Possible pension buyouts before sale of aero.
Tired Director can you confirm this?
21 replies (most recent on top)
You can only take the cash if you chose that option after the GE takeover fell apart. Otherwise, you've signed up for either an annuity or cash on the "cash and carry" option, or you will get a pension. This assumes no future buyout. It's true that taking the cash provides much less than a pension IF you've been with the company for 20+ years and are over 60. But let's face it, do you really expect to make it to 60 at HON and do you really expect HON to be around for 30+ years to pay your full pension. If they go out of business, your pension would be turned over to the government and you'd be lucky to get pennies on the dollar. I took the cash when I left. Ultimately, it's a personal choice and you should get a great financial advisor who's smart enough to know that major companies can fail.
Don’t be the band that kept playing as the Titanic sank...have a lifeboat in your sights folks
Either way you look at it, HON AERO will not survive this. They are now looking at selling off product lines to "make q3". You read that right: cannibalizing the company to "make the numbers". Get out of AERO at your earliest convenience. The ALT couldn't be more clear in their intentions if they painted it on the side of the 2101; AERO will be sold off piece by piece,keeping the stock price as high as possible until there's nothing left to sell, Mke Mdsen will shut the lights off and lock the doors on his way out.
If you can take the lump sum do it, disconnect everything you can from Honeywell. Also if you don’t have a good financial representative you better get one that’s not a family member.
It all depends on 2 things.
1) if you are far from retirement still, can you invest the lump sum better than Honeywell?
2) if you have a very big pension, do you trust Honeywell not to eventually dump the pension onto the US government where its insured to $6000/month I believe?
Historically low interest rate means very expensive buyout because pension rules require payment equivalency. Buyout would be a terrible decision for the company & stockholders. Good luck to all.
I took the lump sum on the advise of my boss. As he said "would you trust Honeywell for the next 20 years?". If there is a way screw pensioners they will find it.
@2vvr - Thank you, i missed that CFO tidbit. Must have been multitasking. Wish I could understand the math behind all of that.
My experience with a buyout was with another Aero company - i looked at the payout vs the annuity meant I would need to collect monthly for a little over 7 years to match the lump sum figure.
Looking it it from a 10000 foot level, I kept the monthly stipend.
A pension buyout rarely favors the employees
Last time Honeywell discussed it on an Earnings call, the CFO said we didn’t do it because it did not favor the shareholders. Same for selling it to an insurance company
If they offer it, use that amount to get an annuity estimate. It usually only provides about 70% of what the pension would pay. If you have reason to believe HON will go bankrupt or you may die early the lump sum may be a good option
Test my blacklist
Pensions are expensive for companies due to ERISA. Many companies have offered a one time irrevocable lump sum in lieu of future benefits through the annuity. I’m very surprised Honeywell hasn’t gone down this path to date. As speculation, dumping future pension liability could be a selling perk.
After all it is a site about Layoffs. I got a pension buyout from GE a couple years ago at 57. Worked there a long time ago. Got letter in the mail, unexpectedly, had 2 weeks to decide. I did not have a lump sum option initially. I wasn't eligible for pension until 65. I said yes and got a check very soon afterwards. I figured I would be 74 to get that amount in pension payments. I have been thinking HON would do the same, get pension liabilities off books. Maybe only for those who haven't started taking a pension?
I’m more interested in the pension buyout. This seems like a very likely event given extraordinary low interest rates Over the last decade.
They could use that to make a very low future value calculation of the pension ignoring the coming tsunami of inflation.
I've been following this board since well before I was sent packing almost two years ago.
That said, a "dumping ground of misery" is such an apt description of so much of what goes on here.
Sad, but true.
HIS is also for sale......
No. It’s not true.
This is such a dumping ground of misery.
@omw
If propulsion stops RnD, it has 10-20 years of high profit parts sales. If GE re-engines the T55, part sales start drying up sooner than later. Either way, you can assign a dollar value to it.
Now, for the speculative part.
There are investment firms that will offer a 1 time cash payment for the right to those projected revenue streams. By coincidence, Standard Aero was purchased this year by one such firm, The Carlyle Group. It would be much more profitable for them if they owned the OEM part supplier for their overhaul shops.
Alternatively, someone like Caterpillar designed turbines to power construction vehicles. There could be a business case there. Otherwise, plenty of Asian companies would buy engines if they are allowed to by the US.
Someone that actually wants to make aircraft engines perhaps. However, good deal or bad deal I think the only think that would matter for a deal to go through is how much cash Dairya**and his close cronies would be able to put in their pockets. That is what a deal is about for the decision makers. Zero long term interests
Takws two to tango.
Aerospace can barely sell an empty building let alone a whole business.
Who exactly are you proposing would be the partner at this fire sale dance?
Ps.. they dont tell directors about divestiture plans.
Let it play out. You’re stressing over story telling