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Old 11-07-2018, 10:13 AM
ERH
 
Location: Cary, NC
1,141 posts, read 1,635,150 times
Reputation: 2018

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Many years ago, my father lost half of his 401k (the employer match portion, I'm guessing?) when Owens Corning bought out the aluminum manufacturer he worked for. I don't know the details myself, but if anyone here could explain how that happens, I'd appreciate it.
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Old 11-07-2018, 10:35 AM
 
1,509 posts, read 964,546 times
Reputation: 2848
Quote:
Originally Posted by recycled View Post

My second employer instituted a huge change in the retirement plan for all new employees, just before I retired (so change did not affect me). All new employees would no longer be participants in the company funded pension plan. All new employees must set up a 401K plan, which they and the company would fund. The company would match dollar for dollar, any employee contribution to the 401K up to 6 percent of salary.

My advice is, don't bet the farm that the company funded pension plan will still be there 20 years from now. Contribute as much as you can into a 401K or IRA. Once your contributions and your employers contributions to an employer's 401K plan are vested, that employer cannot raid or steal your 401K funds, even if the company goes bankrupt or is sold off to another. I put the maximum allowed amounts into my 401K plans at both employers where I worked for 40 years, and those are much larger components of my retirement funds than the monthly pension benefit that I get from employer #2.
"But the pension fund was just sitting there."
(A line from a Doonesbury strip in the early '80s)

Growing up in a midwestern manufacturing community in the '70s and seeing the parents and grandparents of friends work for decades with the expectation of a pension only to see it disappear or be greatly reduced when their companies declare bankruptcy or get bought by another corporation, I never counted on one regardless of promises by employers.

I have always used 401k and 403b plans, even in positions with pensions. My wife does the same. And IRAs when we are able.

If we get to retire ... if there is a pension payout (or two) ... that would be nice. But not counted on.
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Old 11-07-2018, 10:50 AM
 
202 posts, read 74,464 times
Reputation: 947
That is exactly what happened to me. We had a good pension plan, the company put in 7% and employee put in 7%. They held a meeting a few years back and told us that company participation would drop from 7% to 2.5%. Also, the defined benefit pension would end, credits frozen and a new 401k offered. All new employees would only have the 401k. They outsourced the 401k to another company, in effect washing their hands of the whole retirement problem. Since we had no union, there was no input from employees. The company just said we are doing it, if you don't like it get out. Of course, the net effect on employees was a 4.5% pay cut across the board. With no raises, everyone went backward on salary. This did not stop the top executives from their paid travel, top shelf booze, and T-bone steaks. There were no cuts there. It is little wonder employees lose motivation when treated like this. Younger workers could of course leave and tell them to kiss off. Older workers like me had to bend over and take it.
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Old 11-07-2018, 10:54 AM
 
Location: Wasilla, AK
7,240 posts, read 4,132,331 times
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All of ours are still fully intact. State of Alaska pensions are constitutionally protected. I don't think my military pension is going anywhere either.
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Old 11-07-2018, 11:04 AM
 
213 posts, read 73,664 times
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If you can, save what you can. The pension can disappear, or be greatly reduced like what has been said already. And even the biggest corporations are looking to do that. Federal and local government are not exempt.

I retired from a County government, and have a pension (no SS). The pension is run by an agency that is not "part" of the county and has done extremely well in taking care of what they have. But the county has tried to go after some of the funds in times of need, and lawmakers are continuously trying to reduce pension payments and benefits, and have succeeded to a certain degree on the newer employee's so far.
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Old 11-07-2018, 12:16 PM
Status: "Loving life, wife and job!" (set 7 days ago)
 
Location: USA
996 posts, read 384,185 times
Reputation: 2669
If a company's goes broke and their pension plan isn't funded, won't the Pension Guarantee Corp. backstop it? https://www.pbgc.gov/

Take Sears for example. From the PBGC website:
PBGC has been working with Sears for several years to improve the funding of the company’s two defined benefit pension plans. PBGC expects that its guarantees would cover the vast majority of benefits earned under those Sears plans. If circumstances require, we are prepared to step in and provide PBGC-guaranteed benefits. The plans, which cover about 90,000 workers and retirees, are underfunded by about $1.5 billion.
I'm just as dumb ole country boy. While I've been with the same company for 33 years, no one told me that I didn't have to save money in my 401k also. I still expect a pension, it should be covered if things so south at Big Paperclip and I have a healthy 401k also.
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Old 11-07-2018, 12:31 PM
 
1,509 posts, read 964,546 times
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Quote:
Originally Posted by k7baixo View Post
If a company's goes broke and their pension plan isn't funded, won't the Pension Guarantee Corp. backstop it? https://www.pbgc.gov/

Take Sears for example. From the PBGC website:
PBGC has been working with Sears for several years to improve the funding of the company’s two defined benefit pension plans. PBGC expects that its guarantees would cover the vast majority of benefits earned under those Sears plans. If circumstances require, we are prepared to step in and provide PBGC-guaranteed benefits. The plans, which cover about 90,000 workers and retirees, are underfunded by about $1.5 billion.
I'm just as dumb ole country boy. While I've been with the same company for 33 years, no one told me that I didn't have to save money in my 401k also. I still expect a pension, it should be covered if things so south at Big Paperclip and I have a healthy 401k also.
Yay! Another example of a corporation pushing their obligations to the taxpayers!

PBGC is in trouble, though ...

https://www.forbes.com/sites/tedknut.../#3874f762525f
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Old 11-07-2018, 02:31 PM
 
1,830 posts, read 784,944 times
Reputation: 3365
Quote:
Originally Posted by Stockyman View Post
Luckily I have a company pension but I won't be retiring in another 20 years if I'm lucky enough to not be fired, let go, or have my company close.

Curious if anyone here lost their company pension or had it reduced due to bankruptcy of their company. Not sure if my company can last another 20 years even though it's very stable now but who can tell in the future. I feel for people who say retired from Sears and were depending on that pension to help them in retirement.

Sorry if this has been discussed to death.
Here you go https://www.goodfinancialcents.com/c...ut-my-pension/ and https://www.pbgc.gov/about/faq/pg/ge...aqs-about-pbgc You won't lose all the money but you may not get it all. Don't count on just the pension, have other options as well not including Social Security.
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Old 11-07-2018, 02:40 PM
 
Location: Albuquerque NM
1,657 posts, read 1,522,722 times
Reputation: 3632
I'm not losing my federal pension but 2019 will be my first COLA and the pension is already starting to be eroded. Since the SS COLA of 2.8% is between 2 and 3%, the FERS COLA will be 2%. I had expected this gradual decline in pension and have tried to take that into account with the other legs of my three legged stool - delaying SS, being a little more aggressive with my 401k asset allocation, etc.

And there is a movement by our current administration to abolish the COLA for federal pensions although I assume I might be grandfathered in as a current retiree.
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Old 11-07-2018, 02:41 PM
 
51,911 posts, read 41,783,059 times
Reputation: 32379
OP, somewhere around 2012 an innocent sounding Bill called the "Moving Forward for Progress in the 21st century Act" was passed.

Tacked into it was a pension funding change where companies could stop discounting liabilities using a 2 year average investment return and instead use a 30-year average.

In your pension statement each year they have to show the calculations both ways.

So, at the end of 2017 my GE pension that I'll eventually collect was 95% funded using the more favorable higher interest rate discounting...but only 77% funded by the old calculation which is an 11.5billion dollar difference.

This meant that GE only was required by law to put in 1.4billion to shore it up instead of 3.4billion under the old calculations.

What that means is that unless interest rates ramp up a lot in the coming years Pensions will be funded at weaker than historic levels so if the company does go under the hit to pension recipients will be greater than they may have historically been.

Never ever ever ever count on a company pension unless it's something like a cash balance plan you control.

I'll have maybe 20-30k / year in pensions when I retire but the bulk of my retirement will be in 401k.
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