Posted on 02/22/2006 5:38:50 AM PST by Oilfield
I am new at this so don't fry me too badly. I have lurked for 6 years and decided to join today. I don't know if all are aware but the congress and senate has passed a pension plan reform bill. They are presently starting to discuss the differences to provide a final bill. Summaries of the bill can be found at www.gpoaccess.gov/fr/index/html. Look for sepproposal or sepproposal2 to find the details of the new reform bill. It is expected to be completed sometime in March. The reform will allow for business to underfund their respective pension plans and thus eliminate any lump sum alternatives that are allowed by law. Business will then be able to use any underfunded monies for other use.
I am 50 with 7 and 8 year old boys. If I am forced to take a monthly stipend for retirement my wife and boys will have a reduced retirement stipend should I die before they are out of college. In addition, any excess money that would have been left over as would be in a lump sum payment will not go to my wife or boys.
I am writing my senator and congressman regarding this bill. I do hope that others do as well.
read later
That's a wee bit hard to believe.
Didn't congress pass laws several years ago in an attempt to force companies to more fully fund their pensions? I seem to remember scandals regarding underfunded pensions from the 80's. Will this bill undo those changes?
I can't seem to find it. Could you give us a better link, or post some of the bill?
Welcome to Free Republic : )
The company I work for is being taken over by Duke Energy. They are notorious for doing away with pensions and giving the lump sums (I can't remember what it is called). They have recently been sued for this also. I guess that lawsuit will be moot after and if this passes.
Welcome to FreeRepublic, also.
Get over it. Corporations should be able to do what they want. We work for them at our own free will. I have a pension at my current employer, but not at a previous. They had excellent 401K matching. I also elected to participate in the 401K at my current employer.
If firms stop offering these benefits or cut them back sharply they risk losing employees to competitors with better combinations of salary, bonus, benefits etc.
I agree with you in principle, however I also believe that any cuts in pensions--especially those anticipated by say, those 50 and older--should be grandfathered. That way, newer and younger employees can opt for IRAs or 401(k)s, and the older employees (who have less time to save), can still receive pensions.
Please clarify: Your point is that your company ought to design their pension plan to accommodate the fact that you decided to make babies late in life?
Do you mean to say that that your entire college funding "plan", such as it may be, is based on taking a lump sum pension payout?
Reality check: it's time to pay the piper.
Here are some better ideas: plan to work until you are 65 and/or until they are out of college. During that time, max out your IRA and 401K contributions. Make sure your kids understand that they will be assuming some responsibility for their education and will be taking out student loans. Reinforce the notion that academic excellence is rewarded with scholarships and grants.
Sorry. Am new at this and learning how to reply. Try going to www.gpoaccess.gov/fr. You will find an entry box under 2006 book. Type in sepproposal and then hit enter. Two hits will appear and then can be opened and read. I work with a guy that has an MBA and the way he reads the new reform bill it will allow the employers to eliminate the lump sum option. I also have a large 401k. When combined with a lump sume it yields a very good amount for retirement.
Yes, I have lurked for 6 years. I have just been more active with my church and local issues.
You, and many older workers, are going to get royally screwed by your employers, with a nice reach around from Congress. The best advice I can give is to remember this at the next election.
A big drop in stock priceses will mean that large companies such as IBM, GM, and DuPont may have to take more from earnings to shore up their pensions. A drop in earnings will further erode their stock price which means their pension will appear to be further underfunded, which will mean taking more from earnings, etc.
You can't directly control what Congress does on this issue.
However, you CAN control the reduced stipend issue yourself.
Life insurance was created to help solve the problem you've outlined. For less than $100 per month you probably can buy $500,000 of life insurance to leave to your wife and kids in the event of your premature death.
That was an interesting change wasn't it?
For decades Congress PREVENTED companies from fully funding their pension plans.
The insurance industry built a whole arm dedicated to helping companies curcumvent those destructive regulations.
Enormous commissions were (rightfully) earned by those who could craft plans that benefited workers without bringing down the absolute and devistating wrath of Federal prosecutors.
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