About 14% of companies offer a combination of both types." [1] [1] https://money.cnn.com/retirement/guide/pensions_basics.money...

I don't think I've ever heard someone refer to their 401k as a pension

I think they use the word "pension" for defined contribution retirement plans in the UK since they, of course, don't have the US tax code section 401k.

Re: GE freezes pension benefits for 20k employees

#60

Post by [deleted] »

joeyrideout wrote: post #41
lotsofpulp wrote: post #30

Earlier quoted context omitted.

In the US, "pension" typically means a defined benefit pension.

Not any more... "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. About 14% of companies offer a combination of both types." [1] [1] https://money.cnn.com/retirement/guide/pensions_basics.money...

[deleted]
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