Posted on 07/01/2009 6:12:21 AM PDT by reaganaut1
General Motors is using its huge pension fund in a way it never intended.
It had planned — and put money aside — for a steady march of retirees over time. But instead, tens of thousands of blue-collar workers, most in their 40s and 50s, are all becoming eligible for retirement benefits now, as the company rapidly downsizes.
And even as its pension fund faces this giant bulge in payouts, G.M. is not putting any new money in — the company is not required to make any contributions to the fund until 2013.
The longer this goes on, the weaker the fund will be and the more uncertain its long-term viability.
For now, the pension payments to its younger “retirees,” part of a deal G.M. negotiated with the United Automobile Workers union in 2007, allow the company to drastically shrink its work force without having to come up with the cash to pay severance. The payments also relieve some of the burden on social service programs in the countless factory towns and counties around the country with large numbers of G.M.’s newly jobless.
“G.M. basically raided the pension plan, by having a lot of these severance benefits paid through it,” said Douglas J. Elliott, a fellow with the Brookings Institution who specializes in financial institutions and policy.
What G.M. has done is perfectly legal. Nor is this the first time an employer has used a pension fund to pay for pruning its ranks. Well-subsidized early retirements are a time-honored practice in the public sector, where teachers often retire after 30 years and police officers can sometimes claim rich pensions after working as few as 20 years.
(Excerpt) Read more at nytimes.com ...
What were these idiots doing in the intervening twenty years????
If it seems to good to be true, it probably is. Where is the UAW now?
I smell another bailout coming.....
I’m sure that there is stimulus money in Washington, they’ll keep giving it out, there is no end to their VAST supply. Never fear, Obama is here...my poor child. We have nothing to fear but fear itself. These are just WORDS>
Where is the UAW now?
+++++++++++++++++++++++++++++++++++++++++++++
Pleasuring the driver at the WH.
Don’t worry, the government will bail them all out.
The government will bail out everyone except for the taxpayer.
I say give Bernie Madoff a chance to redeem himself by running the GM pension fund. He’ll be much more creative than obama’s czars trying to keep a ponzi afloat with taxpayer money
Any idiot could figure that out.
I don’t know. 74 years of age is a little to old for Obama to allow them to live. After the pension dries out, they will just have to go in a corner a die, and get out of the way, quit being a drain on society.
“And even as its pension fund faces this giant bulge in payouts, G.M. is not putting any new money in — the company is not required to make any contributions to the fund until 2013.”
So what? We have a government who is doling out money for Social Security by borrowing it.
Let the union sympathizers get in the same shape the rest of the country is: suck it up!
Union workers screwing each other rather than a company or the taxpayers? Cry me a river... /s
....no where in the article do they mention Obama’s meddling in GM’s affairs....that’s the NY Times for you.
“The pensions were high enough to encourage most of them just to take it easy.”
I agree. I’ve read about some complaining that they are having a tougher time making ends meet on the second home upstate they own.
Reminder: These are blue collar workers just assembling parts. Not to disparage them, but why should what they vault them into the upper tier of workers?
Wow. People expect to be paid for not working for 30 years or more. Is there no end to the increasing numbers of looters in society? When did retirement grow into something that people expect to spend half of their adult years receiving? How can any society afford it?
Answer: It can’t.
My Dad retired from his first job at 62 and worked his second job for another 4 years.
My father in law worked in constructive until he was 60.
I have a hard time drumming up sympathy for a 54 year old retiree.
The ‘70’s should have been the writing on the wall for the “big 3” auto workers and their offspring. If they don’t get bailed out, which unfortunately I think they will, then they should start looking for real work. I don’t care what happens to them.
Ah, unions, liberals, and politicians. All math illiterate.
All greedy.
And none capable of creating anything.
What a country!
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