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> He left GE with an annual pension of $85,000 and company stock valued at more than $280,000. > Retirement looked pretty good until GE shares collapsed. His s

> He left GE with an annual pension of $85,000 and company stock valued at more than $280,000. > Retirement looked pretty good until GE shares collapsed. His shares are now worth about $110,000, prompting a late-life job hunt. I don't understand; it says he has an $85,000 pension. Isn't that more than enough to retire on? His stocks collapsed to about half their worth (roughly $110,000). This isn't exactly a crazy one off scenario; if you are invested in a single company and do not diversify, it's hard to place the blame on "others" and "complain" about having to find another job after keeping an almost six figure pension at the same time. Is there a chance that GE could forfeit on their pension payout requirements if they lose more capital? Not sure how that works so forgive my ignorance.

logfromblammo 8y ago
The pension is 70% funded, so he can only count on $59500/year actually being there. The likely scenario would be that all pensioners take the same percentage of haircut as the pension obligation is transferred to another company. If he cashed out of GE and went into index funds, the stock portfolio would be conservatively worth another $3300 a year. That's still $62800/year. If he owns his home, that amount can fund his retirement, until his first major medical expense.
- gvb 8y ago
  US pensions are a guaranteed benefit, insured by the US government. If GE defaults on the pension, the US government says they will step in as trustee and will pay him the full $85,000/year. Ref: https://www.pbgc.gov/ https://www.pbgc.gov/
  - sct202 8y ago
    This isn't completely correct. The pension is insured but the maximum monthly benefit depends on a lot of factors. Zabroski is 61 and receives $7k per month, the PBGC won't pay that much unless GE's pension goes bankrupt when he is 67. https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum...
- ztoben 8y ago
  In the article it says he's still paying a mortgage and his wife is disabled. So I would imagine there are quite a few medical expenses on top of that.

logfromblammo 8y ago

The pension is 70% funded, so he can only count on $59500/year actually being there. The likely scenario would be that all pensioners take the same percentage of haircut as the pension obligation is transferred to another company. If he cashed out of GE and went into index funds, the stock portfolio would be conservatively worth another $3300 a year. That's still $62800/year. If he owns his home, that amount can fund his retirement, until his first major medical expense.

gvb 8y ago
US pensions are a guaranteed benefit, insured by the US government. If GE defaults on the pension, the US government says they will step in as trustee and will pay him the full $85,000/year. Ref: https://www.pbgc.gov/ https://www.pbgc.gov/
- sct202 8y ago
  This isn't completely correct. The pension is insured but the maximum monthly benefit depends on a lot of factors. Zabroski is 61 and receives $7k per month, the PBGC won't pay that much unless GE's pension goes bankrupt when he is 67. https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum...
ztoben 8y ago
In the article it says he's still paying a mortgage and his wife is disabled. So I would imagine there are quite a few medical expenses on top of that.