"I don't really know what's going to happen"; General Motors retirees reflect on bankruptcy

[Bozita]

Source: Flint Journal

"I don't really know what's going to happen"; General Motors retirees reflect on bankruptcy
by Ron Fonger | The Flint Journal
Saturday May 30, 2009, 9:00 PM

GENESEE COUNTY, Michigan -- Ron Jacob has more than a passing interest in what everyone has been telling him is an inevitable General Motors bankruptcy.

The 69-year-old Grand Blanc Township resident already knows the UAW and GM have reached a labor agreement that cuts dental, vision and other benefits for retirees.

Now Jacob hopes bankruptcy won't cost him his primary health care coverage and that the company's pension system stays solvent.

"I don't really know what's going to happen to my pension or my health care," said Jacob, who retired after 34 years from the old Flint Engine V-8 Plant.

Read more: http://www.mlive.com/news/flint/index.ssf/2009/05/i_dont_really_know_whats_going.html#more

[Deja Q]

1. On the radio this morning, a talk show, the main guy didn't know why the industry was collapsing

I don't know either, but I'd reckon the high cost of gas and American car makers wanting to make more SUVs than fuel efficient vehicles... GM's renowned (lack of) quality hasn't helped, and rumor mill suggests they bought parts from China (which would explain volumes given the existing track record)...

That retiree, and many others, worked hard for their retirement. Make changes affecting existing and especially future staff, but I hope the retirees are left alone.

[jwirr]

5. Just curious. Do persons covered by pensions also pay into Social

Security?

[Hannah Bell]

6. yes.

[Yupster]

9. Yes with a few exceptions

Most public school teachers in California and Texas are not required to be a part of social security. Many other states too.

I have no idea why teachers were carved out as a special group that were allowed to not contribute to social security.

It certainly hurts the social security sysyem for those workers to not be a part of it, and it would relieve much of the stress on the arithmetic of the system if the "universal" system would also apply to all schoolteachers.

[Igel]

11. They have DCPs of one kind or another.

Federal employees do, too.

The idea isn't that SS is sacred, but that similar benefits have to be paid upon retirement. When I was first hired as a grad student employee we didn't pay FICA, and neither did the school; a court ruled that this long-standing practice was wrong, that we were employees, so immediately we planned on having our pay reduced by the amount of the FICA tax. It didn't happen--the school set up a DCP, a defined contribution plan, in lieu of paying FICA.

My aunt worked for the VA administration, and likewise didn't pay FICA. She was part of the federal government's retirement system.

In the long run it would neither hurt nor help SS to have everybody pay into it. If they pay into it now it looks healthier, they have demands against it later which would make it look sicker. By not paying now, they won't be able to make demands.

There used to be a third option--pastors (and some other job classifications) used to be able to opt out of SS entirely, with nothing parallel to pay for it. It meant that they couldn't collect SS, and neither could their spouses (or children). My pastor and assoc. pastor were in this boat, and the church had to make sure it had the funds for meeting their and their widows' needs in retirement. Of course, the ministers never really retired--one's still alive and preaching, I hear tell, and the other was preaching until he fell ill and couldn't preach any more.

[Yupster]

12. Do you understand that the social security bendpoints formula

is an incredibly progressive formula to pay out benefits.

In other words, the lowest paid workers get a much higher benefit than the arithmetic of what they put in would add up to. In other words the middle class and especially upper class workers get less than they should because they support the lowest paid workers.

By not participating in the system teachers (middle class workers) are refusing to take their share of supplementing the poorest workers.

That puts additional strain on the social security system.

Also, if a kid has his mom die at age 12 she/he gets a social security check. The money for that check reduces everyone else's social security since it comes out of the system. I doubt if you'd ever find anyone to complain about sending that kid that check, but why do we all participate except those teachers? You don't think the teachers not participating in sending those kids checks puts an added strain on the system?

If someone becomes disabled, that check they get from SSI comes out of everyone's social security pot. Of course that puts more of a strain on the system by taking more money out of the pot, and again we all participate in ponying up for that worthy cause except those teachers. Of course them not participating puts a strain on the system.

Don't you think that stockbrokers or plumbers or engineers would love to set up their own system and handle their own members instead of social security? You bet they would, but they can't. Why? Got me? What makes teachers so special?

[MannyGoldstein]

2. I'm Pretty Sure I *Do* Know What Will Happen To His Pension and Health Care

Hint - it's not what happened to the bankers we bailed out.

Wouldn't it be nice if average folks were treated as good as bankers?

[AndyA]

3. Yeah, and how ridiculous all the explanations are.

We have to keep executive perks and bonuses in place because if we don't, the executives will leave and go somewhere else.

Hmmm...why the hell would a company want to retain an executive that oversaw the financial collapse of the company? If they're that good, wouldn't they have seen it coming, and taken steps to prevent it?

Let the assholes leave! No company in its right mind would want them anyway, after they drove another company into the ground.

The people of America truly are going to have to take control of the government back, or else this will continue. We must hold those we voted for accountable for their promises and their actions.

Sen. Baucus and the "no single payer option" committee is another example. Every single person on that committee deserves to have their backsides kicked hard to the electorate. It's disgraceful, but they do it because they're greedy and they don't think enough people are paying attention to make any difference. :(

[pattmarty]

4. I believe a BIG problem when a union (how many are left?) negociates.......

.....a contract when pension and insurance are part of the contract is that the company let the unions have the money to invest in a pension plan and also have their own insurance plan. I was/am a Teamster, retired and my pension in completely intact because the contracts were always structured so in addition to the raises, the companies paid the unions a per week contribution to the pension fund and insurance fund. The union INVESTED into a pension fund controlled by the union and also used the insurance monies to have their own health insurance plan. The health insurance I had over my 30 plus years was extremely good. The pension I now receive is very good and so far, well funded AND INVESTED. It seems that the UAW let the car companies "keep" the money that was for pensions and now that is the problem for the auto retirees. The companies "used" those monies and some courts so far have stated that they are no longer responsible for the retirees.

[Swede]

7. When you retire,take you vested money out of the plan.

It's your money,you should control it.

[Blue_In_AK]

8. My brother is a GM retiree.

Luckily his wife was a government employee for many years and retired as a GS-13, so they should be okay if anything happens to his pension, but I'm sure this is a shaky time for them.

[roamer65]

10. *IF* its handled like a normal corporate bankruptcy, it will be dumped onto PBGC.

They'll be lucky to get 20 cents on the dollar.