Pensions may be outsourced

[donsu]

http://onlinejournal.com/artman/publish/article_390.shtml


Pensions may be outsourced
Banks look to take the plans and their assets off the hands of employers.

WASHINGTON -- Would you feel comfortable if your company sold off your pension plan to a big bank? This month, Citigroup Inc. got the green light from the Federal Reserve for an unusual deal to take over the $400-million retirement plan of a British newspaper company. In exchange for getting its hands on all that cash, Citigroup will run the pension plan -- investing the money, paying the benefits and taking on the liability previously borne by Thomson Regional Newspapers. And it's eyeing similar moves stateside.
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[antigop]

1. Yep. The NRLN has a letter into Sen.Kennedy

http://www.nrln.org/Letters_Norby/NRLN_pension_buyouts.10.17.07.htm

The leaders of the 17 retiree associations affiliated with the National Retiree Legislative Network have read with grave concern the news reports that some financial firms are attempting to clear a regulatory path that would allow them to buy out corporate-sponsored pension plans that are the livelihood of millions of retired Americans. We cannot help but be suspicious that this is a profit-driven motive and is not in the best interest of retirees.

[antigop]

2. And the question is....

Can they invest in CDOs?

[MNDemNY]

3. We should just "outsource" the retirees.

Send them to Mexico...don't let em back in.

[DrDan]

6. uh . . . . I assume there was some sarcasm behing your post . . .

[MNDemNY]

7. Noooo not at all......... ............... .....................

Well, maybe a little.

[flashl]

4. Haven't we already demonstrated that this wont work?

The Pension Benefit Guaranty Corporation (PBGC)

PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of nearly 44 million American workers and retirees in 30,330 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

Corporate bankruptcies exhaust US pension guaranty fund

29 January 2003

The US Pension Benefit Guaranty Corporation has exhausted its entire $8 billion surplus as a result of a series of big corporate bankruptcies last year, the agency reported last week. The PBGC provides partial protection for private pensions paid to 44 million workers.

Three big steelmakers accounted for most of the drain on the PBGC’s resources: Bethlehem Steel, whose pension fund required an infusion of $3.7 billion; National Steel, which was $1.1 billion in deficit; and LTV Steel, whose pension bailout (the second in 16 years) cost $1.6 billion.

Read More ...

[Faux pas]

5. I'd rather cash out and take the loss than give my money away to

some bank hoping it'll be safe(r). I'm already getting a pension from a state owned/run plan...I can't see Calif handing control over all that dough to a bank anytime in the future.