Pensions

[JcMack]

Part of my income is from a pension (totally company funded) accrued over 35yrs of employment with one company. I had those 35 yrs in, in late 2001. The company I worked for offered a lot of us old farts across the country an early out that included a pension who's dollar figure was determined by a calculation of years of service + age + something else like phase of the moon. I was not quite 55 so I've been getting 62% of what would have been full pension at 65. This since 2001. Keep in mind if we'd have stayed that most would have been forced out anyway and anyone staying would have not only forced to a dramatic pay cut, but have to take up the slack for those that left.

Why do I bore you with this? I know that probably 75% of any folks reading this post quit after the second sentence. I just wanted to give some personal background. I still receive corporate letters and for 6-8 years now all the P&L statements bemoan the loss of profit due to the millions needed to support us "pre 65 pensioners". This aggravates the hell out of me because nobody I know wanted this early out and the pension fund is funded by investment in it's own stock. Stock is now worth less than half of what it was 2 years ago. I see a lot of talk now about underfunded pensions at state and local gov. levels. Do you see the next attack being on pensions belonging to folks who at the very least contributed to society, taxes, ss, and so on, and so on. Never, I repeat never, is the monumental drain on our society via entitlement programs ever mentioned. I see the current socialist medicine program being rammed down, as yet another slippery eel approach to yet more entitlement.

 

[Faulkner]

I think pension issues are different. Unless it's a government pension, the government is not really involved in pensions, yet. You or the company on your behalf contributed to the pension. YOU did not establish the rules by which you could participate on the pension, and you "paid your dues" so to speak by the vested time with the company. If the pension fund starts to have solvency issues, you could be in for some negative adjustments.

I've been with my company 25 years and have pension and 401K, which is fortunate because I will probably never see a dime of the social security TAX I've paid in my lifetime.

 

[Bailey Boat]

I can't think of any company funded retirement program that isn't in danger today. Of course IRA's aren't fairing much better and SS is, and always has been a joke. The sub surface mason jar is looking better every day.........

 

[PRC74]

I do. I think it is just a matter of when. The government is going to steal all the money in private pensions and 401Ks. Argentina did it a few years ago. After all it would not be"fair" that people that worked and saved not be forced to give it to those that didn't. That and killing off the old folks to save social security is all part of the elites mindset.

 

[gregintenn]

Do you see the next attack being on pensions belonging to folks who at the very least contributed to society, taxes, ss, and so on, and so on.

Absolutely. I work for the state government, and we are about the only people I know of left with an old style pension program. I don't particularly like pensions, but I've worked there 17 years for quite a bit less money than I could have made in the private sector, with the pension being one of the driving factors for staying there. I'm eligible to draw from it after 30 years of service. This was the deal we made, and I'm holding up my end, I DO expect to receive the pension I was promised. Most other people think I don't deserve the pension as it is "their" tax money. They don't understand that while I see a mountain of government waste every day, I've provided a valuable service to them, and this was part my compensation. The great sense of entitlement most in our country feel, I believe, will be our downfall.
As for your social security, it's already been spent. There's no way that program can continue in it's present form.

 

[n4zov]

I am no financial expert but I believe that all pensions - public and private are under serious threat. Regardless of what comes out of Washington, our economy is in dire straits and its condition is likely to get much worse. Our increasing National debt and the Government's willingness to print money are eventually going to cause a big inflationary cycle. When that happens, pensioners' checks are going to be worth a lot less than they are now.

In addition, tax payer funded public pensions are going to continue to shrink because of decreasing tax revenue to fund them. Unless there is a remarkable turn around in the economy that trend is likely to continue. I can't think of a single reason to be optimistic about our economy.

Let me mention a personal example of how idiotic our Nation's decision making has become. My wife suffers from Parkinson's and her doctor had approved her for a motorized wheelchair. It was delivered yesterday along with an invoice for $5200+ paid for largely by U.S. taxpayers through the Medicare program. Anybody want to guess where her new wheelchair was made? Yep, it was made in CHINA! With unemployment hovering at 10% and the Government spending trillions for unemployment and stimulus, they buy wheelchairs made in China. That is a typical example of how dysfunctional our society has become and why our economy (and pension funds) are in big trouble.

 

[GM4spd]

In my company's pension fund--it is ALL their money--I did
not contribute a dime. Problem is they CAN cancel it at
anytime,very legal. Everyone I know who has retired chose
to take a LUMP SUM (all your money at once) for this very
reason. At this point in my life(age 61)--I am still working,
my pension has ceased to increase at this point,however,
I could risk losing it all--if the company decided to do so
for financial or other reasons. I'm gambling(because it is
an oil company) that they will stay solvent. Every year that
I work I'm still knocking down a six figure salary and that is
one year I am not spending retirement money. All these
pension situations are risky. Pete

 

[Faulkner]

Why does it seem to be so hard for the government to understand that the best way out of THEIR financial issues is to spend less, not more?

 

[gregintenn]

Why does it seem to be so hard for the government to understand that the best way out of THEIR financial issues is to spend less, not more?

Because the majority elects politicians based on what they think they'll recieve in return. It's all about the entitlement mentality. "What's in it for me?" No one wants to pay taxes, but pretty much everybody wants something for nothing.

 

[johngalt]

My company never had a 'defined benefit' type of pension fund. They contributed x% of our salary into a fund which accumulated earnings. This was in addition to our 401k. A few years back, they terminated the fund and dumped the money into our 401k.

Then we got bought out by another company, with their own pension plan. They call it a 'cash balance' plan, which is similar to our original plan - they contribute x% into a fund that accumulates savings at a defined rate. At my point in my career, I doubt I'll accumulate much money there.

I too am worried that the govt will raid the 401k and other private savings/investment accounts. I've heard of a couple balloons being floated:

- Raid the 401k accounts for a portion of their value and dump it into the social security fund
- Require a portion of the 401k to be invested in Treasury Bills.

The jealousy and class warfare is going to be our downfall.

 

[neiljrosen]

Promises are broken all the time, that's why I follow the #1 Boxing rule when It comes to matters of finance. "Protect yourself at all times"

 

[JcMack]

Promises are broken all the time, that's why I follow the #1 Boxing rule when It comes to matters of finance. "Protect yourself at all times"

No offense meant: It's tough to win at boxing when the people in your corner are trying to convince you you could benefit by throwing the fight.

 

[dennis40x]

I think pension issues are different. Unless it's a government pension, the government is not really involved in pensions, yet. You or the company on your behalf contributed to the pension.

You may want to read this:

Welcome to the Pension Benefit Guaranty Corporation home page. PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974

 

[BarbC]

I don't know if your pension company paid into the Pension Benefit Guaranty Corporation (PBGC) but it would be good to find out.

 

[feralmerril]

I did it wrong. For what its worth heres my story. I retired january 2,000 with 35 years at lockheed aircraft. I was single and HAD what looked like a fortune in my 401K. I was almost 59 years old.
There were three ways I could retire on. 10 year certain. Regular straight line, I think that was about $1650 a month or the 3rd option that I chose, about $2,400 a month untill 65, then cut to about $850 a month.
At the time I was in pecular circumstances. Due to divorice, child support and bad manageing, I was haveing to work 65 to 70 hours a week to eat. At the same time I had what then looked like a fortune in the 401K. I opted retirement and get a life.
Three months later, march of 2,000 was the huge dive in the stock market. I was all in the risky high tech stuff and lost OVER HALF of my 401K!
Other bad things happened in my personnal life at the same time. I had a girl friend I had taken in that was desitute with no insurance that got cancer and died on me. I shelled out at least 50K on the event.
My dad had alzheimers, was stubborn and wouldnt move out of the boonies to assisted liveing in wisconsin. That involved uncountable trips back and forth and also was breaking me. Really at that point had I not retired, I would have had to quit to handle him anyway.
Then I remarried. Now I had to get medical insurance for my wife. It just DOUBLED this month! After medical deductions, I now net about $440s instead of the $2,000 + when I first retired in 2,000!
We get by okay. God has handled things in other areas. I wrote this personnal stuff to make you younger guys take a better look before you leap!

 

[neiljrosen]

No offense meant: It's tough to win at boxing when the people in your corner are trying to convince you you could benefit by throwing the fight.

That leads to another rule I always follow.
Trust AND Verify.

 

[oldRoger]

No money

In the end many corporations promised more than they could deliver. They in effect told us what we wanted to hear.
But, as business declines and the profits end, then sales decline there is no money to pay the promised benefits be they insurance or pension. We can bitch and moan but there is NO money.
I was in the GM Salaried program, when GM was nationalized and mostly turned over to the UAW the salaried insurance programs were terminated. The pension program which was in a large part funded by the individual was out of reach so is still limping alone. It is part of the PBGC, but the PBGC is really the taxpayers and we are broke.

The next to take the hit will be the Local, State, and Municipal Employees insurance and pension programs. GM promised more than they could deliver but in the promise category they are pikers compared to the politicians.
California is a disaster that is happening right now.
Somehow the public employees expect the taxpayers to come up with the money to meet the politicians promises, but like GM the money simply isn't there.

 

[gregintenn]

I did it wrong. For what its worth heres my story. I retired january 2,000 with 35 years at lockheed aircraft. I was single and HAD what looked like a fortune in my 401K. I was almost 59 years old.
There were three ways I could retire on. 10 year certain. Regular straight line, I think that was about $1650 a month or the 3rd option that I chose, about $2,400 a month untill 65, then cut to about $850 a month.
At the time I was in pecular circumstances. Due to divorice, child support and bad manageing, I was haveing to work 65 to 70 hours a week to eat. At the same time I had what then looked like a fortune in the 401K. I opted retirement and get a life.
Three months later, march of 2,000 was the huge dive in the stock market. I was all in the risky high tech stuff and lost OVER HALF of my 401K!
Other bad things happened in my personnal life at the same time. I had a girl friend I had taken in that was desitute with no insurance that got cancer and died on me. I shelled out at least 50K on the event.
My dad had alzheimers, was stubborn and wouldnt move out of the boonies to assisted liveing in wisconsin. That involved uncountable trips back and forth and also was breaking me. Really at that point had I not retired, I would have had to quit to handle him anyway.
Then I remarried. Now I had to get medical insurance for my wife. It just DOUBLED this month! After medical deductions, I now net about $440s instead of the $2,000 + when I first retired in 2,000!
We get by okay. God has handled things in other areas. I wrote this personnal stuff to make you younger guys take a better look before you leap!

I'm sorry to hear about your situation, but I'm glad you shared it. I'd sure like some suggestions from someone who's seen and done what all you've been through. I'm trying to secure my retirement, but realize that God can change your plans in the blink of an eye.

 

[feralmerril]

I didnt mean to sound like I was wineing about it. Dont get me wrong, we are doing well even so. I was trying to point out also that things always seem to change no matter how many bases you think you covered. Crap happens. We could be liveing better right now with more trips etc, but when I retired I didnt think I was going to get married again. However I did marry. My wife never had a good job, was married to a nere do well that couldnt support himself! She did housekeeping, etc under the table without ever hardly paying in to soc. sec. She isnt in good health and is 17 years my junior. My retirement quits when I croak, none goes on to her as I was single when I retired. So there is a danger zone for quite awhile if I croak soon. While we still have a respectable 401K, I am not comfortable spending it for that reason.
I have read of many of you speaking of your wives doing a career and in many cases, makeing probley more than yourselves. In both marrages I NEVER was that lucky. They were strictly housewifes and never brought money in. I always had a chance at a lot of overtime and reasoned it made more sense to work 65 to 70 hours a week than have my wife work for probley less than half of what I made a hour. I thought I was being a hero. Unfortunatly I guess the ex didnt appriciate my thinking, found a boy friend and wiped me out. Maybe someone of you can learn from my stupidity, thats why I write a lot of this personnal stuff.

 

[bk43]

Maybe someone of you can learn from my stupidity...

Think you're being a little hard on yourself. Not your fault when somebody does you wrong...the bad is on them.

Bob