MossRoad
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Our pension froze in 2008. Thank goodness I got into the 401K back in '89.
The younger workforce.
- Thread starter Taylortractornut
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Our pension froze in 2008. Thank goodness I got into the 401K back in '89.
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- Cat D3, Deere 110 TLB, Kubota BX23 and L3800 and RTV900 with restored 1948 Deere M, 1949 Farmall Cub, 1953 Ford Jubliee and 1957 Ford 740 Row Crop, Craftsman Mower, Deere 350C Dozer 50 assorted vehicles from 1905 to 2006
I would have been the first in the family to have a pension...
Guess it will have to wait for the next generation
Guess it will have to wait for the next generation
TomSeller
Super Member
I would have been the first in the family to have a pension...
Guess it will have to wait for the next generation
Pensions are a thing of the past. I had 15 years into one when it was frozen and was surprised how little it will pay out even with high income over the "high five" years. My current 401K and past 401K rollover are much more substantial.
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We never really had a pension... we did have a 401k with generous match, stock plan and pension bonus plan.
All together I have about 2k in employer money in the mix.
We merged several times and only being 20% or 30% vested meant I lost a big chunk each time...
Had co-workers that retired 20 years ago and 100k just in the ESOP plan...
As with most things... the boomers got there first.
Now my public safety friends have incredable pensions... 29 years in with credit for 30 and 180k pension with lifetime medical... got bored at 53 and went to work for another agency bringing in 130k wages... 12 from my high school class went into Oakland PD at 21 with 2 year admin of justice all are retired and some went to work for other agencies/private.
Kind of boggles the mind... I thought I would be smart and get my 4 year degree which from day one provides a salary boost... that extra 2 years brought about a consent decree... too many non minority males in the Bay Area police and fire departments...
All together I have about 2k in employer money in the mix.
We merged several times and only being 20% or 30% vested meant I lost a big chunk each time...
Had co-workers that retired 20 years ago and 100k just in the ESOP plan...
As with most things... the boomers got there first.
Now my public safety friends have incredable pensions... 29 years in with credit for 30 and 180k pension with lifetime medical... got bored at 53 and went to work for another agency bringing in 130k wages... 12 from my high school class went into Oakland PD at 21 with 2 year admin of justice all are retired and some went to work for other agencies/private.
Kind of boggles the mind... I thought I would be smart and get my 4 year degree which from day one provides a salary boost... that extra 2 years brought about a consent decree... too many non minority males in the Bay Area police and fire departments...
Redneck in training
Elite Member
I didn't read all the posts. My former employer hired lot of immigrants. They were the most stable work force and least trouble. The problem was that local people such as accomplished programmers, electronics designers etc were hard to find because they were already working for somebody. So they went to universities to look for talent or brought people "stolen" from our clients in foreign countries. The policy used to be that all were paid the US wage. So most of them were paid way better than us because of lower living expenses. But in return the company got loyal very hard working employees.
I had colleague originally from India that was hired from US university where he was getting advanced engineering degree. I asked him how he could afford the school. The university required to have 20000 USD cash for admission. He borrowed money from friends, relatives etc and put it in a bank. Once he got the statement he withdrew the money and return it. Sent the statement to the university and was admitted. So I asked how he could survive with only few thousand he brought with him. He said: You don't party, you study hard and become top student and teaching assistant. Then you make money. When he graduated he had decent car and 20K in the bank. Worked for us little over 5 or 6 years until he got citizenship. Then quit and went back to school to get MBA degree. Today has corner office with windows and high paying job working for one of the big oil companies.
I had colleague originally from India that was hired from US university where he was getting advanced engineering degree. I asked him how he could afford the school. The university required to have 20000 USD cash for admission. He borrowed money from friends, relatives etc and put it in a bank. Once he got the statement he withdrew the money and return it. Sent the statement to the university and was admitted. So I asked how he could survive with only few thousand he brought with him. He said: You don't party, you study hard and become top student and teaching assistant. Then you make money. When he graduated he had decent car and 20K in the bank. Worked for us little over 5 or 6 years until he got citizenship. Then quit and went back to school to get MBA degree. Today has corner office with windows and high paying job working for one of the big oil companies.
KennyG
Elite Member
For new hires/future earning of benefits, yes. For existing benefits, no. Court cases have pretty consistently said that a promise is a promise and about the only way to cut back on existing earned pensions is through bankruptcy. That was the whole basis of the GM "bailout". Bankruptcy would not have destroyed GM, only reorganized it. It was characterized as a bailout rather than bankruptcy to allow the union and pension benefits to be untouched while the bondholders and stockholders took the hit.
Same thing with governments. The state of Illinois tried to modify pensions and the court would not allow it. Unless they declare bankruptcy (which remains a real possibility) the pensions survive.
dmccarty
Super Star Member
I guess it depends on the meaning of existing benefits.
The very large company I work for reduced defined pensions at least twice that I remember. The last time was the big one where employees who had enough years of service and age, stayed with the define pension plan, those employees like me who did not meet the age or years of service were put into a second retirement system, and new hires are in a third. The defined pension plan decreased benefits and I sure lost money. I don't think people getting the pension were affected but those of us promised a pension certainly were lied too. Retirees were shafted with decreased payments on health care which was also a promise made by the company.
The company has had decent/good profits all during the times the pensions were changed. In fact, the first big change that I remember was to take out the huge amount of money that was over funding the pension. It was hundreds of millions of dollars that went right to the profit line in the quarter the change was triggered. Without the pension change, and the raid on the over funding, the quarterly financial targets would have been missed. The company would have looked good year to year but one quarter would have been ugly...
The reality is that companies and governments have to move off defined pension plans since they move expenses to the future and require future generations of workers and tax payers to pay for past promises which is unethical to say the least. HOW, companies and governments move to new plans is the hard part and not done so well or often early enough.
Later,
Dan
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I think you are spot on Dan
A person comes to work for a company based on the overall package offered.
Even my friends that are in Unions often have two or more depending on date of hire/length of service.
I still have memos about the Temporary 401k freeze... at least I know temporary means 9 years and counting...
It's been a little awkward the last two years as the interim administrator and I have a long history of working well together on many company projects the 401k freeze was one of her pet peeves... that was until they made her administrator.
Every change has been a takeaway and not being fully vested at times of mergers hurt the most... you see money in the retirement account and have a file full of statements... the company changes direction and only 20% of the match is yours...
For over a year the pension plan was MIA... it was not until one of the employees retired and said I want my money that they found it... the money was never transferred from the old company to the new one... I had made inquires and reported back something was wrong.
The one thing I learned, at least with my co-workers, is almost no one pays attention to the retirement statements... until someone retired and wanted their money... I was the only person that questioned it and I was 100% right.
So you don't have to be young to be affected.
Several of my friends that work for local governments bailed when pension changes were coming... they were grandfathered with lifetime medical and were allowed to pension spike in which the year you retire the payout for all unused medical/vacation goes into the calculation to determine the amount of your retirement.
None had planned to leave... all are very glad they did... all were age 50 to 53 and got the heck outta Dodge with their benefits in tack...
A person comes to work for a company based on the overall package offered.
Even my friends that are in Unions often have two or more depending on date of hire/length of service.
I still have memos about the Temporary 401k freeze... at least I know temporary means 9 years and counting...
It's been a little awkward the last two years as the interim administrator and I have a long history of working well together on many company projects the 401k freeze was one of her pet peeves... that was until they made her administrator.
Every change has been a takeaway and not being fully vested at times of mergers hurt the most... you see money in the retirement account and have a file full of statements... the company changes direction and only 20% of the match is yours...
For over a year the pension plan was MIA... it was not until one of the employees retired and said I want my money that they found it... the money was never transferred from the old company to the new one... I had made inquires and reported back something was wrong.
The one thing I learned, at least with my co-workers, is almost no one pays attention to the retirement statements... until someone retired and wanted their money... I was the only person that questioned it and I was 100% right.
So you don't have to be young to be affected.
Several of my friends that work for local governments bailed when pension changes were coming... they were grandfathered with lifetime medical and were allowed to pension spike in which the year you retire the payout for all unused medical/vacation goes into the calculation to determine the amount of your retirement.
None had planned to leave... all are very glad they did... all were age 50 to 53 and got the heck outta Dodge with their benefits in tack...
KennyG
Elite Member
I guess there were a number of companies that had vesting limitations that could hurt the employees when the plans were terminated. In general, it doesn't make sense for a private company to have a defined benefit program rather than a defined contribution (401K) program. You can make a case that it's better for the retirees to have a pension but it really sucks for the current employees if it causes the company to go bankrupt.
We switched years ago to protect the company. We had boomed from 1000 employees to over 5000 employees and then dropped back to less than 2000. We fully vested the pension at 5 years but a lot of people got laid off and had little benefit. The potential large number of retirees threatened the future viability of the company. At the point we terminated the pension plan the employees earned benefit was calculated and an insurance company annuity was purchased in their name. From that point forward, the company put an annual contribution of 6% of salary into the 401K. I think people are uniformly happy with the way it worked out.
My understanding was that it had to be done that way to be legal and the earned benefit had to be fully vested at that time, independent of vesting rules.
We switched years ago to protect the company. We had boomed from 1000 employees to over 5000 employees and then dropped back to less than 2000. We fully vested the pension at 5 years but a lot of people got laid off and had little benefit. The potential large number of retirees threatened the future viability of the company. At the point we terminated the pension plan the employees earned benefit was calculated and an insurance company annuity was purchased in their name. From that point forward, the company put an annual contribution of 6% of salary into the 401K. I think people are uniformly happy with the way it worked out.
My understanding was that it had to be done that way to be legal and the earned benefit had to be fully vested at that time, independent of vesting rules.