Tagged: pensions

Today is the deadline for more than 40,000 General Motors retirees to accept their former employer's offer of a lump sum buyout of their pensions.

Otherwise, their pensions will be taken over by Prudential Insurance.

GM's Randy Arrix said the change is part of the company's efforts to create what it calls a "fortress balance sheet."  Getting underfunded pensions off the books strengthens the balance sheet.

"Pension obligations are very volatile, and they're volatile because they're dependent on some things within our control like contributions, and other things that are not, said Arrix.

Some GM retirees are angry about the change, which they see as a broken promise by GM, but for others, the buyout is an opportunity to control their own money.

LANSING, Mich. (AP) - The Michigan Senate is expected to vote on legislation that would end state-provided health care coverage in retirement for new public school hires and require current employees to pay more toward pensions.

The Wednesday legislative session is the only one scheduled for July. The Senate is expected to take up the bill passed last month by the House.

The bill doesn't contain earlier language that would force new teachers into a 401 (k)-style plan. The measure calls for studying how ending the pensions would affect the state.

90,000 white collar Ford retirees will soon have a big decision to make. Should they stay in the auto company’s pension plan? Or take their chances with a lump sum payout instead?

The offer Ford Motor Company announced in late April is believed to be the first of its kind for such a large ongoing pension fund.

Lump sum the buzz at Ford retirement clubs

In Michigan there are more than 30 clubs for Ford retirees. The lump sum option is the conversation at retiree club meetings right now.

“Retirees are going to have to make a decision about mortality, about death; their own. That’s not something we do every day,” Ford retiree Charles White said. White worked at the Dearborn campus for 29 years in engineering management. He retired in 1996.

Rising pension costs may throw a monkey wrench into the city of Lansing’s plans to hire police officers next year.

Lansing’s mayor proposed using money from a special public safety millage to rehire nine laid off police officers.    But the mayor’s office released a draft report Monday which says the city will have to come up with nearly two million dollars next year to cover rising police and fire pension costs.  

Democrats in Lansing plan to use this week’s tax-filing deadline to re-open the debate about last year’s tax overhaul at the state Capitol.

Democrats think the tax issue will help them in elections this year. Seniors born after 1946 have their pensions taxed for the first time. Deductions and tax breaks for many charitable donations will be gone when state taxpayers file next year. At the same time, taxes were lowered for many businesses.

Democrats intend to remind voters of that as they try to win an additional nine seats in November to take control of the state House. They say more than a dozen swing districts will be the target of fierce campaigning on the issue of taxes.

Republicans says there are elements of the tax overhaul that were unpopular, but necessary to streamline and simplify tax filing and to make Michigan a more business-friendly state.

Teachers turned out by the hundreds in Lansing to oppose legislation that would force them to pay more for their pensions and retirement health care, or have their benefits reduced.

Some of them protested outside a state Senate committee hearing today on the legislation.

One of them was Pinckney teacher Sam Ziegler. He says the measure would break a promise to his profession.

"I knew I wasn't going to be a millionaire teaching," Ziegler said. "But it was something that was worthwhile that benefited others and myself, and I was told that I'd have a pension to go to and now it’s just slowly eroding and I see the danger that it will keep eroding away."

But some Republicans like state Senator Patrick Colbeck says the public school employee pension fund has liabilities so big the system could go insolvent if nothing is done. 

"Somebody’s got to pay for that eventually, later and right now that’s being pushed off because – if we’re talking about dealing with unfunded liabilities – being pushed off to the same kids that we're working hard to educate right now," said Colbeck.

Teachers say state government has increased the stress on the system with budget cuts that reduce districts capacity to pay into it, and forced layoffs that mean fewer people paying into the system.