Nissan "Solves" Health Care Problem

[Perian]

Link: http://detroitnews.com/apps/pbcs.dll...602060413/1361

DETROIT -- Nissan North America Inc. said Monday it will stop offering comprehensive medical coverage for retirees in its manufacturing division in favor of an annual stipend, in an effort to save money.

The North American arm of Nissan Motor Co. Ltd. also is switching its pension plan from a defined benefit to a contribution plan, similar to a 401(k), for new hires.

The retiree health-care decision affects employees who turned or will turn 65 after Jan. 1, 2006.

Employees who turned 65 before that date will continue to receive comprehensive coverage. Nissan said it has about 12,200 hourly and salaried manufacturing employees and about 500 current retirees in its North American manufacturing division.

[nadepalma]

That's an interesting idea with the stipend...I wonder how much that will save them in the long run? Any stats on this?

[Ming]

Pensions must go. Anyone who depends on a single company to provide for them after retirement is a little nuts. Its about as intelligent as investing all of your 401K stock in your company stock and nothing else. It was an idea which had its time, but in the age of layoffs, cutbacks, Enron-size bankruptcies and job hopping "pensions" no longer make any sense. I'm a little surprised that Nissan America (which is a strange company name, given that NISSAN is a word derived from "JAPAN INDUSTRY") ever offered pensions in the first place.

[01cavalier]

Seems that this solution makes sense. With the UAW though, I don't think it would ever happen.

[SRX7697]

may I ask what pension plans Toyota has to deal with? why isn't the UAW hurting them so much?

[steverino]

Originally Posted by SRX7697

may I ask what pension plans Toyota has to deal with? why isn't the UAW hurting them so much?

I believe Toyta has only one plant with UAW representation and that's the facility they share with GM in CA. called NUMMI. They probably stuck GM with the UAW pension tab.

[uujjj]

Originally Posted by SRX7697

may I ask what pension plans Toyota has to deal with? why isn't the UAW hurting them so much?

No, Toyota has a decent pension. They just don't have many retirees.

[Randle2I]

What exactly is the differance between a Stipend & comprehensive medical coverage? Is it simply that a Stipend is a set amount each year?

[mgescuro]

Pensions are for the dark ages.
Let people save on their own. IRA's. 401K's. Etc.

[rsbaker]

Originally Posted by Randle2I

What exactly is the differance between a Stipend & comprehensive medical coverage? Is it simply that a Stipend is a set amount each year?

It means don't get sick! I will certainly not come close to covering a monthly health insurance premium.

[redimpss5]

Here is you 40 dollar watch, now beat it!! BTW, I hope you were able to save a couple bucks after making a lot lower then most other people.

[mike's 01ws6]

It is dirty to promise things to people then renig later to boost stock price and fatten executive bonuses. If they need to change then make this applicable to future employees. These people are retired saying that they need 401k's to have saved more, etc is really stupid.

[Road Kill]

If they want to change the rules they should start with new and recent hires. To change things after promising otherwise is not only unfair but also morally repugnant. It's the same type of heavy handness that brought unions about and why some people still feel they are neccesary. I personally don't like unions but when I see things like this happen I can understand why they exist.

[mkaake]

Originally Posted by mike's 01ws6

It is dirty to promise things to people then renig later to boost stock price and fatten executive bonuses. If they need to change then make this applicable to future employees. These people are retired saying that they need 401k's to have saved more, etc is really stupid.

yeah. let's stick it to the man. we all know the only reason they did this was to increase the salary of the fat cats!

*cough*

anyway, I don't like it when a company renigs either - although I do appreciate that they basically are only doing this for people who haven't retired yet (though I'd like a little more warning than 1 year if I was 64 and had (yes, foolishly) planned on having the company cover my butt until I died...

Of course, for people in relatively good health (read: eat right and don't drink and smoke up a storm), they'll probably end up better off with the stipend. Heck, my family has had to go without insurance for at least 4 years, and we don't spend more than 500/year on health care. Of course, we don't eat crap, we get mild excercise, and we don't smoke... but I'm sure that has nothing to do with it...

[johnriley]

Originally Posted by mgescuro

Pensions are for the dark ages.
Let people save on their own. IRA's. 401K's. Etc.

_These_ are the dark ages. Dark Age is all about forgetting fundamentals that were widely known and accepted, like, in this case, shared risk. The every- person-for-himself approach completely eliminates the benefits of shared risk, which are considerable.

You take a pool of money and divide it up and give it to the employees and say, see ya, have a nice retirement. The guy that lives to be 90 might run out of money. The money that went to the guy that died the week after he retired goes to his kin, but that was not what pensions are for.

You take a pool of money and _don't_ divide it, and the money that the guy that died early was going to get stays in the pool and pays for the guy that lives to be 90. Which is the idea behind pensions - to support people.

Trouble is, the every-person-for-himself philosophy has spread to companies too, thanks to a lax attitude about regulation and pension funding. So the idea of an existing pool has been undermined. This is not progress.