Sorry, I was referring to medical benefits for active working employees. That's where I see it going. Granted this thread is about retirees.Quote:
...US corporation that still offers retiree medical benefits...
And therein lies the problem. Rulings like this that have become a matter of the public record just take it one step closer to terminate benefits for everyone. The legal precedent I am concerned about is such decisions make it harder for the working employee to find recourse when the benefits are cut. So, your company declares bankruptcy, cuts the benefits, and then magically emerges from bankruptcy. The courts said it was OK to cut for retirees, next the courts say it's OK for active employees. Soon after that it becomes the "new normal" to not offer medical coverage at all because the courts said they didn't have to. Employers know the economy stinks and you just can't change jobs on a whim - so to an extent they have you by the b#$$s. Not that they didn't anyway, but such decisions just give them a little tighter grip.Quote:
...would have been a routine communication to those affected -- benefits gone.
And, no Sal, I didn't read the whole thread or your post #37, but I did just now. I don't feel that the employer/employee relationship is necessarily adversarial and that unions are the answer, although at times they serve their purpose. As benfits provided decline, union importance/usefulness will, of course, rise. I see the relationship with my employer as more cooperative. I take care of them, they take care of me, and that starts with the old hip pocket. But medical benefits run a real close second.
Since I am OT, I've said my piece. Kodak was a good place to work. It is a shame to see them come to this.
That's why unions exist (whether you admire them or not). Here is Calif, Brad, there's a dramatic difference in standard of living and of overall community finances right at the union/nonunion divide, which is largely the geographical divide between the Bay Area and Central Valley. Here the economy is relatively strong for a number of reasons including a better sustained payscale, while over the hill it still looks like the Great Depression in places. Glad you are able to work in a field where you can choose to live where you want; but many cannot. But things are getting ugly everywhere in terms of
trying to pluck the last feathers off the middle class. I'd classify just plain ole greed as the number one factor. But when the the parasite gets as big as its host, they both die. That's what happened
with all the sub-prime mortgage scams and big sprawl developers behind them. In the long run, tapeworms aren't all that smart!
And there is no shortage of them. Greed often equals stupidity. And stupidity is the only truly renewable resource.Quote:
...are the cockroaches.
In post #37 I explained how US pensions work so those outside the country would understand the distinction between medical coverage and pensions. From employees' points of view, Pension Benefit Guarantee Corporation (PBGC) coverage provides quite good security of their vested monthly pension payments against company bankruptcies (up to certain dollar limits affecting highly compensated retirees). This protects against plan insolvency resulting from underfunding.
A new threat to pension security is now manifesting. Corporations able to get their pension plans up to 100% funded are permitted to perform a "standard termination." In this process, several options may be offered to those with vested benefits in the plan, among them cash buyouts, individual annuities or a master annuity for all participants. One corporation that recently took this route is General Motors (GM):
The PBGC must approve standard terminations, but has no incentive not to. When a retiree's company enters bankruptcy, beneficiaries of the qualified retirement plan can count on the PBGC to continue their monthly payment. After a standard termination such as GM's, those who are retired, depending on which choice they make now, will either be in full possession of investment yield risk, managing the lump sum payment they get on their own, or at the mercy of an insurance company's solvency, in this case Prudential. Their PBGC guarantee no longer exists. Approving "standard terminations" gets the PBGC out of potential future liability, so why wouldn't it approve?
To the small number of US workers still receiving or eligible for defined benefit pensions, I view plan "standard terminations" as the biggest threat, not company bankruptcies. Again, this pension tangent is completely separate from the thread's topic, namely non-vested retiree medical benefits, which could always be terminated at an employer's whim.
I think the slogan many firms use needs to be corrected so it reads "Our employees are our most important liability."