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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

#151

Post by ScottFree »

chooseaname wrote: post #118
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…

I would love for this to happen. But I see a couple blockers. 1) It is some sort of badge of honor to get a "job with benefits". 2) What if more people decide to not get healthcare? If your job gives it to you and you "only" have to pay a few hundred a month for your family, you are more likely to get it than if you payed everything out of pocket each month (even if your compensation increased). People would see all…

I have yet to meet a single person who hasn't enthusiastically agreed that we should separate healthcare from employment. The reluctance comes when nobody has any idea what we're going to replace it with.

We're at an unusual social state in this country where nobody trusts the government and nobody trusts big business. What does that leave?

I'm a US freelancer, so I don't get health insurance through my employer. I get most of my healthcare directly from doctors and pay for visits and lab tests in cash. It works especially well when you tell them in advance you'll be paying with cash and haggle a price before walking through the door. I pay for a high deductible plan through a christian co-op for unforeseen events. This has proven to be considerably cheaper and more effective than paying for a plan through the obamacare marketplace.

Re: GE freezes pension benefits for 20k employees

#152

Post by SketchySeaBeast »

froindt wrote: post #114
SketchySeaBeast wrote: post #61

Earlier quoted context omitted.

It still has value, assuming you're intending on working until you retire and the company has no signs of failling - why wouldn't you want a (nearly) guaranteed income for the rest of your life? That doesn't preclude you from investing your own extra cash into investments. I understand the dynamics have changed, but my boomer parents and in-laws are both enjoying retirement with the fruits of a defined benefit pensio…

There are so many ways it can go wrong - and when it does, the results can be disastrous. The article below mentions how poorly things can go, with private equity groups buying a company, things go poorly, it gets liquidated (pension gets dissolved), then the same private equity group buying it out of bankruptcy. Funny enough, with Marsh, the executive pension plan got a good payout relative to the thousands of store…

Personal savings can be equally disastrous - it's mismanagement of a pool or an individual. I get that individualism runs high, especially in this sector, which is running hot and people are enjoying being highly desirable, but pensions took the concern of managing retirement from the average worker for a generation. Would the average pensioned worker in 70's or 80's have had access to the education and resources required to ensure that they could save what they needed to to retire? I don't know.

Re: GE freezes pension benefits for 20k employees

#153

Post by lotsofpulp »

mschuster91 wrote: post #57
helpPeople wrote: post #33

Earlier quoted context omitted.

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 ban…

What is the difference between Rentenversicherung and Social Security? They sound like the same thing.

Re: GE freezes pension benefits for 20k employees

#154

Post by ajnin »

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…

It's not that they can't, more that they don't want to, because that gives them leverage on their employees. Look at the recent GM strike : not happy ? We're cutting your health insurance. They reversed it ultimately but I bet it'll make people think twice next time they're thinking about going on a strike.

And you know what is even more efficient than market-based health insurance and pensions ? Socialist state-level monopolies. Yep, costs in Europe are about half of what they are in the US. Turns out governments are not more inefficient than companies, especially very large ones.

Re: GE freezes pension benefits for 20k employees

#155

Post by lotsofpulp »

ceejayoz wrote: post #67
helpPeople wrote: post #33

Earlier quoted context omitted.

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.

> If your company isn't there when you retire, you don't get a pension. https://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corpo...

https://www.ai-cio.com/news/multiemployer-pension-lifeboat-s...

It's mostly for show, and at the end of the day, if the pensioners have enough political clout (like those of GM in 2008/2009), then they will get bailed out for real by Congress.

Re: GE freezes pension benefits for 20k employees

#156

Post by wyldfire »

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?

In a bankruptcy proceeding, the courts try to balance the needs of retirement benefits along with the company's creditors. GE has enormous assets so it's not a safe assumption that the pension obligation just disappears in a bankruptcy.

Re: GE freezes pension benefits for 20k employees

#157

Post by hocuspocus »

dx87 wrote: post #144
admiun wrote: post #138

Earlier quoted context omitted.

Regarding 2), you could just make healthcare insurance mandatory. We have that in The Netherlands.

What if someone refuses to pay? Do they get a fine that's higher than what the cost of paying for healthcare would have been?

Here in Switzerland if you don't give proof of insurance the state will pick one for you. Then if you don't pay, it's like with any other bill, you'll get into troubles really quick.

Re: GE freezes pension benefits for 20k employees

#158

Post by guardiangod »

seren wrote: post #48
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.

For what it is worth, the website that was launched alongside the fraud allegations has already been removed. http://web.archive.org/web/20190929121126/https://www.gefrau... So basically, there was some media orchestration, GE stock dipped somewhat, potentially the hedge fund paying Markopolos made some benefits and there was not really any follow up (so far) from the SEC. And the website disappeared a month later. I…

>the website that was launched alongside the fraud allegations has already been removed.

Maybe the SEC is starting the case and asked the tipsters to remove all relevant documents online to prevent prejury?

Re: GE freezes pension benefits for 20k employees

#159

Post by bjourne »

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.

That's how it used to be in many European countries. Insurance is an old concept that predates the modern nation state. Problem is that in an unregulated market, private will not keep a big enough buffer to avoid ruination because that hurts profits. In the 19th century a lot of upper class people had such insurances for their businesses which turned out to be worthless because when disaster struck they found that the money wasn't there. Gradually such worthless insurance funds were nationalized and became the foundations of many European welfare systems.

Re: GE freezes pension benefits for 20k employees

#160

Post by hiram112 »

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?

> In government... I don't think pensions ever went out of fashion.

There are a lot of different pension schemes out there as the feds, states, and localities do not use uniform plans. What I've seen, though, is that there are now "two tiers" - one for older employees and another for younger ones. You can guess which plan is more generous...

A lot of localities and states see the writing on the wall - that their perpetual 9% growth rates and population increases won't keep up, and are thus moving new employees into 401K plans, no different than the rest of us in the private sector.

Honestly, I don't think I'd be able to tolerate being a teacher or state employee, and knowing that my manager, 20 years older than me, has a retirement worth 3x as much, and it will be funded by increasingly shorting me on salary and benefits (along with tax increases) as the pension liabilities become harder to pay. Look at certain cities like Chicago and Baltimore and states like New Jersey for a current example.

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