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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

#221

Post by refurb »

ScottFree wrote: post #151
chooseaname wrote: post #118

Earlier quoted context omitted.

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 g…

I have yet to meet a single person who hasn't enthusiastically agreed that we should separate healthcare from employment.

You should talk to some union members then. Some unions have negotiated such generous healthcare benefits that they’d either never find on the private market or could never afford.

They don’t want to give those up.

Re: GE freezes pension benefits for 20k employees

#222

Post by golover721 »

mercutio2 wrote: post #141
golover721 wrote: post #38

Earlier quoted context omitted.

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 o…

Many (perhaps not most? I haven’t researched broadly) large companies offer 100% match for 401k contributions, up to 6% of your salary. If you say the denizens of the companies I’ve worked at are all very lucky, I won’t disagree, but it’s surprising to hear this is uncommon. EDIT: Or perhaps your percentages are (unusually, for US conversations about 401k contributions) referring to total outlay, by which standard a…

The max employee contribution in 2019 is $19000 so given a 50% match the employer would pay $9500. I know a number of large tech companies offer this. But it still way under what they COULD contribute. And you are right most companies are way under that 50% match up to the individual limit example.

EDIT: Sorry just reread your comment, yes that’s another way companies will structure it x% match up to y% of your salary. The x and y differ wildly. Also some will add a up to z total match. Which kind of formula works out best for you highly depends on your salary. But the average employer contribution for someone maxing out their personal contribution is $3000.

Re: GE freezes pension benefits for 20k employees

#223

Post by Bartweiss »

chooseaname wrote: post #161
ScottFree wrote: post #151

Earlier quoted context omitted.

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 g…

> 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. Sadly, I have, and it is invariably from people who basically say those who don't work don't deserve healthcare. It is disturbing to hear people say this. They don't want to "pay" for someone else's healthcare. Th…

It seems like "healthcare linked to employment" is a nutty system even if you don't want healthcare for people who can't pay, though.

Even among people who work and have a lot of money, having healthcare based on employer causes all kinds of headaches. It makes a brief lapse between switching jobs unreasonably risky, especially before pre-existing conditions were covered. It punishes self-employment by denying people the major discounts big employers can negotiate. It punishes part-time work, because one 40 hour/week job with insurance might "pay" better than two equal-wage 30 hour/week jobs. And it makes long vacations or early retirement far less accessible; if you make in 6 months what someone else does in 12, you're not free to take those 6 months off without paying a steep premium on insurance.

And none of that is news, but it's always confused me that there's so little drive to delink healthcare from "being actively employed". Even for someone who wants to shut down Medicaid, the current system is bizarrely hostile to all kinds of high-earning people who could pay their own healthcare costs, but get punished for looking anywhere except full-time work at a big company.

Realistically, I think it's just ignored because the larger debates over cost and government care overshadow everything else. But in my more cynical moments, I can't help noticing that while the current system doesn't serve workers or entrepreneurs well, it's great at driving them to become a predictable labor supply.

Re: GE freezes pension benefits for 20k employees

#224

Post by MuffinFlavored »

pixel16 wrote: post #96
MuffinFlavored wrote: post #8

Earlier quoted context omitted.

> 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.

Microsoft does a 50% unlimited match up to the irs cap FYI.

IRS cap is $19k/yr, meaning Microsoft does up at $9.5k/yr. That is about in line with what I have seen. Most companies will give you about $5k - $8k/yr.

What is a common yearly bonus/raise like at Microsoft, including stock options/grants?

Re: GE freezes pension benefits for 20k employees

#225

Post by Bartweiss »

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?

Before it was stripped from the ACA, the price for not having insurance scaled with income. At the lowest end it was irrelevant because of Medicaid eligibility; above that it gradually increased from below-healthcare-price to above. So some people could still save money by opting out, but it pushed them towards the market by making the effective cost of insurance smaller.

(Technically speaking, it was a tax rather than a fine. That mostly mattered for legal reasons, but it did also work that way in practice. It applied to everyone, so insured people had the obligation waived, but the people paying it weren't in violation of any law or regulation.)

Re: GE freezes pension benefits for 20k employees

#226

Post by nomel »

RIMR wrote: post #188
nomel wrote: post #95

Earlier quoted context omitted.

Conflict of interest? Isn’t the interest of a business survival and profit?

Those are examples of business interests, but if any business that doesn't care about the physical and financial wellbeing of its workers is a business we are better off without. "We made a profit" is never an excuse for unethical/immoral business dealings.

> doesn't care about the physical and financial wellbeing of its workers is a business we are better off without

I think this is a very simplistic view.

I don't know enough about this particular case with GE, but sometimes layoffs are absolutely required for a business to continue existing, especially when the economic cycle dips a bit low. This is almost an absolute for smaller businesses.

For these cases, what do you suggest? Close the doors, laying off all workers, or lay off some, allowing the rest of the workers to continue their employment?

Something like "Sorry, you're all out of work because we don't want to lay off some of you" seems a bit self destructive, with a much more negative result.

Re: GE freezes pension benefits for 20k employees

#227

Post by Bartweiss »

akvadrako wrote: post #127
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.

It's frustrating that employer-provided healthcare is treated as the standard alternative to single-payer, with very limited time spent on why even private insurance is specifically coming from employers. (When historically, as you point out, the answer is "tax reasons".)

The current system drives all kinds of awful distortions independent of actual cost, and it wouldn't take much to improve. Swapping the tax exemption for a write-off would be a significant start to stop penalizing freelancers and part-time workers who have to buy their own insurance, and indirectly promote competitive not-employer-sponsored plans.

I'm not sure if this just gets ignored because the issue is so contentious that small changes aren't worth the political price, or if there's something darker there, but it sure seems like it could be a bipartisan move.

Re: GE freezes pension benefits for 20k employees

#228

Post by gruez »

rwmj wrote: post #76
spo81rty wrote: post #45

Earlier quoted context omitted.

It says his compensation is largely tied to company stock performance. He is not guaranteed all of that money. He and the company have to perform.

Stock is up 3% on this news, and no doubt will be up on future news of cuts to headcount, benefits, etc. So there's a conflict of interest here.

>Stock is up 3% on this news

What? According to google finance, the stock closed $8.57 last Friday, opened $8.55 today, reached an intra-day high of $8.65, and closed at $8.56. There's no way you can say that it was up 3%.

Re: GE freezes pension benefits for 20k employees

#229

Post by amluto »

jartelt wrote: post #187
amluto wrote: post #166

Earlier quoted context omitted.

> The reluctance comes when nobody has any idea what we're going to replace it with. The straightforward answer is to replace it with self-paid insurance plans. Even without redesigning our awful system of medical payments in the US, we could easily get rid of the “employer pays” part.

Self-paid insurance plans only work if you require every one to buy a plan. Otherwise many healthy people choose to go uncovered and the insurance pools get a higher portion of sick folks. Obamacare tried to get around this by using the individual mandate penalty. However, that was taken apart by the republican congress, so I think it's safe to say that self-pay insurance was/is not straight forward. The most straigh…

> Self-paid insurance plans only work if you require every one to buy a plan.

The US did this until very recently. It should IMO be reinstated.

In any event, this is more or less orthogonal to the issue at hand. As far as I know, nothing stops employees with employer-sponsored healthcare from opting out.

Re: GE freezes pension benefits for 20k employees

#230

Post by sokoloff »

rileymat2 wrote: post #55
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…

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 o…

Defined benefit for sustenance level probably makes sense (which is more or less what Social Security is if you've worked a typical career).

Defined contribution allows for the transfer of wealth to heirs at death, which many people find a preferable and more fair-feeling way to deal with the fruits of one's labor than to have it revert to the annuity provider (private or public).

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