Heard pension freezes are coming next
9 replies (most recent on top)
Live heard nothing. I call BS. Dividend just went UP today and earnings call is next.
Most companies have ZERO pension these days anyway so I'll take it, even if it's only a Pinto and not the Cadillac it used to be.
No, I'm not management.
So glad I took my as a lump sum 7 years ago!!!
Sounds like this is a manament post (most of the responses also) to plant a seed in the worker bee heads. Because the platinum parachutes are going to be built with this savings for management. This company spends way to much time talking about saving money and has no good ideas to make it. You can only sell things your way out of so much. It is definitely insanity there.....lay off a few people and keep doing the same things with fewer people (perhaps not quite insanity, but close).
The next logical step is a pension freeze and ConocoPhillips inherited endless pensions via merger and acquisition activities. No unusual for a payout for employees without a long history with the company. A a five year employee the pension is of value but the cost to manage the pension for a five year employee is high. A one time payout will end the liability. The employee can move the money into other retirement resources. As the company scales back in size a simplification of the retirement offerings would be smart. The employee may not end up with a pension but will end up with a lump sum.
Most E&P's have already done away with pensions. It's been a trend.
Whatever the reasons given, the reality is that freezing plans saves money for companies, and, thanks to accounting rules, also allows them to show significant increases in operating income on their annual reports to shareholders.
Financially unhealthy employers also freeze plans in order to reduce expenses. Sometimes they do this under pressure from creditors or to stave off bankruptcy. A company also may freeze a plan when it acquires another and it would be too difficult to merge the plans. Typically, employers that freeze their defined benefit plans will typically offer enhanced savings plans to their employees.
Freezing. Pensions that have been 'earned' are still worth something and either need to be paid as pension or can be bought out by the company. This has been done by large companies in the past, most notably IBM. It created a big stink in the media, but it did not deter IBM from buying out pensions from all rank-and-file employees. Getting rid of, or freezing, pensions gets rid of unknown future liability amounts, and then the bean counters are much happier.
What? More info please
Freezes in what way?