If an employee with pension and HRA dollars for medical insurance is let go and the company files for bankruptcy in few years, is the pension annuity and HRA protected for them or is there a chance of benefit reduction or lose it completely?
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@req+1w0pa0OM - "at age 55, PBGC Monthly Max for Straight-Life Annuity is 3344. Goes up about $300/month for each year (age) after"
Good info. We know the Ford pension does not go up with inflation. Do you know if PBGC does?
@tcn+1w0pa0OM the GM Delphi & Ford Visteon debacles were a real lesson. esp for the white collar staff. you can do everything right and they still can throw u under the bus. how great Visteon is, come over to the orange!
Everyone, get out while there is still time.
Ask GM retires what happened to their pension when old GM went through bankruptcy. Pennies on the dollar was the outcome. It all depends on what the bankruptcy judge rules. Remember: real debt comes first (ie the loans the company took out), followed by the bond holders, etc. I believe pension is just one rung above common stock holders. Remember: when a company goes bankrupt they are typically insolvent (ie cannot pay off the debt they have). The bankruptcy judge with his Harvard and Yale banker friends will skin the company clean before the employees see any of that.
Hourly? No chance of reduction.
Salaried? Total elimination is possible.
at age 55, PBGC Monthly Max for Straight-Life Annuity is 3344. Goes up about $300/month for each year (age) after.
HRA are not guaranteed or insured, and may be reduced or suspended at any time and for any reason.
Ford pensions are protected by PBGC, but if transferred to an insurance annuity, would no longer be protected. (Google pension risk transfer) pbgc.gov has all the details spelled out. Max monthly guarantee for a 55yo is around $3k/mo, which is why many people take the lump.
Are pre-Medicare monthly HRA dollars protected?
Pension is protected by federal govt through pbgc in bankruptcy. Could be reduced by a percentage but I don’t know how they determine how much
Also possible Ford could cash out pension by converting it to a separate annuity and/or lump sum. IBM did this a few years ago. Google ibm pension de-risking for more info