Flannery stated he just concluded discussions with the Board and there currently will not be any changes to the pension plan. Very positive for employees who are eligible.
29 replies (most recent on top)
@4aiq no kidding...that just happened like a couple months ago. Where ya been, on a boondoggle to Switzerland?
GE could cut dividends to help with cash. Cash starved companies typically do this.
You folks need to be careful with the phrase "maximum PBGC guaranteed". It's not as simple as a 100% guarantee. There are a lot of rules and regulations on how it is calculated. For instance pension changes in the last five years may be ignored.
The converse is also true. While "maximum PBGC guaranteed" is not a 100% guarantee, it is still pretty good. Let's stop with the hysteria, okay?
The easiest way for GE to deal with its pension problem is to just stop continuing the pension. End it, as is, right now. You'll get all that you and the company contributed to this point and GE will have to make up for what it failed to contribute. We'd then watch it grow as any other investment grows but with no more contributions.
To make up for the future pension opportunity, we'd all have to increase our 401k contributions. Yeah, that would s--- but it wouldn't be the end of the world.
That is not how it would work for current GE retirees, who are already collecting their pension. There is no reason for panic. Even in the remote chance that GE declares bankruptcy at some point in the future, most current retirees should not be adversely affected.
From the PBGC site(https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee):
What age do I use to find the maximum guarantee amount that applies to my benefit?
If you first start receiving benefits before your employer enters bankruptcy, use your age on the
date the employer entered bankruptcy.
So if you are already collecting a GE pension the age in the chart used to determine your maximum PBGC benefit is your current age plus the number of years from now that GE enters bankruptcy (if that ever happens). The maximum amount increases significantly with this age.
For example, if you have just retired at 60, if GE goes bankrupt this year, the maximum would be $3523/month, if GE goes bankrupt in 5 years, the maximum would be $5420/month, and if GE goes bankrupt in 10 years, it would be $8998/month.
My Dad's company went bankrupt when he was 70 years old, and PGBC picked up his entire pension, and he was not adversely affected.
The maximum PBGC guaranteed pension is $3,523.29 per month at GE's normal minimum retirement age of 60. That's much less than $5000, and it's less than I've already accumulated in the GE plan. PBGC is much better than nothing, but I suspect it would bring a pension cut to a significant fraction of GE employees if they retired at age 60.
https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee
You guys at GE still have a pension? Consider yourselves lucky. Working for a competitor (Siemens), they cut our pensions off at the year 2003!
Some people like to tell themselves scary stories at night.
Lot of uninformed people here...PBGC covers. Read and learn. Talk later. And then talk less.
suggested reading. Covers GE right from the start: https://www.amazon.com/Retirement-Heist-Companies-Plunder-American/dp/1591843332
For the morons screeching “reduced pensions at 15 cents on the dollar”, well, you’re morons. The GE fund is insured, meaning you’ll get what you earned, up to roughly $5k/month...regardless of what happens to GE.
This will give you some idea of what may happen sometime in the near future. A frozen pension plan.
http://www.pionline.com/article/20160114/ONLINE/160119918/boeing-reaches-deal-with-speea-union-that-will-freeze-pension-plan-at-end-of-2018
https://www.seattletimes.com/business/boeing-will-freeze-pensions-for-68000-nonunion-employees/
The pensions ate commonly reduced like this. The .15 to .25 may be a generous estimate. I have known people personally that have home through this. Do yourself a favor and don't count on it. Stay debt free and do something on the side you enjoy in retirement. Bottom line is that you can't trust companies to take care of you in retirement. They are out of that business.
@3rri, you are correct. Being underfunded by over $30 Billion it doesn't take a rocket scientist to figure out what's going to happen.
You can rearrange the deck chairs on the pension banana boat any way you like but it's still going down.
What JF actually said was no changes to the pension "for now". Not the strong statement of commitment to the pension we deserve. The intent is to quiet the noise and stop a mass exodus of experienced employees. They don't need to freeze it as this will resolve itself when they layoff senior workers. This just ensures it's on their terms. Please don't believe the pension is forever guaranteed....you've seen this movie before!
Bull. You're just trying to scare people.
The GE pension is currently funded >80% and PBGC would make up for much of the rest based upon its rules. ".15 to .25 cents on the dollar" isn't even plausible. You're going to have to try better.
When PBGC takes over pensions after company abandonment of responsibility, pensioners are lucky to receive .15 to .25 cents on the dollar for every dollar they are due. Look for this to happen with GE in 2020.
No one said pensions would be "gone". Everyone knows they would be reduced. Everyone except people who think their employer is their daddy and the government is their mommy.
The GE pension is guaranteed UP TO A CERTAIN AMOUNT by the PBGC. For most people, this means you would receive 100%. If your pension benefit exceeds the guarantee amount (which, I believe is currently over $5k/month), you would receive less under PBGC payment than under your company pension plan.
@2snl, first never use Wikipedia as a source.
Second, the “termination” referred to by PBGC is the employer’s termination...it means the employer is filing claim to have PBGC take custody of administering payments. It DOES NOT mean your pension is gone.
Jeez there are some vicious (or viciously stupid) people commenting here.
No, pensions are not guaranteed. Sorry. Here is a two second search through wikipedia:
*Distress termination
An employer may terminate a single-employer plan under a distress termination if the employer demonstrates to the PBGC that one of these conditions exists:
Employer faces liquidation under bankruptcy proceedings.
Costs of continuing the plan will make the business fail.
Costs of continuing the plan have become unreasonably burdensome solely because of a decline in the employer's workforce.
If the PBGC finds that a distress termination is appropriate, the plan's liabilities are calculated and compared with its assets. Depending on the difference between the two values, the termination may be treated as if it had been a standard termination or as if it had been initiated by the PBGC.
Termination initiated by the PBGC
PBGC may initiate proceedings to terminate a single-employer plan if it determines one of the following:
The employer has not made its minimum required contributions to the plan.
The plan will not be able to pay benefits when due.
PBGC's long-term cost can be expected to be unreasonably higher if it does not terminate the plan.
A termination initiated by the PBGC is sometimes called an involuntary termination.*
The benefits paid by the PBGC after a plan termination may be less than those promised by the employer.
Again, sorry but it's important for people to understand that only they have final responsibility for taking care of themselves.
The way you understand it is wrong. Whoever told you that, slap them.
The way I understand it, employee pensions are guaranteed by the federal government. Kind of like federally insured bank accounts
The more years i can get outta building the pension the better. when they freeze it ill look elsewhere otherwise I'm riding this garbage truck to the dump.
Looks like you lot are losers at work and in the bedroom. Most people don't want to be seen as losers but you lot think it's a virtue.
Spot on ; these jokers are kicking the can down the road. Don’t for a minute think this does not impact the company balance sheet at some point. More of the same make millions as CEO and pass the baton 10 years down the road to some idiot that takes over for him. In the mean time the stock price will suffer and maybe in two years it will break $20/share. My hair is getting gray and my wanker needs the blue pills to stay hard. I don’t have time for GE bull crap anymore. Translation, GE is a pig of a stock.
So how do close a $30B gap? I think they may have kicked the can down the road.
I find this very hard to believe. Pension is vastly underfunded, there is no cash generation and they just named a total kiss a _ _ who thinks he knows it all as the cash leader. No way there will not be changes in the future