Heard from someone close to Elliot that 2020 is the last year for pension. Stankey and company will announce and cite 70 company benchmark study that Bill Morrow always talks about. Will increase 401k contributions but obviously not close to pension numbers. It’s over folks.
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Lol.. It would be easy to say nonsense if you were not witness to the company being run into the ground. I do not trust them.
Is this for union employees too? Thought they were under contracts that couldn’t be changed until the end of it.
I think what he is trying to say is that they are stopping all new contributions for management similar to what Verizon did back in 2006. If you are a manager, they contribute a percentage of your salary into the pension plan based on the number of years service. Once you hit 30 years so so, the percentage starts decreasing. That is a slap but most companies have bee doing away with it over the last 20 years. AT&T would not have to be consIdering it had it not been for the poor past decisions that cost this company billions of dollars and countless jobs and still nobody is held accountable. The leaders and board need to be replaced.
The best time for a company to move pension obligations to an insurance companies is when interest rates are high because that will lower lump sum annuity calculations. Conversely, the worst time to make that move is right now when interest rates are at historical lows.
Does not make sense to make that move now.
"Your comment on the PBGC benefit being pennies on the dollar is incorrect. Go to the PBGC website and check the table. The maximum benefit for someone my age is almost twice what my pension pays."
This is EXACTLY right, for most craft employees at least ... it's amazing how little people know about their pension plans!
Pensions offered by companies and the funding of the PBGC are caught in a vicious circle. The government wants to keep the PBGC fully funded so over the last 10 years or so it has dramatically increased the premiums that companies must pay to the PBGC. This has led to companies freezing their plans or off-loading the plans to insurance carriers to avoid the higher premiums. Examples of the later include Bristol-Myers, Lockheed Martin, Verizon, Fedex, GM. With the current financial crisis, possible bankruptcies could put more pressure on the PBGC as they need to backstop the pension plans of the bankrupt companies. This could lead to increased premiums for the remaining companies that offer pensions and more risk dumping by companies.
http://www.pensionrights.org/publications/fact-sheet/companies-have-transferred-pensions-insurance-companies
@yuv+15ZpWNMI Your comment on the PBGC benefit being pennies on the dollar is incorrect. Go to the PBGC website and check the table. The maximum benefit for someone my age is almost twice what my pension pays.
"Plus the PBGC (a government agency) would provide a backstop."
The PBGC backstop you speak of is pennies on the dollar if there are problems with the T pension plan. If you are offered a chance at a lump sum, you should take it and run.
Never trust T with YOUR money. What they are doing to their employees should be enough evidence to convince you.
Pensions can be frozen. Any accumulated time under a pension is guaranteed under the PBGC. However, if you are pension eligible and the company freezes the program, you will no longer accrue any benefit in the program. For example, I have 21 years, and if it is frozen now I won’t be able to max out my pension benefit because I will not have enough service in within the plan. This is also a game changer for when looking for another position outside of the company. There’s no longer any reason to stay put and deal with this mess in hopes of accruing more benefit.
i started with Ameritech,my pension has been frozen for a long time.85
Company is under zero obligation to continue to fund pension at the current levels or at all. Get the facts straight. It’s not a right or obligation to continue. All these old timers just can’t get over the fact that the gravy train is ending.
I think under federal law, ATT can end the pension either of two ways which take precedence over the PBGC: 1) sell the pension obligation to an insurance company who will then pay pensioners an annuity, or 2) give each pensioner a lump buy out. If someone thinks of some other way or option, please prove it.
https://www.pbgc.gov/about/pg/other/how-pension-plans-end
This post is sorely lacking in details. Pensions for new hires ended several years ago For craft and simultaneously the company match on 401K contributions went up from two thirds to seventy five percent to compensate (how benevolent) as one poster stated the pension fund could be sold to an insurance company as Verizon did but anyone that is fully vested will receive their pension
Verizon froze their management pension (and increased 401k match) back in 2006. At about the same time, they also transferred the management pension plan for those already retired to Prudential so they could wash their hands of any future obligation. Unfortunately, it's very possible that the cost-cutting currently underway could include a move like this. I'm actually surprised that the company didn't follow the VZ move many years ago. Remember - companies like to benchmark to the lowest benefit coverage for the regular workforce, but to the highest coverage for C suite executives.
When cutting employee benefits, they say:
"We need to make this move because our largest competitors (Verizon, T-Mobile) don't have these pension obligations."
When giving executive obscene compensation packages, they say:
"We create executive compensation packages in line with our major competitors so we can attract and retain the highest caliber leaders with the vision and background to lead us into the future."
Pensions for existing eligible employees and retirees cannot be eliminated. The government has dibs on all Mobility assets if that were to happen. Plus the PBGC (a government agency) would provide a backstop. It's true that the management pension has been frozen for a number of years but that's old news.
Dumb a$$ makes up a rumor about something he does not even fully understand.
They stopped offering pensions to new management employees years ago. Are you saying they will stop offering pensions to new union employees? Or are you saying they will be selling the entire pension program to an insurance company? Or are you saying they will buy everyone out with a lump sum? Those are the only legal options for AT&T at this point. Or are you just confusing the entire pension with the medicare subsidy they are cutting at the end of the year?
"Also, think of all the $ they will save when there is a mass exodus of ANYONE that is pension eligible."
If it happens, they will stop contributing to the pension fund, like alot of companies did years back, I'm kind of surprised this hasn't been done already. They cannot keep the amount you've already got vested in your pension fund. There will not be a mass exodus of anyone who is currnetly receiving pension contributions,their pensions will just stop receiving contributions.
~yawn~
Verizon did it a,ways back. Management only.
This rumor has been posted before. Inquiries where made with HR and Finance and so far, no one in either org will fess up it is being considered. But they may be sworn to secrecy.
That being said, I put NOTHING past Ratty and Stinky. Remember, any savings that this will provide will go right into their pension pocket. They don't car about the shareholders or the employees or Elliot. They only care about lining their pockets!
Also, think of all the $ they will save when there is a mass exodus of ANYONE that is pension eligible. All that severance $ saved makes for a nice big bonus for the Ratty and Stinky!
I love it!!
Nonsense.