I am hearing rumors that an email will be coming out in Sept 2017 regarding pension changes for aero. All those with plan A pension will need to retire before the end of the year in order to get a monthly pension. If they stay at honeywell, they will only get a lump sum drastically reduced. While this rumor is not new, the timing of the email is. Anyone hearing similar rumors or able to provide more detail?
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If HON was going to change the plan like end it I am pretty sure they have to give 60 days notice. When they ended adding pay raises to the calc they told us beginning of November. It would be great to be kind to employees and notify us early perhaps even 5 years in advance like other companies but I wouldn't count on it. A pubic company should have some balance between share holder value and employees but we won't see that here Hope they prove me wrong
-1oav
if you will work 'til you die, then you have done some pretty poor planning.
Yep, I have first hand knowledge of a retired Sr. Technical Manager with Honeywell Aero Engines that has his pension and 401K divided up between three ex wives and himself. He had to work until he was seventy to be able to afford even a very basic retirement.
Prior post should have said "burn[ing] too MUCH cash"
1wgm-- Comment that 1ckd made about "burn[ing] too cash" was that HON would be burning too much cash to do the lump sum payouts, not that the employee/retiree would burn through the cash
PBGC.GOV is a good source of information on the rules and what would be legal. Only some of the HON plans allow for lump sum. It depends which plan of over a dozen in the USA you are under. And other countries are totally different. UK did a huge change effect June 30 and many people left. If HON feels that achieved their goals then they will do it to USA plans. They do not have to do it to all plans. They could just do the Bendix plan or Allied plan etc
Most likely they are going to just halt them all and your benefits will freeze at current level
Although one option is to get rid of early retirement option and only allow to take at 65 unless you file by December 30. That would probably drive a lot of exits like it did in the UK
1moa
if you will work 'til you die, then you have done some pretty poor planning. As far as being protected from "banksters", who will protect you from the protectors?
I need no protection from anyone by anyone, and will retain my liberty to my dying breath.
The lump sum does not need to burn cash. Roll it into an IRA, as I did, and then only tap it for the equivalent of the pension payment which will be taxable just as the pension payment is. There are many pension plans around in the US, so check yours, but most do not have inflation protection but SS does. Inflation is low now and may well stay that way for quite awhile but over decades even low inflation becomes a problem.
Until President Cheeto changes those pesky "Onerous business regulations" to allow them to abscond with the funds set aside for your pension. Just a matter of time. But you keep believing that government will protect you from the Banksters! I'll work til I die!!!
They can't touch or change "Vested" pensions. Say what you want all you bull crappers, this is a fact.
A lump sum would burn too much cash. This has been on the board before. Sadly what is more likely is another change like 2015. Just freeze all pension payouts at what they are now. There are people who still are staying because their pension still goes up the longer they stay. They will stay for that reason. A true pension freeze saves the company and gets rid of the last reason for long term people (higher paid) to stay.
I would not put this past them.
Mr. "No that's crap" you are wrong!!! This is on the books and will happen.
Nope, that's crap. This comes up every month or so.
The first class action should have been when they froze the pension in 2015. It may have been legal but it wasn't ethical. They broke an implied promise to employees who chose to remain in the old plan. I think they were concerned there were still 20,000 active employees in 2015 that were in the old plan, if I remember that number correctly.
I retired but I did research this when it came up last time. Briefly, a US company can't change what you have earned but can change things going forward as they have done at least twice in the past. I'm not sure if this means that they drop a monthly check in exchange for a lump sum that MUST be calculated in accordance with US govt rules about assumed rates of return. It's more complicated than this, but simplistically the lump sum approximates the present value of the monthly checks assuming 5% return (approximately) per year to your longevity. It may not seem like a lot but note that you would roll that into an IRA for you to invest. BTW - I don't see why they would do this since I don't think it would favorably affect the pension contributions that they have to make that affect the holy earnings per share strictly on a paper basis. Many companies are in worse shape than Honeywell on that score, but I do think the CFO in Morris Plains has a staff that spends more time on this kind of thing than on increasing organic growth.
If they try to impose a lump sum that is inadequate to purchase an annuity that is roughly equivalent to the original deal, they'll be facing the mother of all class action lawsuits.
So around 2000, they made Aero decide between the old or new pension plan , signed in blood, and irrevocable. They think they're going to willy nilly going to renig, I say go F--- themselves and time to prep for lawsuits!!
I have heard the same thing 3 times this week.