U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 11-11-2018, 09:26 AM
 
1,261 posts, read 288,549 times
Reputation: 1510

Advertisements

I truly feel bad for people that have lost their pensions after a significant work and time investment. It's just not right.
Reply With Quote Quick reply to this message

 
Old 11-11-2018, 09:28 AM
 
1,261 posts, read 288,549 times
Reputation: 1510
Quote:
Originally Posted by MI-Roger View Post
Yes, sort of at least.


I worked as a salaried employee at GM for 38 years. GM reformulated pension calculations in 2008 and 2012 (that I remember and prior to that as well). Both reformulations resulted in reduced future pension amounts. The last change also froze the salaried employee's pension balances and replaced the pension with an annuity plan, although no details were released regarding the annuity plan. I was age 56 when the 2012 changed occurred, and if I had elected to stay at GM until age 65 my pension/annuity fund balance would not have changed during the 9 year period.


So I left GM, cashed out my pension fund, turned it over to our Financial Planner for retirement investing, and got a new job in the same field earning similar wages with a 40 miles/day reduced commute.
Excellent management of the situation and recovery. Good on ya!
Reply With Quote Quick reply to this message
 
Old 11-11-2018, 04:50 PM
 
Location: Floyd Co, VA
3,415 posts, read 5,134,593 times
Reputation: 7231
The PBGC has two parts. One is just for single employer pension funds and the other is for multi-employer funds.

The amount that multi- employer funds had to contribute to the PBGC was extremely low since it was assumed that with multiple employers there was less chance that a great many of them would end up in bad shape. That PBGC fund only has to pay a ridiculously small amount of what was supposed to be provided to retirees.

For the multiemployer plans, the amount guaranteed is based on years of service. For plans that terminate after December 21, 2000, the PBGC insures 100 percent of the first $11 monthly payment per year of service and 75 percent of the next $33 monthly payment per year of service. For example, if a participant works 20 years in a plan that promises $19 per month per year of service, the PBGC guarantee would be $340 per month.

The 2008 financial meltdown left many funds in "critical and declining" status. So in Dec 2014 congress changed the ERISA law to allow funds to cut benefits to both current and future retirees. They can cut funds to the point that it would pay just 10% over what the PBGC would pay.

Pension plans that have applied to cut benefits under the Multiemployer Pension Reform Act | Pension Rights Center

There are about 1.5 million retirees affected by the change, with the Central States fund being the largest. My fund submitted an application to the Treasury Dept and it was rejected in May 2017. Had it been approved I would have had a 60% cut in my pension. At this time they have not yet decided whether they will revise the numbers and resubmit. I continue to save and wait and save and wait - putting off all but the most necessary home maintenance and repairs such a new roof, hot water heater, pressure tank for my well water, etc. My 23 year old vehicle with 210,000 miles continues to hang in there.

So no matter how secure you think your pension plan is keep in mind that the laws can change and do as much as you can to fund your own retirement.
Reply With Quote Quick reply to this message
 
Old 11-14-2018, 01:56 PM
 
219 posts, read 71,591 times
Reputation: 554
My husband was a pilot for United Airlines for 37 years. Pilots were unionized and their contracts always specified a defined benefit pension at retirement. It took into account that pilots had to retire at age 60 which negatively affected their social security. About 2 years after husband retired, United declared bankruptcy. They were permitted to liquidate the pilots’ pension fund and hand the responsibility over to the PBGC. The longer-retired pilots lost some, but the recently retired pilots like my husband, really took a hit. He receives about 12% of what he expected. Luckily, we had savings which provides some income. What bothers us is that not all the company’s pension funds were liquidated and that executives walked away with huge “parachutes”.

We never lived an extravagant lifestyle but if we’d known what was coming, we could have saved a lot more than we did.

The whole experience left us not trusting unions. All those years he paid dues (1.5% of gross income) plus assessments to pilots at other airlines when they were on strike, yet once he retired the union didn’t fight for the retirees. They agreed with the plan to liquidate pensions.

Having your future in your own hands (IRA, etc) sure looks like the safer way to prepare for retirement.
Reply With Quote Quick reply to this message
 
Old 11-14-2018, 02:08 PM
 
3,298 posts, read 850,592 times
Reputation: 3789
Quote:
Originally Posted by CLfan1977 View Post
My husband was a pilot for United Airlines for 37 years. Pilots were unionized and their contracts always specified a defined benefit pension at retirement. It took into account that pilots had to retire at age 60 which negatively affected their social security. About 2 years after husband retired, United declared bankruptcy. They were permitted to liquidate the pilots’ pension fund and hand the responsibility over to the PBGC. The longer-retired pilots lost some, but the recently retired pilots like my husband, really took a hit. He receives about 12% of what he expected. Luckily, we had savings which provides some income. What bothers us is that not all the company’s pension funds were liquidated and that executives walked away with huge “parachutes”.

We never lived an extravagant lifestyle but if we’d known what was coming, we could have saved a lot more than we did.

The whole experience left us not trusting unions. All those years he paid dues (1.5% of gross income) plus assessments to pilots at other airlines when they were on strike, yet once he retired the union didn’t fight for the retirees. They agreed with the plan to liquidate pensions.

Having your future in your own hands (IRA, etc) sure looks like the safer way to prepare for retirement.
If not trusting unions is all you learned from this experience, I fear for the future of organized labor and their membership. You stated yourself that the money went to the corporate executives, not union leadership, yet unions are the ones you don't trust?

If not for unions, the remaining pension would be 0%, not 12%. IRA/401k is always an option, regardless of whether you have a pension or not. I'd still chase a pension if I found an opportunity as it's money on top of my 401k, 401k match, and doesn't come out of my paycheck...
Reply With Quote Quick reply to this message
 
Old 11-14-2018, 05:37 PM
 
25,985 posts, read 32,990,963 times
Reputation: 32176
No. The pension was one of the reasons I took this job (that and the commute, and the stability). Public sector, so I'm not worried about it changing. They did change the plan a few years back, but that only affected new hires going forward. I am a little over 3 years away from retirement, and very very glad to have my pension to provide part of my retirement income.
Reply With Quote Quick reply to this message
 
Old 11-16-2018, 10:06 AM
 
1,510 posts, read 965,094 times
Reputation: 2858
Quote:
Originally Posted by CLfan1977 View Post
My husband was a pilot for United Airlines for 37 years. Pilots were unionized and their contracts always specified a defined benefit pension at retirement. It took into account that pilots had to retire at age 60 which negatively affected their social security. About 2 years after husband retired, United declared bankruptcy. They were permitted to liquidate the pilots’ pension fund and hand the responsibility over to the PBGC. The longer-retired pilots lost some, but the recently retired pilots like my husband, really took a hit. He receives about 12% of what he expected. Luckily, we had savings which provides some income. What bothers us is that not all the company’s pension funds were liquidated and that executives walked away with huge “parachutes”.

We never lived an extravagant lifestyle but if we’d known what was coming, we could have saved a lot more than we did.

The whole experience left us not trusting unions. All those years he paid dues (1.5% of gross income) plus assessments to pilots at other airlines when they were on strike, yet once he retired the union didn’t fight for the retirees. They agreed with the plan to liquidate pensions.

Having your future in your own hands (IRA, etc) sure looks like the safer way to prepare for retirement.
The 2002 United bankruptcy? The union argued that United needed to fulfill its pension obligations. It was United - the corporation executives - who fought and won in their efforts to default on their obligations to their employees:

https://www.nytimes.com/2005/05/11/b...ion-plans.html
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top