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if your pension is paid out by a multi employer fund you may be interested in this article. Last December a law was passed.allowing these funds to cut existing pensions if they face insolvency within 10 to 20 years. Apparently this is become more prevalent at large companies such as UPS pull out of these funds for future employees. This puts already retired past employees at risk of having their current pensions reduced.
I think this makes a case for taking a lump sum payout and investing it yourself if that option is available.
So how is it decided that a company is facing insolvency in 10-20 years? Seems that is very subjective and how many companies would love to use that as a way to get out from under the burden of pensions?
So how is it decided that a company is facing insolvency in 10-20 years? Seems that is very subjective and how many companies would love to use that as a way to get out from under the burden of pensions?
Central States Pension Fund is not a Company Pension Fund. Its UNION fund, Part of the union contracts is the companies that have union workers Contribute $'s per hour worked for the Union Fund. The Union Runs and manages the Fund.
The "Idea" was so Union Member could go from company to company in a union job and keep there pension.
But the Fund is alot like Social Security , Its a ponzi scheme, They need current member putting money in to fund the current pension costs, When the fund was in doing well they had 4 Paying Member for each Retiree, Now it 5 retiree for each paying member.
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Originally Posted by flyonpa
Central States Pension Fund is not a Company Pension Fund. Its UNION fund, Part of the union contracts is the companies that have union workers Contribute $'s per hour worked for the Union Fund. The Union Runs and manages the Fund.
The "Idea" was so Union Member could go from company to company in a union job and keep there pension.
But the Fund is alot like Social Security , Its a ponzi scheme, They need current member putting money in to fund the current pension costs, When the fund was in doing well they had 4 Paying Member for each Retiree, Now it 5 retiree for each paying member.
And unlike the federal government, union pension plans don't have the ability to print money or take funds from other programs to cover a shortfall. With the big reduction in union membership, it's easy to see how the funds will run out in 10 years, especially since that coincides with the biggest wave of boomer retirements.
The cuts only average 23%. It's not like they're going to be below poverty level or anything.
So if your pension is $2000 now you will receive a new pension of $1540. Big drop especially with inflation. It really makes a case for investing a lump sum payout. At least you have some control.
Thank your government. Congress made the change to multi employer pensions where current recipients of pension money could face cuts.
It got passed end of 2014 as part of a spending bill. It set a precedent folks and hardly anyone knew it happened.
Only those 80 and older won't see cuts. Union members get no say so in how much is cut.
And there is no requirement to restore the lost benefits.
I recall this was brought up here in the Retirement forum back when it got passed. If Congress can do this to union pensions then they can certainly do the same to Social Security.
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