This is not true, is it?
17 replies (most recent on top)
100% true on the funding. "Fully funded" is a lie.
As far as the PBGC goes, well look at Greece. I wouldn't trust that either.
@1prp+1j4bZkp7 You are misinformed on “ Ford’s plan is fully funded”
The last reporting showed a 2 billion short fall.
Also you need to take a long hard look at how the $ are invested. You will see they are not in a position to get the current interest rates on most of the $ as the money is locked up in long term instruments paying very low interest rates.
When you get the Ford funding report you have to look past the PR one liner that makes a claim on funding ratio. As that is based on a a cherry picked historical investment climate.
Now on the PBGC most people of government retirement age will get their full benefit guaranteed. Those retiring from Ford in their 50s will not.
If you look at the PBGC Maximum Monthly Guarantees, you can see the amount you will get if Ford goes bankrupt. Generally speaking, if you're making GSR money and near 60 most of your pension will be covered.
Last I looked there were less than 30k that were pension eligible. There is a group 20-25 yrs and a 25-30 year group. The plus 30 group is quite small.
I was fortunate to take the lump sum at 33 yrs in Aug2022 and have not looked back. The pension payment has no guarantees. There is also the early supplemental that is not guaranteed.
Do the math before you jump ship.
@4vlr+1j4bZkp7 "Ford can change their pension plan any time they please."
Agree, but I think the most likely change will be freezing the pension at EOY 2023. It's already capped at 35 years. I believe GM froze their pensions in 2006 as did companies like IBM and Motorola.
Ford can change their pension plan any time they please. You are NEVER safe. If you think you are, you are CRAZY!
Sorry but Ford has 40k pension eligible current or former employees.
And a company can't decide they don't want to pay their obligations. They have either A) prove they can't (which Ford can) and then PBGC will take over or B) buy an insurance policy and convert to an annuity (which the money pension already is). B is not free
@1hb IBM spent $16 Billion to convert 100,000 pensioners. That Is 10X more people than remaining on Ford’s Salaried GRP plan. Ford’s plan is fully funded; therefore, it costs Ford nothing to do the conversion. In fact, given the interest rate in play next year, Ford can fund the conversion and put 20% in their pocket. Scares me enough to leave now.
@rwc Spend some time with compound interest calculators to understand the true loss. Ford counts on people not understanding the basics of time and money.
Any conversion from the current pension to an insurance annuity comes with a steep initial cost (like billions) to buy the policy alone plus ongoing support costs. Read what IBM just paid in September to Prudential and MetLife for the privilege.
And then read what the employee notice rules are.
And then read the annual funding notice for the current pension (number enrolled, number eligible, assets, liabilities).
And then consider a ton of people have indicated they plan to take the lump sum this month or next.
And then do the math.
And then stop this nonsense.
If you believe that I have some ocean front property in Arizona to sell you!
@rwc. Sure, you could be back to even in a year or two. If you enjoy working just to get back to where you were, have at it. Of course, you would be ahead if you took the money now and found another job. But it is just a rumor. If you are satified with taking the pension option, this conversion may not happen.
And even if it does, you most likely would get an opportunity to quickly retire and take the pension option before the conversion took affect.
For some of us, we would be working free for a few years to come.
I guess all I can say is if you do not care about 20-30% of your lump sum going up in smoke, then you are a very short timer who has very little money in your account.
So what if they convert it. Even though my amount would be ~19% lower, I could start investing it now. Plus, I'll still be employed, and they'll give me 9 months' severance when they don't need me. If I last a year or more, then I'll be ahead. If I don't, I won't be out that much.
No Guarantee that there will not be a conversion of GRP into FRP using current interest rates. Those who are eligible to retire now but who choose to stay on, run that risk.
No one is safe. However, it is true that the monthly amount will not change until it gets converted to a 401K based on the lower lump sum payment.