It was only a matter of time. Perhaps this is one of the reasons so many of our leadership have left. Another sign that our once great company is going by the wayside. Very had to watch.
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Just going to point out that the union pensions were not touched. It might be time for more 3Mers to organize and unionize. Along with the rest of the plants I'm sure a few of the HQ functions could unionize. The R&D technicians, admins, and maybe even the engineers could all go for it, that would stop much of the benefit bleeding.
https://www.google.com/amp/s/www.marketwatch.com/amp/story/3ms-ceo-is-in-line-for-a-26-million-pension-as-company-freezes-the-plan-for-employees-777bbf12
Sad news indeed. As retired 3Mer I remember the pre-McNerney days when the buzzwords were "Our employees are our most valuable resource". Years before my retirement you could see the slow erosion of a once ethical company taking place. At this point I shouldn't care, but I do because I used to take pride in my job and my employer. I'm very sorry for those left behind and wish them luck in finding an employer who appreciates them.
All affected 3Mers should make sure that their voices are heard during Town Hall meetings this year.
No point in just ranting in an anonymous board.
Always remember one thing, our voices still matter to some extent and the C suite level people know that.
Without the hard work of worker bees ,nothing productive gets done in a manufacturing company like Mother Mining.
TheLayoff.com
Thread regarding 3M layoffs
This announcement, while disheartening, was not unexpected
There are a couple of noteworthy things. 1) The five year notice is decent under the circumstances. 2) It clearly gives a data point on the time frame and trajectory on the future. Most companies no longer want the long term liability of pensions.
Regarding bankruptcy. Pensions are "guaranteed" under the government's Pension Benefit Guarantee Corporation. I suggest researching this thoroughly. My understanding that the PBGC does not guarantee pensions at 100% if the company goes bankrupt and sells off the pension. It could be as low as 65%.
You must consider whether the 3M will fund the pension for the duration of your lifetime. If you think it could be reduced, then you should consider the lump sum. Note that with the lump sum it will change in accordance with interest rates, specifically the 417e segment interest rates. Generally, a 1% increase in the 417e segment rate from November to November results in a 8 - 12% reduction in the lump sum.
There is a lot to consider. Speak to a trusted financial advisor to make the best decision for you and your family.
The best take I've seen on this so far. Reposting from @jsn+1qtADZ0S for more visibility.
8h ago by Anonymous
6 replies (last 56m ago)
730 views | 2 reactions (+2/-0)
Post ID: @OP+1quAVeqC
+2
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Reading the MR lack of impact, in addition to a good read, is stomach turning…
56m ago by Anonymous
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Post ID: @dru+1quAVeqC
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Good read:
https://www.msn.com/en-us/money/companies/3m-s-ceo-is-in-line-for-a-26-million-pension-as-company-freezes-the-plan-for-employees/ar-AA1mIj7Q
At least you can buy more MMM stock inside your shiny new 401k!
$750k hit for a JG15 sounds like a first world problem. I - and many others - were a couple years late to the party and are slumming it with our 401k match.
I think what 3M has decided is more than folks could have hoped for. It is true that the youngest of the pensioned employees will be more impacted, but at least there is time for everyone to make a plan. Also, this ^^^ guy will survive.
I did my own math for all of my exact numbers today and this is about a $750k hit for me - that includes the offset of the 3% 401k thing. I did not assume much for annual increases because hello I am past hanging on to false realities. I also did not assume the 3% 401k add grew to anything very remarkable. I am 44 years old. A job grade 15. Have been with the SinkingShipCo for 23 years. I never assumed the pension would be unscathed, but i must say, this cuts much deeper than I forecasted on even my most pessimistic day.
All I can say is that I am very, very sad and angry our leaders have failed 3M’s employees, shareholders and customers. Someone mentioned the Titanic earlier and the analogy is appropriate for so many reasons. We are sinking and the SVPs and above are making sure they survive and the rest of us are left behind without a lifeboat.
I got around to doing the math this afternoon. I will lose 27%-this assumes lump sum retirement at 65 under Portfolio 1. I included the additional 401K in the frozen scenario and used a 7% rate of return and a 3% annual increase.
"Is the pension plan really that much better?"
Short answer: Yes, especially Portfolio I.
Longer answer:
The math gets complex and person specific, but a full-pension Portfolio 1 person is getting roughly a 15% pension contribution today, plus the current match. A typical Portfolio 2 person is getting somewhere around 8%-12%, again, plus the current match.
The extra 3% match to 401k is complete and utter cr-p in comparison. 3M isn't doing this to make things better for the employees.
3M is kicking an extra 3% match for the affected employees once the freeze takes place. So the pensioners get an 11% 401k contribution annually. Is the pension plan really that much better?
So prediction on pension freeze come true. What would be next? Dividend cut or reduce before spin off?
I went through my own calculations, then adjusted against the salaries in each cohort listed in the latest Form 5500 data (page 270 of the pdf). The results are appalling.
The average employee younger than age 50 will lose between $671K and $1.14M in lifetime payout, depending on exactly what age they would have retired.
The actual contribution 3M makes for the remaining ones left (primarily) in Portfolio II is relatively low, roughly $150M last year. This, of course, will naturally trend further downward as people retire, die, or leave. For context, in 2018, the pension contribution was $366M. So, this decision certainly means less money being paid out by 3M, but not at a rate that really makes a difference at an appropriate scale. Also, keep in mind that the aggregate contributions to the 401k plans will increase somewhat to soften the blow, which will further decrease any savings. (This increased from $173M to $241M in the same 2018 to 2022 time period)
Definitely a massive kick-to-the-shins for the 40-50yr old cohort, and will undoubtedly further increase attrition and decrease morale.
This announcement, while disheartening, was not unexpected. There are a couple of noteworthy things. 1) The five year notice is decent under the circumstances. 2) It clearly gives a data point on the time frame and trajectory on the future. Most companies no longer want the long term liability of pensions.
Regarding bankruptcy. Pensions are "guaranteed" under the government's Pension Benefit Guarantee Corporation. I suggest researching this thoroughly. My understanding that the PBGC does not guarantee pensions at 100% if the company goes bankrupt and sells off the pension. It could be as low as 65%.
You must consider whether the 3M will fund the pension for the duration of your lifetime. If you think it could be reduced, then you should consider the lump sum. Note that with the lump sum it will change in accordance with interest rates, specifically the 417e segment interest rates. Generally, a 1% increase in the 417e segment rate from November to November results in a 8 - 12% reduction in the lump sum.
There is a lot to consider. Speak to a trusted financial advisor to make the best decision for you and your family.
I am one of the last portfolio 1 employees. Hired in 1998. This will have a big impact on me. Wonder who many people that are eligible for the social security bridge will retire early to get this.
Nearly all the Portfolio I eligible employees would get full (or very close to full) pensions.
Portfolio II employees get screwed over hard and will never see even most of the reduced pension. They are mostly in their 40's, so they have more time to adjust - hopefully at a better company.
If you take the view that "I am so fortunate that 3M even offers me a pension, I am the luckiest man alive" then sure. But back in reality, 3M just stole a bunch of my retirement money. Basically theft. At least the Portfolio 2 people are young enough to go elsewhere, and likely will in droves. Not the case for many of the rest of us.
This announcement is not surprising, it has been a long time coming. The only thing surprising is how far out the cutoff date is. I don't think RemainCo avoids bankruptcy all the way to the end of 2028...
Assuming the 2028 date holds, that would mean:
- Nearly all the Portfolio I eligible employees would get full (or very close to full) pensions.
- Portfolio II employees get screwed over hard and will never see even most of the reduced pension. They are mostly in their 40's, so they have more time to adjust - hopefully at a better company.
In general, pension benefits should be fine in bankruptcy. Current retirees will get their checks, current and former 3Mers will get theirs when they claim them at retirement. What would likely change is that the end of 2028 date contributions stop would move up to the day of bankruptcy.
https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/your-employers-bankruptcy.pdf
The US government has a pension protection program. You can search your favorite browser to get first hand knowledge of how it works.
I remember that there are two factors that are important. One is how long you have been separated from the company when it declares bankruptcy. The longer you have been seperated the better until you reach a cap. The cap of what you can receive is limited based on the value of your pension. Since, at 3M, the pension amount is calculated based on pay, if you are paid a lot you may not get your full pension ever.
If I recall correctly, if you are working for a company that goes bankrupt, you don’t qualify for pension protection.
It’s unclear what exactly happens after 12/31/28. If we are paid out our lump sum it’s possible that we can have returns that could match or exceed the lump sum estimates at retirement. If they keep that money for the remaining years prior to retirement it’s essentially a carrot that has been taken away and shoved in our a$$. It’s really unfortunate I have been here over 20 years and this is looking like it will cost me in excess of $300k. A lot of people in portfolio 1 will be hit harder than that.
It is yet another day on the Titanic unfortunately. I knew this was coming, but that does not make reading the email any easier. I am not sure what it means for me specifically, but when I did the calculation once before it essentially cut my benefit in half ... but I assume there won't be anything left of it in general, they will find a way to not have that liability on their books. Or - it will all go up in smoke when bankruptcy is declared. I am glad my retired friends are living all fat and happy in their golden years - must be nice.
What happens to pension plan in event of bankruptcy ? There is definitely finite chance of bankruptcy before Dec 2028.
"effective Dec. 31, 2028"
Don't worry, 3m will have long-since been downsized, parted out, slashed and burned by that date. Any remaining employees will be lucky for a sliver of a profitable semblance of the original 3m existing at the end of 2028.
Throughout recent layoffs, it's been very obvious that they've been targeting pension-eligible employees. This is just more evidence they want them all off the active employees list.
https://news.3m.com/2024-01-08-3M-announces-U-S-pension-plan-actions
ST. PAUL, Minn., Jan. 8, 2024 /PRNewswire/ -- 3M (NYSE: MMM) announced that it will freeze its U.S. pension plans for non-union U.S. employees, effective Dec. 31, 2028. Pension-eligible employees will continue to accrue benefits under the pension plans until the freeze date. This decision applies to both 3M and the future, independent health care company's U.S. pension plans.
Former employees with vested pension benefits, 3M or 3M Health Care retirees, and those currently receiving pension annuity payments are not impacted by this action.
The move from a pension plan structure to a 401(k) retirement plan structure has been underway at 3M for many years. In 2009, the company closed Portfolio II of the U.S. pension plan to new hires and rehires. By moving to a 401(k) retirement plan structure, the company is focused on providing employees with more flexibility and control when it comes to investing in their future.
"This is an important decision for 3M as it helps to set up both companies for future success. This was also a difficult decision because it impacts employees across the United States. To help those impacted, we are providing five years of advance notice to ensure our employees can plan alternative strategies to meet their post-retirement income needs," said 3M Chairman and CEO Mike Roman.
What was the pension plan action?
Someone needs to find compromising information about the sleezy MP. Compromising pictures or something on that creep.