5 ms·

Could not agree more. My grandfather retired 5 years early because if he didn’t, he would lose his pension due to a GE merger. Just lose the whole pension — ver

Could not agree more. My grandfather retired 5 years early because if he didn’t, he would lose his pension due to a GE merger. Just lose the whole pension — versus a 401k where his accrued benefits would now be under his own control. Arguably, his pension terms were probably better, but pensions seem like pretty thin ice with no control or flexibility to my perspective. I’m not super well informed on what his options were; I’m sure he had different retirement benefits via staying with GE post-merger, but if anyone is interested I could get more details. EDIT: Based on memory and what kind of work he did, I’m almost certain it was this item in the “General Electric timeline” Wikipedia page: “GE Aerospace Division sold to Martin Marietta, now Lockheed Martin”

listenallyall 4y ago
Keep in mind that a 401k is almost all funded with your own money. The amount going into the 401k is deducted from your paycheck... you can see it in one of the boxes. A pension, on the other hand, was funded by the company. And that is the exact reason there are so few defined-benefit pensions today in the private sector. These things were so incredibly generous that they are potentially bankrupting the original company... GE is certainly in that boat. Of course companies would prefer employees to fund their own retirement, perhaps sprinkle in a limited employer match subject to 5-year vesting, than to fund the whole thing themselves!
- hellisothers 4y ago
  While this is true, the company could just pay you $18,500 less and put that in your pension. Benefits are fungible.
  - listenallyall 4y ago
    That's not how a defined BENEFIT pension, like what GE offered for decades, works. The "defined" promise is related to what the employee receives, not what is contributed.

5 ms·

Could not agree more. My grandfather retired 5 years early because if he didn’t, he would lose his pension due to a GE merger. Just lose the whole pension — ver

by samtheprogram 4y ago

listenallyall 4y ago
Keep in mind that a 401k is almost all funded with your own money. The amount going into the 401k is deducted from your paycheck... you can see it in one of the boxes. A pension, on the other hand, was funded by the company. And that is the exact reason there are so few defined-benefit pensions today in the private sector. These things were so incredibly generous that they are potentially bankrupting the original company... GE is certainly in that boat. Of course companies would prefer employees to fund their own retirement, perhaps sprinkle in a limited employer match subject to 5-year vesting, than to fund the whole thing themselves!
- hellisothers 4y ago
  While this is true, the company could just pay you $18,500 less and put that in your pension. Benefits are fungible.
  - listenallyall 4y ago
    That's not how a defined BENEFIT pension, like what GE offered for decades, works. The "defined" promise is related to what the employee receives, not what is contributed.