Article from my local newspaper today:

Frozen pension plans leave workers in cold
Lynchburg News & Advance
December 19, 2005
Employees across the nation are feeling betrayed as one large company after another is pulling the plug on retirement plans. Verizon is the latest corporation to announce a freeze of pension plans. The communications giant says the move to freeze plans of 50,500 managers, combined with cuts in retiree health care benefits, will save about $3 billion over the next decade. This is from a company that earned $7.8 billion last year alone. Despite a healthy fiscal profile, Verizon and other booming businesses appear to be heading off escalating pension and health costs as the baby boomers approach retirement age. It

 

[QUOTE=valentine,Dec 19 2005, 03:38 PM] ......The news is worse for employees who have borrowed heavily against their 401(k) plans for homes and their children

 

Maybe you are and maybe you're not. Anyone who borrows against a retirement plan, particularly if that person is in their 40s or 50s, must be a little foolish or realllly hardpressed for $$. There are good reasons for doing such a thing, I'm sure, but that close to the possibility of retirement is too close for comfort imho. One thing is certain, some of those folks are going to REALLY be hurting. I am having a hard time understanding how it could be just, though, to pay out millions to executives, yet cut pensions to the "working class". I also have a wee bit of a lack of understanding about that $700,000 lump sum deal. I can't really imagine that getting a lump sum payout like that would be a good move taxwise, but I'll need to consult our resident CPA on that one.

 

Some things will never change. That is one of them. The little guy gets a screw job every time.

 

Fortunately for Verizon's craft employees. This only affects management people. Most of craft is union and they all have contracts which Verizon just extended for 5 years. After that they can probably expect the same treatment.

 

Val, I'm sure that during your time in NM you heard some of the scuttlebutt about the management transition. Pensions are a big part of the staff's anxiety (they're still awaiting an announcement, which may come today. Or not).

One of the attractions of LANL as an employer for scientists and engineers has been its relationship to the University of California system and, in particular, their pension program. It's flexible, but the basic, or default, option for everyone is a true pension (that's so well funded that individual contributions haven't been necessary lately, making it quite attractive indeed).

Because whoever gets the operating contract for the lab won't be UC (but maybe a UC-participating LLC), the pension fund, worth billions, will transition to the new entity. Because the new entity will be a private company, it will be able to jerk the fund around more than the UC (as a State of California institution) has been able to. Hence people's anxiety.

I can say that I'm a lot more comfortable since I left and cashed out my equity in their pension -- and rolled it into a 401(k) type account that I control. The notion of being at the mercy of some large, uncontrollable entity who promises to "take care of me" just isn't appealing in this day and age. HPH

 

Few things scare me these days but folks losing their pension plans that they were counting on to see them through retirement is just plain scary. What are these folks supposed to do when those things go south? I think homelessness will have a new face in the coming years.

 

...but we'll always be able to snuggle down in our S, right Granny I think the Chapter 11/13 judge lets you keep your car

 

Have you ever tried sleeping in that car? I have and it ain't fun. Okay, now off to work I go. Happy?

 

However, the LANL UC employees were assured they would keep their plans. All of that, of course, remains to be seen. The contract award was anticipated yesterday, however, it did not come down. I suspect it was held up due to the little incident that occurred outside the other big lab in NM yesterday. I also understand that if the award goes to the team that I am more familiar with, those folks will get a very nice plan, but again, nothing is ever positive with any company.