What do you think about these offers companies are making to their long-term employees? Some very big companies are offering $50,000 to $150,000 to their workers that were covered by defined benefit guarentee plans. I saw one that cracked me up, instead of getting $900 a month and discounted health care, this company in trying to reduce its risk and shifting all burden on employees offered its retired employees who are collecting $900 and pay $130 for health care under their plan $60,000 and $5,000 to get them on the Health Insurance Exchange. Meanwhile this same company raised the benefit plans of it's upper-management higher and lowered the amount they pay for medical and give them free life insurance. These poor people who worked 30 to 40 years are going to burn through these stupid offers in less than a year. Here's another great offer, they offer $90,000 and $20,000 for their retiree health care benefits of 30+ years working. So instead of paying them $1800 a month for life as a defined-benefit plan their offering $110k, how can any employee think of taking that lump-sum if their young? If these plans are so hot, how come the companies offering them are not taking them away from upper-management and their CEOs? Shows how little they care about their workers, do you think it's a good idea for people to take $80,000 instead of a guaranteed $1500 a month plus health-care?
My wife is former State Dept who landed an exec position with a Fortune 100 company. She has been there 14 years and her DBP cash goes up $55K this year, and that amount increases $30/year until it hits the max at 20Y of employment. Truth be told the corps cannot afford these plans any more than IL can afford their civil pension system. They have to offer what they can to get these people off of their books. Simply calc the NPV of the cash payout and add in the health insurance -- Obamacare was a huge boon for the large caps offering these DBP as the employee knows that they can receive coverage with a pre-existing condition that doesn't involve COBRA. Sure, the coverage is shit, but they will do almost anything for that lump sum, and the CEOs know it.
I think we all know the best way to deal with this problem is to kill all public state and federal employees when they reach age 65. And if you have ever had to deal with one it shouldn't be that hard.
Ok I agree to a certain extent, I have a brother who after working 30 years will Pension Spike his last year and dump all his unpaid vacation pay, sick days and get his final promotion. In California we have Fire Chiefs and Police Chiefs getting $500,000 a year in a defined-benefit package. California's CALPERs the one many of us Traders would love to know what their buying in advance is under-funded even though their actuaries claim "it's all good!" Social Security Disability will be theoretically broke in 2017-2018 and Social Security will be busted by 2032 according to different models. Ills Pension System is nothing compared to California, our Public Workers in the Prisons make bank! $38-$56 a hour for walking around(I don't envy their environment and believe their deserve a living-wage but making $120k per year in retirement every year when he retires after 25 years is insane! If he works the full 30 years he gets $175k, that's how things work! The high paid public worker in California was a Psychiatrist, he made $840k in 2014 according to public records. Nurse come from the Philippines and get killer jobs there making $160k per year, the State's Pension fund is broken and we are going to see its demise, I am under 50 and thank good old Robert Green CPA I've maxed out my IRA(No deduction benefit there) and 401k hybrid annually since he arranged it. So thinking that public employees can make $500,000 or $200k pension spiking is nuts, just a crazy world? Thanks for adding to this post, the sectors doing the lump-sum offering is from IBM to grocery store workers to chemcial companies, its every place!