https://www.brown.senate.gov/newsroom/press/release/sherrod-brown-turner-restore-pensions-delphi-retirees
17 replies (most recent on top)
Pensions (defined benefit or defined contribution), 401k match, health plans, vac days, etc are all factors to attract and retain and compete for the best talent.
Smart employees, Ford or otherwise, learn to contribute early to contributory part of the pension (if available), max out 401k, get the 401k match, contribute to Roth and HSA. These are the tools for planning for your own future. That and living within your means,
Then, when they inevitably cut soc security due to burgeoning federal debt levels, you will still have enough to retire on.
These days, of course, pensions are not offered. But that leaves you with the incentive to job shop, portability, and get bigger raises by leaving your company. Take your defined contribution/401k and move on if mgt doesn’t treat you right.
Pensions are just handouts the same way that social security is a hand out.
Back when I started working, pensions were a benefit, not a hand-out Using your statement, I suppose vacation days, holiday pay, and 401k matching are hand-outs.
As far as Social Security, I've been paying FICA taxes (along with my employers) for over 40 years. Getting something back for my money is not a hand-out to me.
Pensions are just handouts the same way that social security is a hand out. When our TRUE president returns to office next year and eliminates social security - I promise that your pension hand outs won't be far behind.
It is not the company's responsibility to take care of you when you get old. And it is not the government's responsibility to take care of you when you get old. You didn't save enough on your own? Too bad. Remember, homelessness is a crime. So when you stop paying your mortgage or rent and sleep outside, you will be arrested and thrown in jail.
65 is a twist. Available statistics from about 2019 during the VIP/Vxx, only very, very small % of the Ford GSR/LL6 employees were above 60. Once you move the retirement age earlier to mid-50, to be aligned with typical auto OEM, the bankruptcy guaranteed pension amount becomes a very obvious problem.
From the congressional research report https://crsreports.congress.gov/product/pdf/R/R42076/8
PBGC Maximum Guarantee
“The maximum guarantee for a pension that was terminated in 2009 is $4,500 per month ($54,000 per year) for retirees who begin receiving pensions at the age of 65. “
Using the formula for annual pension 1.5% X 30 years service X average of last five yrs annual salary. If this equals $54k per year covered by PBGC
Solving for average annual salary at retirement equals $120,000 salary at retirement. In 2009. So this is a very high salary for 2009, and I suspect this covers 99.9% of Delphi retirees as covered by the PBGC monthly max benefit of $4500 for plans terminated in 2009.
And just like Ford pensions, the annuity option is fixed in amount for lifetime.
Does not increase.
Help me see what I am missing here.
Please share concrete examples of multiple employees seeking relief from me the taxpayer for having their Delphi benefit “slashed 70%”.
As Ross Perot said, I’m all ears to listen.
Thanks
I did get the lump-sum pension and participated in the pension contributory program as soon as I could. I felt I had great compensation and didn't miss out. Unfortunately, a few of my co-workers left for other opportunities and came back to no pension. They are forced to keep working and some of them have lost their Ford job, and it's not a good job market out there. Maybe they didn't invest the $500/month. I am fortunate in that I don't have to work due in large part to the pension.
I did invest the $500/month religiously but it wouldn't have been enough. And the 1.5% contributory pension that I made over the decades was a much better return than even during the great bull market. Also, putting that money towards a pension was (theoretically) safer than the market.
I am glad you are fine without a pension. I'm fine with mind. I guess we are all happy.
Using this table and, for a 30_&_(forced or encouraged)_out at 57 yr old, pension plus ss bridge would easily exceed the PBGC legal limits by a large margin.
https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee
Employee contribution is not $500/m, except for some lucky few. If it is $500/m for GSR, only fool will participate.
Hindsight is 20/20. You are correct, $500 per month invested in total stock market would yield $1.2M. Using a 60%/40% stock/bond fund yields $868K.
However, Did you personally execute the same plan to perfection?
https://www.portfoliovisualizer.com/backtest-asset-class-allocation#analysisResults
I found this link very informative. I don’t see how anyone is being shorted.
Plan appears fully funded to the legal limit. Amounts paid out and legal limits in the congressional research article link appear very fair to me. Don’t burden the taxpayer on this.
Get over it. Prove you are due more. Otherwise I see only bi-partisan election-year vote begging/harvesting on behalf of Sherrod brown and mike turner, both of Ohio.
https://www.pbgc.gov/wr/large/delphi/delphifaqsalaried
Delphi Salaried Plan Facts:
Date of Plan Termination (DOPT):
07/31/2009
Date of Plan Trusteeship (DOTR):
08/10/2009
Number of Participants:
20,000
Current Retirees:
9,600
Plan Assets as of the DOPT:
$2.5 Billion
Plan Liabilities as of the DOPT:
$4.5 Billion
PBGC's liability for the Delphi Plan as of the DOPT
$4.0 Billion
I retired in 2022. I took the lump sum as well. Place sure changed from the day I hired in. HC from cradle to grave. Well that promise went down the toilet in the 2000's.
So with the way the company is currently being managed We felt strongly to take the lump sum payment.
I am fine with having no pension. I prefer getting paid my worth today, with today's dollars, and not in 30 years, with the future dollars. Yes, after 30 years the payout is large, but how much did employees lost during that time? How many opportunities did they miss to keep the pension?
An ex-coworker got around $1 million lump sum, after 30 years of work. Nice! However, if he had contributed $500 each month and invested it in the SP500, he would have reached the same result. So the question is... did he get paid a fair wage? And if he did get paid a lower wage, how much lower?
Glad I retired with the lump sum December 2022 after 33 years. Never considered taking the stream of payments for one second.
I read this paper about Delphi. Part of the paper briefly covered the Delphi salary define benefit pension cancellation. Details are not in the link but can be easily traced on PBGC web site for the rational of cancellation. One more reason that salary with define benefit retirement plan should also unionize to participate in legal procedure when (not if) Ford goes down or the pension may not be guaranteed, just like Delphi salary . It is all about the cost to fund the pension. cost = $. Ford had been treating many define benefit employees badly because of $.
I am SO HAPPY that I took the lumped sum. With the Delphi story, I will do the lumped sum regardless the interest rate. It is a decision between "lesser" and "none".
https://crsreports.congress.gov/product/pdf/IF/IF12171
And a lot of the multi-employer pension funds (teamsters, etc) went bankrupt due to malfeasance, corruption, and misfeasance.
I guess the point is that multi national corporations can ditch their obligations way too easily.
From this link
https://crsreports.congress.gov/product/pdf/IF/IF12171#:~:text=Termination%20of%20Delphi%20Pension%20Plans,Hourly%2DRate%20Employees%20Pension%20Plan.
“PBGC reported in 2019 that 84% of retirees who receive benefits from PBGC are paid the full benefit amounts they earned under their retirement plans (i.e., do not have their benefits reduced to the maximum benefit guarantee)”
I don’t get it. If the PBGC guaranteed some portion of the pension, how did the guy mentioned in the article “lose the full value of his pension”.
Maybe that’s why the case was lost at various court levels and Supreme Court declined to hear it.
Everyone needs to know, your pension is not guaranteed. So fully fund your 401k and add some Roth IRA to the mix.
Same thing for the health insurance premium the guy claims he lost. Nothing is guaranteed. As a Ford 2022 retiree, I realize the HRA health spending amount is not guaranteed. If offered a lump sum, by all means take it, as we learn all the time the company can go down and with it all of your monthly pension, except that which is backed by PBGC.