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No the taxpayer isn't getting hosed in your case. However, I don't think UAW retirees collect what you do either. According to your calculations, if you retired making $80K (including OT) avg in your last 3 yrs, with 35 yrs svc., you would collect 78% of $80K, or $62,400, plus 3% of the $62,400 every year. That's a lot of coin even though there is no SS coming your way (on the police earnings).
Even though the 3% isn't compounded, in 11 years you would be back up to your $80K.
I find it hard to believe that any UAW "fatcat" would get 80 grand (including SS) after 11 years if retirement.
GM
http://www.uaw.org/contracts/07/gm/gm06.php
Chrysler
http://www.uaw.org/contracts/07/chrysler/sal/chry_sal07.php
So, for example an employee with 25 years of credited service:
25 years * 12 months = 300 * $53 = $15,900 per month *12 = $190,800
Surely this is wrong... so someone from the UAW please tell us how a UAW pension IS calculated
The Washington, D.C.-based Pension Benefit Guaranty Corp. insures private-sector pension plans and pays benefits to workers if the plan fails because the company folds or files for bankruptcy.
In 2007, the agency rewarded more than 80 percent of retirees full pensions.
The maximum insurance benefit for participants in underfunded pension plans terminating in 2009 is $54,000 per year for those who retire at age 65. Early retirees bring home less.
http://www.mlive.com/news/saginaw/index.ssf/2008/11/midmichigan_uaw_retirees_fea- r.html
25 years * 12 months = 300 * $53 = $15,900 per month *12 = $190,800
Surely this is wrong... so someone from the UAW please tell us how a UAW pension IS calculated"
More than likely it is $53 per mo. per YEAR of net credited service. So, it would go like this:
35 years svc. * $53=$1855 per month* 12 mo=$22,260. Then add SS and any other bennies.
What I do know is PBGC will only pay a maximum $54,000 for those that retired at age 65. That would be in the event that the Pension trust becomes under funded and the company can no longer kick in the amount needed to get it back up to the required amount. I would think that the GM Pension trust may go into default if the Feds do not add the needed amount. As of the end of 2007 the GM Pension plan was in good shape. Anyone know where it sits today?
June 2 (Bloomberg) -- Did pension debts ruin General Motors?
With each new labor contract, GM management found it easier to grant sweeter future benefits than to raise current wages. Over time, benefits went up much more quickly. That left GM with a daunting unfunded health-care obligation. As retirees lived longer -- one died in 2006 at age 111 -- and the cost of providing health care mushroomed, the expense grew beyond anything imagined in 1949.
GM stayed current on pensions, but the money it funneled into retirement plans left less for engineering and restyling. And shareholder dividends? Forget ‘em. Over a 15-year stretch, GM plowed $55 billion into pensions and only $13 billion into dividends. That’s why I said the shareholders had been disenfranchised.
Eventually, when the competitive landscape turned, GM fell behind on pensions too. By 2002, GM’s pension fund was $20 billion under-funded. It borrowed to make the pension fund whole, but that merely transferred the problem to the balance sheet.
GM tried to unload some of its retiree obligations by spinning off its auto-parts business, Delphi Corp. But Delphi preceded it into bankruptcy, and GM’s continuing obligation to the Delphi workers was another factor leading to its demise.
The Pension Benefit Guaranty Corp., the federal agency that may have to bail out GM workers, is now $33.5 billion in the red. Many more private pension failures loom.
http://www.bloomberg.com/apps/news?pid=20601039&sid=aFJd7ViPkXQg
According to the filing, GM's combined U.S. pension assets plunged to $84.2 billion as of Dec. 31, from $104.1 billion at the end of 2007. As a result, funding levels for the two plans dropped to 87%, down from 124% a year earlier.
GM's hourly plan's funding level fell to 83% as of Dec. 31, from 120% a year earlier. Its assets fell 20.4% in 2008 to $55.5 billion.
GM's salaried plan's funding level fell to 95% from 132%, and its assets fell 16.1% to $28.7 billion in the same period.
http://www.pionline.com/article/20090223/PRINTSUB/302239949
They are in better shape than many pension funds of major corporations. It is not just the UAW retirees that may be impacted.
Even the richest sports league in the world can't meet its pension obligations.
NFL owners in March voted to allow teams to opt out of the league-run pension plan for coaches and other non-playing employees. Already nine of the NFL's 32 clubs have opted out of the program — including the Dallas Cowboys and the San Francisco 49ers — and three more teams are considering following suit, said Larry Keenan, executive director of the NFL Coaches Association.
The move has angered coaches, and led to worries some NFL coaches and employees might leave the league. Last month, two veteran Indianapolis Colts coaches, offensive coordinator Tom Moore and offensive line coach Howard Mudd, retired because of the pension changes
Inflated profits lead inevitably to higher taxes. It would make just as much sense for a company to make the required payments, which are a deductible business expense, & thus reduce reportable income.
But what companies (the profitable ones, in any case) have been doing since the 1980s is to eliminate their pension plans altogether. This is perfectly legal, as long as the companies live up to their contractual obligations to all vested employees. For example, my employer, a Fortune 500 corporation, eliminated its pension plan in 1985. It used the funds in the plan to purchase annuity contracts for all vested employees. All new hires, as well as employees who weren't vested, were offered a 401(k) plan & a defined contribution retirement plan funded by the company.
You're most likely to see this when stock prices are high. If the value of a pension plan's holdings exceeds what the company needs to satisfy its obligations, that company has a powerful incentive to shut down the plan & keep the surplus. For example, if a pension plan holds stock worth $500 million but the company needs only $400 million to satisfy the plan's obligations, it makes sense to terminate the plan, spend that $400 million on annuity contracts & book the remaining surplus as a profit. Many companies did that during the bull markets of the 1980s & 1990s, which explains why so few companies still offer old-fashioned pensions today.
It's also worth noting that none of the newer corporations, like Apple, Microsoft or Intel, offer traditional pension plans. I wonder how many, if any, companies have started defined benefit pension plans since 1965.
In the old days, you would often rise up the ladder as you stayed in a company...it does not seem like that is true, to some extent...if companies looking to fill positions look outside the company, then it seems likely that people will rise to their highest limit in Company 1, then market their skills for a riase in Company 2...
The old system of loyalty does not seem to exist like it used to...both ways, employee to employer and employer to employee...since fols can be laid off in a moments motice, why should they stay loyal to a company that may dump them any minute???...how many articles have you read in Time, Newsweek, US News where the writer claims that the averge person will work for 5-8 employers in their working career???...If someone gets $30K now, and a competitor offers $42,500, why not jump ship???...we see pensions failing, so why stay with one company forever???...take your 401K and go anywhere you want...
It would seem that only the unmotivated would now stay in a company for 40-plus years...right up the alley of the average UAW worker, who has no marketable skills and, rest assured, there are NOT any employers lining up to hire any displaced UAW worker...even Roger Penske wanted ALL of Saturn except what???...the manufacturing facilities...why???...because he knows who works at the plant, and he is running from the UAW at the speed of light, because he knows what we know...they aren't worth a plugged nickel when it comes to work ethic and work performance...
For most politicians, I'll bet thats true, but for run of the mill grunt government retirees, theres no golden benefits. I shouldnt have spouted off about the UAW, since I dont know the facts.
SS penalizes those who worked two jobs because they must be double-dipping in the retirements. How SS misses most abuse of the systems but it made legislators feel better two decades ago to cut back SS payouts if someone had another retirement--cut, not eliminated if I understand correctly.
But UAW people collect both and I assume they are not penalized by having a high payout from UAW in retirement when it's added to the SS along with the full healthcare and everything care they used to enjoy.
2014 Malibu 2LT, 2015 Cruze 2LT,
And the school system is supported by property taxes and is partially why a $400k house in Illinois can have $10k/yr in property taxes depending on the area. My house probably lost $50k in value last year, yet my property tax assessment still went up almost $1k/yr. Sales taxes went up 1% and now the state wants to increase income tax from 3% to 5%. It's getting a bit excessive IMO.
Actually I believe the GM Pension fund does take back some of the retirement when a retiree takes SS. The reason being, that GM paid half of the SS premium during the employment. It is a negotiated part of the retirement. The real problem was and is, that GM agreed to an open ended health care plan for the life of the retiree and spouse. When they signed the contract it may have cost GM $200 per month for the gold plated health care plan. Now it is probably more like $800 per month or even more. Our Teamster plan was barely copper plated and costing our company $1200 per month. Even at $1200 per month our plan is in financial difficulty because the cost of services are escalating.
It's something like that here in Maryland also. The problem with it, from a funding standpoint, is that it's based on the average of your highest 3 years salary. As you said, up to 80% of that highest average, which a pretty darn good deal no matter how you slice it. Way over what most workers in private industry can expect.
Federal workers in the old system had it just as good. I'll repeat my story again about our friend who retired from the feds after 40 years. After a couple of years of COLA's, he's bringing home more now in retirement than he made while he was working. Courtesy of the US taxpayers.
No doubt increasing healthcare costs are creating real problems. My wife's employer just changed the formula for healthcare in retirement and she missed by being two years to young. Oh well, at least we have another 25+ years to plan for it.
The way they transitioned to the cash balance plan really hit older workers hard. In my case, at 65 I will be bringing home around $400/month less under the new plan than I would have under the old defined benefit plan. This is because there's an accrued interest that's part of the cash balance plan, and, for older workers (those over, say, age 55), there's just not enough time for the compounding effects of the interest to offset the loss from the defined benefit plan, had it continued.
My Mom is in the federal gov't, and hit her 40 year mark last year. She had planned on retiring at the end of 2008, but they made it worth her while to stay on another year. She won't get social security, because she didn't pay into it as a gov't worker, and didn't get enough quarters in prior to going into the gov't.
I forget now what she said she'd get in retirement. Something like 80% of her best 5 year average? Anyway, it's pretty sweet, IMO. However, she did pay into that retirement plan for 40 years, so I guess she's entitled to something.
My grandmother's cousin was a GS13 in the gov't, and retired in 1980. I think her retirement is only around 30K or so per year. A GS13 starts at around $87K nowadays in the DC area, so somehow my grandmother's cousin fell through the cracks when it came to COLA adjustments!
We used to have a lady working in our office who retired from the gov't when she turned 62, and then went back to work as a contractor. She had been a GS12, and was getting something like $60K in retirement. Something's not adding up here though. Maybe she had more years of service in than my grandmother's cousin?
I have a friend who's a school teacher. I'll have to ask him what their retirement plan is. I know he pays into a retirement plan, but I think he also pays into social security.
Those are all very good plans, even considering some of them required employee contributions. Tthey are all much better than most plans from private industry. And, I have yet to hear of a govt retiree having his pension reduced because the government failed to set aside enough money for it.
I will have over 45 years in with my company if I stay 'til I'm 65. Our retirement plan required a contribution in the early years, but it was dropped along with reducing the benefits some time ago. When I retire, I will get something like 25% of my final average 3-year salary. After 45 years. That's the reality of pensions in the private sector nowadays.
Ouch! that's pretty painful, but I guess nowadays, any pension at all is a blessing. And 25% is a lot better than that $349.21 per month I get to see in another 26 years. I hope you're saving in other ways, such as 401k, IRA, etc.
Sadly, that lady I mentioned who retired from the gov't and worked with us, was always whining about money problems, despite that ~$60K pension, plus working 3 days per week at around $25 per hour. Yet she always found the money to go on these 3 week cruises here and there. :P
She liked to whine at me for being cheap, but then would get defensive when I'd shoot back that at least I'm not still working in my 60's because I can't figure out how to budget on $60K per year. Yeah, she didn't like that too much. :shades:
I know some are shaking their heads now at my greed, but didn't Uncle Sam rip it on us, give me back my SS overpayments and I'll shut up.
The only reason I brought it up is to contrast private sector pension benefits with those in the public sector, and why it's hard to sympathize with those retiring from various government entities who complain that they're only getting 70 or 80 percent of their final salary.
Now, she's trying to get my son on board at the base as well, doing clerical work. He'd start as a GS-4, which in CA means he would get $14+ per hour. He still wants to attend school in the evenings, though his chosen field (early childhood education) wouldn't pay nearly as well as the government job, nor come with the same level of benefits.
I always thought that was a bit of a shaft, how they penalize your social security if you work too much in "retirement". I mean, if you paid in all those years, I think you should be entitled to your full benefit. I mean, you get taxed on SS payments anyway, don't you? Plus, when you took that Fortune 500 job, I presume you were paying into SS yet again.
My grandmother retired from the federal gov't in 1980, same year as her cousin. She really didn't want to retire, as she was only 56 and liked to work, but the hospital she was working at got shuttered (and still sits abandoned to this day. It's a bit of a local landmark and the stuff of urban legend these days. Glenn Dale Hospital, if anyone wants to google it). She went back to work part time/on-call throughout the years, and had enough quarters in overall to get social security. I do remember though, that she always had to watch how much she made, so that it didn't penalize her.
That lady that worked with us for a few years (she's still around too, I saw her in the K-mart across the street on her lunch break the other day), was always griping about social security, as well. I forget the details, but she was constantly fuming about some $562 per month that she thought she was owed, for her time in the private sector. However, there was some kind of "windfall" ruling or something like that in the early 80's that she said screwed her over.
Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.
Now that's a return on your SS contributions :shades:
Wouldn't inflated profits lead to inflated stock prices, which many pension plans have their own company stock invested in them, thereby "paying" for the yearly obligation with the "inflated stock price"?
I agree with that. I'm sick and tired of hearing "I don't get that, why should you?". They don't realize that jobs like fire and police can be back breaking, lethal jobs that have a short (20-30 years) career. While most other gov't (state and municipal) employees aren't much more than clerks making $30-40K/yr.
I don't know. I suppose that it might be possible, although I don't think that it's likely, given current market conditions. We won't see "inflated stock prices" anytime soon.
Still, I'm not sure why this matters to you. Most of us in the private sector aren't covered by traditional defined benefit retirement plans, which will probably disappear entirely within a generation. That was the point that I tried to make in my earlier post. None of the "new economy" corporations (Apple, Oracle, Microsoft, etc.) offer them. In the future, successful startups will offer only defined contribution plans.
I hear you. My dad was a career firefighter in California. He spent about 20 years on the line, then had to switch jobs (he became a fire cause investigator, like Robert DiNiro's character in "Backdraft") for the last 13 years due to the accumulated crap in his lungs. The city still covers 100% of his health care for respiratory issues.
I remember that he used to do some work on the side teaching CPR and First Aid to the workers on the oil platforms off the coast of CA --- what was interesting was that he was paid a mind-boggling $20/hour to do this! I thought that was all the money in the world at the time.
It can't be true...is this what the British Navy went through when they had conquered all of the world at the time...complete, utter...boredom? You aren't one to give up the battle that easy, are you?
Come on back and tantalize us with some more pro-UAW blather, rock. :shades:
2021 Kia Soul LX 6-speed stick
Then, again, iluv, maybe gagrice and I have convinced him about the truth of the UAW, and he has nothing else to say...
Or, Beth hasn't been selling any cars, now SHE'S depressed, he's divorced, and she needs someone to comfort her in her misery...in other words, MAYBE ROCKY IS TOO BUSY FOR THE LIKES OF US IF HE HAS HER...
That would be a good thing for him. Of course we miss him.
I see the crazy UAW guys at Bell are still being stupid. Not much sympathy from locals in the DFW news paper blogs. Justice would be 2500 deserving people getting a good new job and 2500 UAW workers left out with their signs and ignorance.
GM is finally on ch-11, wow... big "surprise"...
Quoting Will Smith: Somehow "I told you so" just doesn't quite say it anymore. :P :P :P :P
Of course, as gagrice says, he is part of our Edmunds "family" by now, and for those newbies out there on Edmunds, you'll know when you're part of the Edmunds "family." I don't want anything bad to occur to that boy, he's fae-ma-ly. Some women(and even some men)seem to give it a faaa-mmee-muuull--llyyy twang to it, if you happen to catch my drift!
I spose 1,000 posts or more is a good starting point to try and guage that by.
2021 Kia Soul LX 6-speed stick
Remember that Roadburner was replying to Lemko's assertion that every German car is hours away from a breakdown that will bankrupt its owner.
Exactly.
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive
Anyway - Am I the one who's outraged that GM emerged from BK with the UAW holding a contract that maintains the same wages/benefits for all existing employees?
What a joke! Concessions were for retirees/new hires only! This time next year GM will need another $50 billion to survive though we the sheeple may not hear about it. It's a recipe for failure and incredible beyond belief.
TARP will have to fund GM for the next 2-3 years at a minimum.
Have any of the UAW shops re-opened since the big shut down? The only gotta have GM is the Camaro and it is built in Canada, by the much more pragmatic CAW Union.
I truly wonder if what Obama did for the UAW, will backfire at some point...he has obviously extended the Jobs Bank to include the entire remaining UAW, since I wonder who, if anybody is making cars right now...and, if someone is, who is buying them???...who is lending money to buy them???
And, will anybody feel comfortable buying from companies that are bankrupt, regardless of whether the gov't stands behind a GM warranty or not???
A simple history lesson...the UAW caused quality to drop like a rock for over 2 decades...that loss of quality caused buyers to desert the Big 3 in droves...that spiraled into the bankruptcy of GM and C, and probably soon Ford...that causes more buyers to shift to the "imports"...that drives the Big 3 (for lack of a better name) even smaller...and so on, and so on...
Proper history will record that the UAW killed the American auto industry...revisionist, politically correct history will record that buyers, for no reason, deserted the Big 3 for the imports, and no one, to this day, knows why...
I would say the smart UAW people are getting some training for another unrelated field. The auto industry as we know it will never return. The peak sales for automobiles is past. Ford wisely moved their big sellers to Mexico. Much less chance of them shutting down a factory building a hot seller like the UAW did last year to GM. Does GM have any hot sellers built by UAW. If so they need to move the factory before it is too late.
I'm flying Delta in a couple of months. They've been out of banko for, oh, two years now? They absorbed some union employees when they took over Northwest.
I truly wonder if what Obama did for the UAW, will backfire at some point...
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It's highly likely. Obama has a vested interest in their success through 2012. After that it's curtains.
".....Everyone is touting the G8/Caprice. How is it any better for the UAW than a Chinese Buick? Neither one creates a job in the USA."
IIRC, the G8/Caprice was supposed to eventually shift production here. This was before the disaster that was $4/gal gas. As of now, it sounds as if this vehicle is a niche product. I assume it's transformation to a Chevy is to "fill a void" left by the G8's departure, and to throw a bone to Holden.
As far as the "Chinese Buick", initially, there was talk of importing 150,000 cars from China a year ( b4 the BK started). The UAW howled, and that put an end to that. Now, rumor has it that a "baby Buick" will be built along side the Cruze in Ohio and be exported to China;
http://www.autoblog.com/2009/06/22/spy-shots-buick-getting-its-own-cruze-variant- /
The Fairfax, Kansas plant has been reopened for the 2010 Lacrosse and Malibu
With the automakers, we are, literally, talking about buying the product itself, not just driving it to the next city, and we are buying something where we have a certain amount of ability to measure its quality...whether we are right or wrong, we will decide if the SUV door fits, or the dash is ergonomic, or if we hear rattles or not...and we will avoid the lower quality product...
We are quite ignorant of the quality of the airplane, and we are even told that wings that flap and creak are designed like that to be flexible for flight, whereas a dashboard that flaps and creaks at 60 mph is a junk car...
So, the analogy of Delta vs GM is meaningless, as you really are comparing apples to oranges...we will fly a bankrupt airline if there is an available seat, but we may not buy a car from a bankrupt carmaker, because we will own the car, but not the airplane...