This comes straight from an HR insider. Manditory lump sum pension buyouts are coming within the next 4 weeks in mid to late June. You will be given a lump sum figure and that's it. Ford is getting out of the pension business while they are still profitable. HR would not say if that pension buyout ended your employment. More to cheerful garbage is coming my friends. It just won't ever end. Thank you Jim and the Ford family too. Sleep well you SOB's!
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Offering just a lump sum instead of a monthly pension only makes sense I can't imagine how many Ford retirees there are. Ford can't continue to stay alive supporting all of them while they live very long healthy lives. Ford is in business to sell vehicles , not support retirees. Offering just a lump sum instead of a monthly pension only is a great idea.
Pensions are a thing of the past. Wonder why Ford can't keep up? Look at the fact that Ford still has a pension plan even though no new hires have been eligible for years. Cut the plan or any worker that may have been close to eligibility in my opinion as most acted like they were entitled as well and I hated working around them.
Ford currently gives employees a choice between a monthly pension or a lump-sum payout at retirement (people hired before 2004). This post seems like it is saying that Ford will no longer offer the monthly pension, they will only offer a lump-sum retirement. There's nothing said about freezing pensions as some other replies are mentioning. This idea is fine with me. I won't have to struggle with the decision between a monthly pension or a lump-sum anymore. :)
If Ford does freeze the pension, they will likely give 1-2 years advance notice. That's what other companies have done.
ford announced in January 2018, they were capping pension accruals at a Max of 35 years effective December 2019. That's two years notice.
Also, the pension has been de-risked to minimize how much they need to contribute. You can find the investment info, number of participants and liabilities in the annual funding disclosure mentioned in another post.
Why Ford hasn't frozen the pension plan is beyond me. If they did that nobody eligible would accrue going forward and that incentive to stay would be gone. They would lose a number of people through attrition. Instead they fire people.
Want to cut costs, freeze the pension NOW.
"The pension is in great shape and the best it's been in the last 3 years."
Corporations hate them because they are very regulated and more importantly expensive to fund since they are giant annuities. As such in years when interest rates are low annuities payout less hence corporations pick up the slack and that hurts bottom lines.
Getting them off the books means pensioners need to deal with how to invest their lump sum and absorb ALL the risk.
This is why GM and the old Chrysler did what they did as it no longer shows up on the balance sheet.
Pensions have rules set by the Federal government/IRS. Lump sums weren't even an option until about 10 years ago. Companies would love to force everyone to take it to get off their books but it's not allowed.
The pension is in great shape and the best it's been in the last 3 years. Go into My Ford Benefits and the legally mandated pension status document published annually.
Educate yourselves instead of being fear mongers.
Terminating a pension is a sign that a company is in trouble but healthy companies do it too. If Ford's pension is sufficiently funded to convert the accured benefits to cash, Wall Street will love it....
GM terminated their salary plan and it was't timed to their bankruptcy or mass layoffs,.
Not saying this is what Ford is planning.....but I don't know whay it has not already happened.
Can Ford terminate the pension program at any time - yes, legally they can.
Would they? Doubtful. It would send the wrong signals to the market,, that Ford is much worse off than led to believe. Companies usually only do this step these days if going into brankuptcy,
If anywhere true, likely going to make an optional pension offer with a little extra bump to those that just left, those that took buyouts last year.
The pension was frozen on on 1/1/04 which means it was closed to new hires. The pension can be terminated which means people will not continue to accure benefits. Benefits earned up to the date of plan termination are protected. Depending on the terms of the plan termination, you could still recieve a monthly benefit of what you accrued up to the termination date or the value could be coverted to a lump sump cash value and rolled into anothe Company plan, mostt likely the FRP which is the retirement plan for post 2004 hires.
I have not heard anything about plans to terminate the pension.
I have seen this fallacy more than once on this board. No such thing as a mandatory buyout. They can offer a buyout to retirees currently receiving monthly payments or to someone retiring or leaving the company but nothing is forced.
How do you know
Hopefully Jimmy is developing a self driving desk that will take him back to western side of the state.
…...but at least we'll have self driving vehicles and robots. ROBOTS! Ford won't even be a top ten automaker within the next 5 years.