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Ugh... How is it that my future pension of $0 per month is less troubling to US government than pensions of ex-workers of a troubled auto maker? Seriously, pen

Ugh... How is it that my future pension of $0 per month is less troubling to US government than pensions of ex-workers of a troubled auto maker? Seriously, pensions? They expect pensions... What are they, from Mars or something? Who else gets pensions in this country?

chancho 18y ago
Maybe you should organize or something...nah why would you do that with such a fantastic personal healthcare market and rock-solid 401K performance? I kid...partly. But the answer to all your questions is "organized labor."
Dilpil 18y ago
Instead of putting your 401k in stocks and bonds, you should've devoted it to making political contributions. The ROI is far greater, and the volatility much more manageable.
- JimmyL 18y ago
  The real unfortunate thing is that most funds that are offered for 401k use are terrible, expensive, and perform badly.
  - mattmcknight 18y ago
    I don't understand why people don't do IRAs. I can invest in whatever I want. Leave 401k for employer contributions.
    - dantheman 18y ago
      IRA's have limits, and you pay tax now, instead of later. 401ks let you reuduce your taxible income & most employer contributions are some sort of matching.
      - mattmcknight 18y ago
        401ks have the same maximum dollar investment limits, but you can invest in whatever you want in an IRA. You only pay tax now on Roth IRAs, not standard IRAs, which are tax deferred. I don't like matching. I think the company should just throw some amount of money/profit sharing into the retirement plan- which is what every place I've worked at for the last 13 years (including my own company now) does.
        dantheman 18y ago
        I think the limits vary by type... IRA 2009 $5,000 $6,000 401k 2009 $16,500 $22,000 http://www.themoneyalert.com/Retirement-Plan-Limits.ht http://www.themoneyalert.com/Retirement-Plan-Limits.ht
adamc 18y ago
Since it was part of the deal they were working under, I don't fault them for wanting them. To answer your question: Plenty of state and federal workers get pensions, as do public school teachers and other public servants. If they stopped offering them, the jobs would be that much less attractive. It's part of the compensation scheme.
JimmyL 18y ago
Not many people - most get 401ks, which are a poor substitute (and incidentally, not originally intended to be used for retirement savings). As for why they get pensions and you don't, it's mostly due to them being organized and having been around for a while. One of the biggest things that unions, when doing collective bargaining, argue for is that all members be treated the same way, as opposed to workers being treated differently depending on how long they've been there. This isn't to say that unions don't like seniority - they love it - but that after X years of work Joe will have the same benefits that Jack, who's currently worked X years, has now. This is one of their main things they offer to their members: look at what we got Jack, in X years you'll have it too. As a result, every time they redo their contracts, all the new guys get pensions not because people in other jobs get them, but because the other guys in the bargaining unit have it. As for why they got them in the first place, that's what being part of a large union in a blue-collar field does for you. Why does the government care? Because most large unions have well-oiled political machines attached to them. Union members have a disproportionately high voting percentage, and are very loyal to what their union recommends. They can get 500 people to do anything political (run a phone bank, show up at a rally, write letters, etc.) very easily and efficiently, which comes in very handy if you're running for something. From their point of view, the bottom line is that they worked for years with an understanding that part of their compensation would come in the form of pensions, and now (through no fault of their own) the company is dying and can't afford it, because they managed their money poorly. From the government's point of view, it's about a bunch of people that are very politically active and soon to become a lot poorer and on social security.
- eds 18y ago
  and now (through no fault of their own) the company is dying and can't afford it, because they managed their money poorly For example, by giving their workers pensions and other compensation far exceeding their market value.
  - olefoo 18y ago
    You do not understand a very basic fact about pensions; namely that they are an obligation that the company has. Your statement makes as much sense as saying that the company is in financial trouble because they have paid loans back in years past. For the company to default on the pensions that they owe is just as bad if not worse as if they were to default on their line of credit with a bank.
timr 18y ago
Personal retirement planning is a recent phenomenon -- 401(k) plans didn't even exist until 1978, and they're not really intended to be a replacement for pensions! Most of the auto workers who are expecting pensions signed up for a different deal than you did. These guys didn't have their whole lives to put money into a retirement account -- they were told that their employers would cover their retirement, and they planned accordingly. To have that safety net pulled now is a disaster for a lot of people, and I don't blame them for complaining.

chancho 18y ago

Maybe you should organize or something...nah why would you do that with such a fantastic personal healthcare market and rock-solid 401K performance? I kid...partly. But the answer to all your questions is "organized labor."

Dilpil 18y ago

Instead of putting your 401k in stocks and bonds, you should've devoted it to making political contributions. The ROI is far greater, and the volatility much more manageable.

JimmyL 18y ago
The real unfortunate thing is that most funds that are offered for 401k use are terrible, expensive, and perform badly.
- mattmcknight 18y ago
  I don't understand why people don't do IRAs. I can invest in whatever I want. Leave 401k for employer contributions.
  - dantheman 18y ago
    IRA's have limits, and you pay tax now, instead of later. 401ks let you reuduce your taxible income & most employer contributions are some sort of matching.
    - mattmcknight 18y ago
      401ks have the same maximum dollar investment limits, but you can invest in whatever you want in an IRA. You only pay tax now on Roth IRAs, not standard IRAs, which are tax deferred. I don't like matching. I think the company should just throw some amount of money/profit sharing into the retirement plan- which is what every place I've worked at for the last 13 years (including my own company now) does.
      - dantheman 18y ago
        I think the limits vary by type... IRA 2009 $5,000 $6,000 401k 2009 $16,500 $22,000 http://www.themoneyalert.com/Retirement-Plan-Limits.ht http://www.themoneyalert.com/Retirement-Plan-Limits.ht

adamc 18y ago

Since it was part of the deal they were working under, I don't fault them for wanting them. To answer your question: Plenty of state and federal workers get pensions, as do public school teachers and other public servants. If they stopped offering them, the jobs would be that much less attractive. It's part of the compensation scheme.

JimmyL 18y ago

Not many people - most get 401ks, which are a poor substitute (and incidentally, not originally intended to be used for retirement savings). As for why they get pensions and you don't, it's mostly due to them being organized and having been around for a while. One of the biggest things that unions, when doing collective bargaining, argue for is that all members be treated the same way, as opposed to workers being treated differently depending on how long they've been there. This isn't to say that unions don't like seniority - they love it - but that after X years of work Joe will have the same benefits that Jack, who's currently worked X years, has now. This is one of their main things they offer to their members: look at what we got Jack, in X years you'll have it too. As a result, every time they redo their contracts, all the new guys get pensions not because people in other jobs get them, but because the other guys in the bargaining unit have it. As for why they got them in the first place, that's what being part of a large union in a blue-collar field does for you. Why does the government care? Because most large unions have well-oiled political machines attached to them. Union members have a disproportionately high voting percentage, and are very loyal to what their union recommends. They can get 500 people to do anything political (run a phone bank, show up at a rally, write letters, etc.) very easily and efficiently, which comes in very handy if you're running for something. From their point of view, the bottom line is that they worked for years with an understanding that part of their compensation would come in the form of pensions, and now (through no fault of their own) the company is dying and can't afford it, because they managed their money poorly. From the government's point of view, it's about a bunch of people that are very politically active and soon to become a lot poorer and on social security.

eds 18y ago
and now (through no fault of their own) the company is dying and can't afford it, because they managed their money poorly For example, by giving their workers pensions and other compensation far exceeding their market value.
- olefoo 18y ago
  You do not understand a very basic fact about pensions; namely that they are an obligation that the company has. Your statement makes as much sense as saying that the company is in financial trouble because they have paid loans back in years past. For the company to default on the pensions that they owe is just as bad if not worse as if they were to default on their line of credit with a bank.

timr 18y ago

Personal retirement planning is a recent phenomenon -- 401(k) plans didn't even exist until 1978, and they're not really intended to be a replacement for pensions! Most of the auto workers who are expecting pensions signed up for a different deal than you did. These guys didn't have their whole lives to put money into a retirement account -- they were told that their employers would cover their retirement, and they planned accordingly. To have that safety net pulled now is a disaster for a lot of people, and I don't blame them for complaining.