A lot of good advice and interesting takes on the pension, it does seem the company are going will be in a poor way this year, a friendly chat with an EVP has let me know to take lump sum and invest in wisely as if bankrupt all pensions will be affected
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I checked in October 2022 and pensions were 97% funded. So 3% is at risk of losing. This factored into my decision to take the lump sum pension and retire Nov 30 2022.
If you take the pension in a lump sum in 2023, it will be lower by about 25-30% compared to November 2022. The PBGC guarantees your pension up to a certain amount. From PBGC website:
"For 2019, the maximum guaranteed amount is $5,607.95 per month ($67,295.40 per year) for workers who begin receiving payments from PBGC at age 65. The maximum guarantee is lower if you begin receiving payments from PBGC before age 65 or if you receive your pension benefits in a form that provides benefits for a surviving spouse or other beneficiary. The maximum guarantee is higher if you are over age 65 when you begin receiving benefits from PBGC."
The chances of 3M going bankrupt is very, very low. The chances of most people reaching the PBGC payout limit is very low. Therefore, the probability of most people losing parts of their pension is very, very, very low. I retired last year from 3M to take advantage of the high pension lump sum. If my retirement were to have pushed out to 2023, I would take the monthly payout.
To the uk person who needs 2 more years.if I was you I would hang in there and take it easy. If you get made redundant you will get a good package , especially if you have have long service,this will keep you going till you get state pension. If you don’t get redundancy you still get paid and get pension contributions! Most uk 3mers I know work at home and don’t do anything, some even have more than 1 job, good luck !
To be sure, losing some retiree benefits like subsidized health care would stink but it's not as bad as losing your pension, like the non UAW people did at GM and Chrysler.
FINALLY some sanity on this topic
In the US, 3M pensions are managed by Willis Towers Watson. Within this management activity, 3M pensions are insured by the Pension Benefit Guarantee Corporation.
https://www.pbgc.gov/
This does not mean your pension is 100% guaranteed by the government specific to bankruptcies, but it does mean the funds are insured. Of course, the devil is in the details as it relates to “insured at what level.”
Rather than speculating on your pension concerns, contact the people at WTW through the 3M benefits links. They should be able to refine these comments.
Did some research into one of the companies mentioned earlier (Solutia, which was spun off from Monsanto) that went through chapter 11 and re-emerged.
The poster mentioning that bankruptcy (chap 11) does not affect pensions is correct.
This came from a legal case where Solutia retirees (who had accumulated benefits.from Monsanto) sued to get full retirement benefits.
"The retiree benefits at risk are specifically medical benefits, life insurance and disability benefits. Pensions are not included in any bankruptcy considerations at this time."
Any of the other perks (retiree medical, etc.) are typically not covered by ERISA. This would still sc--w over retirees but not losing your pension.
Worst case scenario is chap 11 of a spin that Vale (Mike's likely successor) saddles with the pensions and a bunch of other liabilities.
Try doing research instead of listening to your trusted EVP.
- Workers in bankruptcy situations face two important issues when it comes to their retirement benefits: access to pension benefits and the continued safety of their pension assets.
Generally, your pension assets should not be at risk when a business declares bankruptcy, because ERISA requires that promised pension benefits be adequately funded and that pension monies be kept separate from an employer’s business assets and held in trust or invested in an
insurance contract. Thus, if an employer declares bankruptcy, the retirement funds should be secure from the company’s creditors. In addition, plan fiduciaries must comply with the ERISA provisions that prohibit the mismanagement and abuse of plan assets.
- Your lump sum pension greatly decreased in value when it was revalued in December. This is done every year based upon rates published by the IRS. So taking it now vs. December 2022 means you have about 40% less. You should have taken it and retired by November 30 2022 to avoid revaluation. Good luck regaining the loss as it is not small.
I would like to leave but need two more years for state pension in uk. What is best for me