[BlackGTP]

I'm torn on this. I feel for them but also recognize that a government bailout sends a really bad message and I bet every company with a pension is thinking "how can I dump my pension obligations on the government"?

I have a 401k, is anyone going to bail me out if my returns aren't ample enough for my retirement? I'm at the whim of the markets with substantial YTD losses - no one is covering me, so why should I and everyone else cover a partial loss of someone's pension?

Again, really torn. I know a 401k situation is a little different as I'm planning on being at the whim of the market vs. someone who was banking on their pension. But still - it is money out of my pockets to benefit someone else that quite possibly will still have a better pension than my 401k income, even if their pension is 30% lower.

Maybe a cap on government assistance depending on the pension level or something.

I don't know.

 

[BlackGTP]

I started working at IBM right around the turn of the millennium, when they were one of the first blue chippers in '97 to dump their pensions and move everyone to a combo of a cash balance and 401k plan. The senior folks who weren't grandfathered (over the age of 40 at that time) lost bigly from a financial standpoint. The cash balance plan collecting interest at a rate of prime plus one percent, as we headed towards two decades of declining interest rates, killed those guys. They worked around 20 years under a promise of a pension, only to have the rug yanked (by a financially healthy corporation no less).

The problem is this. I started with a 401k, and if you do, you will probably end up to the better vs. a pension in the long run. Obviously it takes some knowledge to properly invest to be able to survive market fluctuations over a lenghty working career - and companies weren't great 20 years ago at providing education on the matter, though it's improved quite a bit and things like target date funds help the uninitiated a lot. But the key is no matter what happens, that money is yours from day 1 (even if there are some laggard companies out there that hold a vesting period on the employer match). Company goes bankrupt, your retirement fund is still safe.

With a pension the money is never yours until you retire. You are banking on a corporation making good on its word so you can plan to have X dollars per month in retirement. So it's not right for these people to have their retirement hinging on something completely out of their hands, and then wiped out by poor corporate decisions. The answer to that today is to completely move all new employees to a 401k plan, but for those who started on a pension, they shouldn't be left out in the cold due to circumstances beyond their control.

And yes, it is solid evidence of why having a union at your back is worthwhile, particularly for the blue collared.

I had my pension frozen and then converted to 401k in I believe 2000 or 2001.

As I said, I'm really torn on how to feel and what the right response is. Perhaps the unions and executives that are all set can share a little of the pain, especially the executives making the decisions and whose future is well covered money-wise.

I know there are all sorts of things wrong and impossible about my thoughts. I simply have a gut feeling of wrongness but no idea what to do. I guess I feel the wrongness in that the executives and unions covered their backs and left everyone else to flounder and you and I to pick up the tab.

 

[BlackGTP]

Did any GM salary employees or retirees lose their pension? Remember, every one of these years-long big pension Delphi employees started as GM employees........ (GM spun-off Delphi in 1999)

No clue.... looks like NHRATA01 has the answer.