It may all soon change
Originally Posted by tjdonahoe
I been receiving my check from SS for 2 years and also one from IBT, they are there the first of the month and I don't worry about either one stopping
. Many pension funds including union and public employees' are grossly underfunded (IBT's for example is only funded for 60 cents on the dollar). The Pension Benefit Guarantee Corp (PBGC) backing up pensions, is also underfunded by $26 billion. So read everything that you get in the mail from you pension fund very carefully
My financial advisor told me to watch out for pension dumping because Dodd-Frank arranges for the establishment of annuity fund pools via the major insurance companies. Underfunded pensions can then transfer their assets and obligations to the pools and wash their hands of them. The annuity funds are then allowed to cut payments and obligations
as needed to remain solvent.
Retirees in well funded pensions are not immune from payment cuts either as their healthy pensions may be pressured to move their assets into these pools to prop up the poor ones.
The reason to watch the mail is because you may be given options as these pensions are dumped...for example....taking a big cut and staying with the PBGC guarantee .vs. moving to an annuity pool with less of a payment cut but no guarantee.
Here is how pension dumping is played out at GM
For people already drawing pensions it means a lose-lose scenario down the road.
For those getting ready to draw a pension - I say get as big a lump sum as you can, as soon as you can, and invest it yourself.