Thread regarding 3M layoffs

This announcement, while disheartening, was not unexpected

There are a couple of noteworthy things. 1) The five year notice is decent under the circumstances. 2) It clearly gives a data point on the time frame and trajectory on the future. Most companies no longer want the long term liability of pensions.

Regarding bankruptcy. Pensions are "guaranteed" under the government's Pension Benefit Guarantee Corporation. I suggest researching this thoroughly. My understanding that the PBGC does not guarantee pensions at 100% if the company goes bankrupt and sells off the pension. It could be as low as 65%.

You must consider whether the 3M will fund the pension for the duration of your lifetime. If you think it could be reduced, then you should consider the lump sum. Note that with the lump sum it will change in accordance with interest rates, specifically the 417e segment interest rates. Generally, a 1% increase in the 417e segment rate from November to November results in a 8 - 12% reduction in the lump sum.

There is a lot to consider. Speak to a trusted financial advisor to make the best decision for you and your family.

The best take I've seen on this so far. Reposting from @jsn+1qtADZ0S for more visibility.

by
| 2495 views | | 7 replies (last January 24, 2024) | Reply
Post ID: @OP+1quAVeqC

7 replies (most recent on top)

Portfolio 1 and 2 pension calculations are much different. P2 calculates a lump sum value which is much better because the interest rates only impact our monthly annuity not the lump sum value. P1 calculate your monthly annuity and then you calculate your lump sum based on the ever changing rates. P1 always was higher but the freeze had a vastly different impact on people depending on many factors. Good luck to all who have had their future stolen.

by
| | Reply
Post ID: @fsta+1quAVeqC

Reading the MR lack of impact, in addition to a good read, is stomach turning…

by
| | Reply
Post ID: @dru+1quAVeqC

Good read:

https://www.msn.com/en-us/money/companies/3m-s-ceo-is-in-line-for-a-26-million-pension-as-company-freezes-the-plan-for-employees/ar-AA1mIj7Q

by
| | Reply
Post ID: @ikw+1quAVeqC

This was my exact same experience, Post ID: @opp+1quAVeqC . We looked at the numbers with our financial advisor & it was the clearest example of a "no-brainer" decision as we could imagine. We ran numerous models with our guy and if we'd left the pension in the "trusty" hands of Empower--using their forecasting tool-- the return over the next 6 years would have been a smooooooth 1.2%. Our guy just looked at us and said that he'd expect any client to fire him on the spot if he provided similar results.

by
| | Reply
Post ID: @lnk+1quAVeqC

When, in recent history, has 3M ever done the right thing for employees or acted in the best interest of employees?

5 years notice out of the kindness of their heart? MR has made some NY resolutions? Nope, this is the nail in the bankruptcy coffin. Rug pull coming.

by
| | Reply
Post ID: @sbl+1quAVeqC

I had modeled my pension in the past in case of layoffs. If I was left in 2022, I would have $650k lump sum to take with me. I ended up being laid off in may 2023 and with the interest rate hikes we had, I ended up with only $393k lump sum. Quite a difference. I'd recommend those with pension to run checks each year to see how it changes and know your value.

by
| | Reply
Post ID: @oqw+1quAVeqC

I was laid off in May 2023. I took the lump sum of my Pension ( plan 1 ) and rolled over my 401K because I figure it’s just a matter of time until they reduce or eliminate the pensions for retirees. Looks like this is only the beginning.

I will say since removing everything from 3M and having my financial advisor call the shots things are doing much better than they ever did under the Life Portfolio Plan

by
| | Reply
Post ID: @opp+1quAVeqC

Post a reply

: