Say goodby to your pension
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Joined: Jun 2001
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From: Queens, NY
Say goodby to your pension
This from Yahoo:
Verizon Communications, the nation's second-largest telecom, said late Monday it was restructuring retirement benefits for 50,000 managers in a bid to save $3 billion over the next 10 years.
Under the plan, managers will no longer earn pension benefits or receive service credits toward retiree health care benefits starting in July.
Verizon is acquiring MCI, and the combined company will also increase the 401(k) matching dollars for about 30,000 MCI managers who join the company after the deal closes.
As companies look to control costs, even financially healthy employers are freezing or cutting pension plans in a sign the time-honored retirement system is increasingly being chipped away.
The trend drew the attention of President Bush on Monday, who called on companies to protect workers' retirement benefits.
"My message to Corporate America is: You need to fulfill your promises," Bush said in a speech in North Carolina in which he called for tougher pension-reform legislation.
Hewlett-Packard this year announced that it's ending guaranteed pensions for new workers. Others altering plans include Sears, which says it will freeze pension benefits in 2006, and Motorola, which stopped offering pensions to new employees this year.
In 2004, 71 companies in the Fortune 1,000 that sponsored traditional pensions froze or terminated their plans, according to a study released earlier this year by Watson Wyatt Worldwide, a human resources consulting firm. That represents an increase from 45 companies in 2003 and 39 companies in 2002.
When companies freeze a plan, they keep it in place but halt future benefits that would have been earned. Terminating a plan involves closing it down. More companies are also not offering pension plans to new hires. Driving the trend:
Verizon Communications, the nation's second-largest telecom, said late Monday it was restructuring retirement benefits for 50,000 managers in a bid to save $3 billion over the next 10 years.
Under the plan, managers will no longer earn pension benefits or receive service credits toward retiree health care benefits starting in July.
Verizon is acquiring MCI, and the combined company will also increase the 401(k) matching dollars for about 30,000 MCI managers who join the company after the deal closes.
As companies look to control costs, even financially healthy employers are freezing or cutting pension plans in a sign the time-honored retirement system is increasingly being chipped away.
The trend drew the attention of President Bush on Monday, who called on companies to protect workers' retirement benefits.
"My message to Corporate America is: You need to fulfill your promises," Bush said in a speech in North Carolina in which he called for tougher pension-reform legislation.
Hewlett-Packard this year announced that it's ending guaranteed pensions for new workers. Others altering plans include Sears, which says it will freeze pension benefits in 2006, and Motorola, which stopped offering pensions to new employees this year.
In 2004, 71 companies in the Fortune 1,000 that sponsored traditional pensions froze or terminated their plans, according to a study released earlier this year by Watson Wyatt Worldwide, a human resources consulting firm. That represents an increase from 45 companies in 2003 and 39 companies in 2002.
When companies freeze a plan, they keep it in place but halt future benefits that would have been earned. Terminating a plan involves closing it down. More companies are also not offering pension plans to new hires. Driving the trend:
Joined: Oct 2003
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From: MAHT-O-MEDI
While I think that companies should be forced to live up to pension oblligations that they promised, moving to a defined contribution type plan is more than common. Very few industries still use defined benefit plans.
As a gov employee, I still have the option to go with a defined benefit or choose to take the earnings as a defined contribution plan. The benefit level has been whittled down so that you are punished severely for retiring before 65. I want to retire before that and my defined contribution estimates are much higher, almost double the monthly check. It puts more risk on my hands, but I am ok with that.
Stocks and bonds over the long haul are nothing to fear. I do not know who sold this tremendous risk theory to the american public.
As a gov employee, I still have the option to go with a defined benefit or choose to take the earnings as a defined contribution plan. The benefit level has been whittled down so that you are punished severely for retiring before 65. I want to retire before that and my defined contribution estimates are much higher, almost double the monthly check. It puts more risk on my hands, but I am ok with that.
Stocks and bonds over the long haul are nothing to fear. I do not know who sold this tremendous risk theory to the american public.
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From: limerick
They aren't offering it to their new employees, which is good. Pensions should never have been started, it was impossible to determine rather or not they could afford to pay the benifit down the road an we're seeing that now. Better to force employees to choose either to invest in 402k now or take a larger paycheck home. Puts the imvestment responsibility where it should be, in the employees hand.
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Joined: May 2004
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From: Vienna, VA
at AT&T they stopped doing them in the late 90s right before I started there. My current company has a full 401K match, and I prefer that.
It is money that is mine, and it is growing FAST. It should, since I put $1200 a month into it! Also, I know the company is making good on the match as I am in a position to see they do.
The pension wasn't a bad idea, but with increasing life expectancies, they were bound to break sometime.
It is money that is mine, and it is growing FAST. It should, since I put $1200 a month into it! Also, I know the company is making good on the match as I am in a position to see they do.
The pension wasn't a bad idea, but with increasing life expectancies, they were bound to break sometime.
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Joined: May 2004
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From: Vienna, VA
that's right...well maybe 5
but now with people living 15-20 years after they retire, the system is strained.
That's the source of social secirity problems, too. The 7.65%*2 was based on life expectancy assumptions from a very long time ago with a set retirement age. One of the 2 must go up or the system will fall.
but now with people living 15-20 years after they retire, the system is strained.
That's the source of social secirity problems, too. The 7.65%*2 was based on life expectancy assumptions from a very long time ago with a set retirement age. One of the 2 must go up or the system will fall.
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Joined: Sep 2002
Posts: 1,160
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From: Raleigh
Management means all non union employees, of which i am one. not a big surprise to me, just wait a few years when they try to do this to the unions. one by one, you will see some long strikes as VZ execs try to take this away from them. On the bright side, they did raise the 401k match which makes me happier than a pension anyway.
Dave
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