IF GM goes bankrupt do the retirees get their pensions and health insurance? (loans, corporation)

[njsocks]

I am curious as my parents friends worked for GM and are very nervous they won't receive pensions/health insurance through the company anymore. Some of them are pretty nervous .

I appreciate any help!

[Dexterguy]

I don't think that anyone honestly knows right know, the first thing they would cut for the retirees would be part or all of their healthcare. The pensions would be a little harder to cut. I can't see GM and Chrysler just throwing all of these elderly senoirs out on the streets.

It's not ONLY the actual retirees that would be affected, I know a lot of retirees that are supporting their child, grandchildren, and other family members because they have fallen to the hard times.

If the GM and Chrysler pensions get completely wiped out (which I don't think they could) then it would be one of the biggest disasters not only for Detroit and Michigan but for the retirees and people being supported on retiree checks across the country.

[texdav]

It really just depends on the courts handling the bankrupsy like in the case of the airlines.With the legacy cost beig so high I would expect changes tho.

[wanneroo]

I think if they do go bankrupt, the pensions are covered by some federal program which of course is paid for my the taxpayers. They'll still get a pension but it will be much reduced.

[Donn2390]

Pension Benefit Guaranty Corporation (PBGC)
Pension Benifits Corp is the company that takes over retirement funds from BK companies....
It's not tax payer money,. Those companies have been paying in for years to fund the plan. It's guarnteed, so if the fund were ever to run out, then the taxper gets stuck...

[killer2021]

Originally Posted by wanneroo

I think if they do go bankrupt, the pensions are covered by some federal program which of course is paid for my the taxpayers. They'll still get a pension but it will be much reduced.

Yea the PBGC.

[floridasandy]

the PBGC is insolvent, so helloooo taxpayers!:

In the 1980s, as the American public realized that a great many savings and loans were insolvent, they discovered that FSLIC, a government corporation, was itself insolvent. Now the public is coming to realize that many pension plans are deeply underfunded and that companies obligated to remedy the underfunding can, and in a number of cases do, go bankrupt instead.

This leaves the pension funds--just like Packard’s almost sixty years ago--with insufficient assets to pay their pension obligations. The PBGC guarantees the pensions, but the PBGC is itself insolvent, just as FSLIC was. How does this happen?

PBGC and FSLIC represent the same risky structure: open-ended government guarantees of liabilities dependent on financial performance, other peoples’ financial risk decisions, and the behavior of interest rates and asset prices. Both represent mandatory schemes designed by, and with non-market “insurance premiums” set by, the political processes of Congress.

[hindsight2020]

I'd take a PBGC'd pension over a 401K any day of the week and twice on sunday.....I don't care about the privatizing profit part, I care about the socializing loss part. If socializing loss is good enough for AIG it's good enough for me too.

[floridasandy]

Q. Wait, isn’t the PBGC in trouble?
A. Yes, to the tune of $11 billion, mostly because it hadn’t increased the insurance rates that companies pay to the agency, and because of a growing number of pension defaults. The 2006 Pension Protection Act (known by labor reps as the “Pension Destruction Act”) boosted the insurance rates companies pay to the PBGC, among other actions.

Q. What happens if the PBGC goes belly up?
A. This Q and A is veering off into questions above our pay grade. Our guess: Taxpayer bailout. Or we all work until we die, go through another Great Depression, in which case those who held onto huge SUVs and Hummers will look pretty smart because they have more living space than a Camry or Civic.

[hindsight2020]

Originally Posted by floridasandy

Q. What happens if the PBGC goes belly up?
A. This Q and A is veering off into questions above our pay grade. Our guess: Taxpayer bailout. Or we all work until we die, go through another Great Depression, in which case those who held onto huge SUVs and Hummers will look pretty smart because they have more living space than a Camry or Civic.

Like I said, if it's good enough for AIG it's good enough for me. Socialize loss away I say....

Are people gonna torch the streets? Of course not, otherwise they would have done it when the 700 billion dollar ransacking happened the first time. Just because people have been taught to despise populism as a value in american culture doesn't mean the american people have teeth, they have shown they don't. We're obedient sheep. That being the case, I put my money on a pension backed by PBGC than a 401K with no backing (never mind I had to starve myself to end up underfunded anyways). Provided my assumption on Americans is correct, it's a no brainer. so far I've been proven right. Don't get me wrong, I wish this wasn't the case, but I'm not about to become a financial martyr just so the " few" can continue spewing their 401K loving ponzi scheme mantras at the expense of the sheep.