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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

#121

Post by mrlala »

zarro wrote: post #109
orian wrote: post #92

Earlier quoted context omitted.

You mean like in good, old Europe? No way!

I'm not sure that the European version of outsourcing that responsibility to the government is the way to go for the same reason. Letting people set up private companies with competitive options I think would probably drive the best results.

>Letting people set up private companies with competitive options I think would probably drive the best results.

Hello, please call

* 910 if you think your fire is not urgent, and can wait 10 minutes to come for free

* 911 if you think your fire is getting hotter, and can only way 5 minutes to come for $500

* 912 if you would like the fire department to come as soon as they possible can, and skip the queue of 910 callers for $10000

Re: GE freezes pension benefits for 20k employees

#122

Post by ghaff »

skybrian wrote: post #93
rileymat2 wrote: post #71

Earlier quoted context omitted.

At an individual level, You can invest the same way, the problem is, you don't know how long you will live. Which was my main point. There are annuities, but my research into those has come up with very high costs with lots of fees.

But why is that? It seems like there should be a way to offer a simple annuity product profitably.

There are. But I think you're hearing a lot of people not liking the cost associated with significantly de-risking a future annual income stream.

Annuities can certainly make sense, including ones that, for example, you can get by donating appreciated assets.

Re: GE freezes pension benefits for 20k employees

#123

Post by technofiend »

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.

> but this is definitely why I think the 401k/private saving model is the best.

Not sure if it made outside just the Houston news cycle at the time but as an employee of a competitor I heard from friends at Enron that their employer froze all sales of their stock in employee 401ks before going under. Lou Pai managed to cash out as part of a divorce settlement as documented here https://www.chron.com/business/enron/article/Ex-Enron-exec-P... but most employees were not able to divest themselves and protect their retirement.

Re: GE freezes pension benefits for 20k employees

#124

Post by lotsofpulp »

charles_f wrote: post #117
lotsofpulp wrote: post #30

Earlier quoted context omitted.

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

Earnest question from a non-American - aren't companies legally bound to pay these benefits? It's always surprising to me to see those huge companies stopping payments and the story ending there

Legally bound doesn't mean much if it doesn't have the power to print money. If it affects enough voters, the government usually steps in with a bailout for part of the benefit.

Re: GE freezes pension benefits for 20k employees

#125

Post by Someone1234 »

mankyd wrote: post #112
zarro wrote: post #109

Earlier quoted context omitted.

I'm not sure that the European version of outsourcing that responsibility to the government is the way to go for the same reason. Letting people set up private companies with competitive options I think would probably drive the best results.

Isn't that what American health insurance companies are?

Kinda yes. But it isn't competitive when you cannot even pick your own health insurance company nor see prices for medical care (or see what is in/out of network).

Splitting employers from health insurance is one of several required changes that needs to happen before the supposed hand of capitalism can allow the market to get healthier.

I have no idea if it would work, but the status quo is so unhealthy at the very least improvement competition/choice could improve that somewhat.

Re: GE freezes pension benefits for 20k employees

#126

Post by cannonedhamster »

ghaff wrote: post #74
chrisseaton wrote: post #42

Earlier quoted context omitted.

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.

Paying out defined benefit plans aren't totally at the whim of the company. For example, there are protections through the Pension Benefit Guaranty Corporation and you could probably arrange for your own insurance as well. Having some savings as defined benefit does give you predictability. Even if you don't have a defined benefit plan through a company, it may make sense to convert some savings into an annuity of so…

Companies just suckle up to the public teat when they make a bad business decision and it's always the employees that take it in the shorts. The executives get paid big bucks for making decisions but bear no responsibility for the results. It's all upside for them. That's a gamed system in need of being broken.

Re: GE freezes pension benefits for 20k employees

#127

Post by akvadrako »

zarro wrote: post #85

I really think that the sooner we can separate out pensions and healthcare from employers, the better. Businesses main area of expertise is not in pensions and healthcare, and they cannot provide these services as efficiently as if there were many different insurance companies on the market offering these services for sale, and instead the company paid you a fee for your services, and then you went out on the market…

That's easy and libertarian to do — just stop government from treating benefits as a special case in terms of taxation. It feels like a policy that should have cross party support among those who want smaller government or better social systems.

Re: GE freezes pension benefits for 20k employees

#128

Post by chrisseaton »

walshemj wrote: post #100
chrisseaton wrote: post #42

Earlier quoted context omitted.

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.

Don't take this the wrong way but you need to take some serious advice, DB pensions are far far better than a DC. Look at the transfer values of some DB pensions they can be worth multiple millions and no way would an individual be able to build up an equivalent amount in a DC scheame

> no way would an individual be able to build up an equivalent amount in a DC scheame

Well if you put millions in you get millions out.

Re: GE freezes pension benefits for 20k employees

#129

Post by Someone1234 »

Spivak wrote: post #108
kpmcc wrote: post #27

And while they cut pension benefits, this is what the CEO makes: https://www.cnbc.com/2018/10/05/new-ge-ceo-larry-culp-inks-s...

Okay look, I get that it’s fun to be angry the high salaries of CEOs but it’s one of those things that just doesn’t matter and does nothing but distract from the actual problems. That 2.5 million dollars distributed to the 20k pensioners amounts to $125/person/year. If you distribute it to all $300k GE employees they get a $6/yr raise.

That $2.5M isn't even half of their compensation. Why did you pick the lowest figure in the article to make this argument?
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