Re: IBM offloads $16 billion in pension liabilities
"Insurance companies are run to make a profit.? Although they are supposed to have a fiduciary responsibility to the annuity recipients, they balance that against their desire to make a profit.? Where IBM has invested the pension funds very conservatively (mostly in bonds), I expect that Prudential and MetLife will change this somewhat to get better returns by investing more in stocks and other higher risk investments."
Pension beneficiaries MUST pay close attention to government initiatives broadening investment regulations beyond fiduciary duties to beneficiaries, encompassing broader "stakeholders" and goals such as ESG (Environmental, Social and Governance).?? In our case, Insurance companies' obligations to invest for "returns" on social and environmental goals could mean that beneficiaries' pension payouts ($) become increasingly replaced by vague "returns" on social and environmental goals (not $). ? But this new government "stakeholder" push also affects how most other financial managers (mutual funds, ETFs, etc.) must "invest."?? Please contact your Congressional representatives to protect against this significant threat to protecting your savings, and remember this when you vote.
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Re: IBM offloads $16 billion in pension liabilities
Thanks for that explanation, very helpful. Mark Buchanan Down2Earth Images
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Re: IBM offloads $16 billion in pension liabilities
On Thu, Sep 15, 2022 at 06:29 PM, JoeRoth wrote:
Is that for future retirees?
No, this apparently is for those who retired before 2016.
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Re: IBM offloads $16 billion in pension liabilities
But they only offloaded a portion of the liability, less than half.? So what does that mean to ERISA coverage???
IBM says that this affects 100,000 retirees. who retired before 2016.? As of the end of 2021: The total number of participants and beneficiaries covered by the Plan on the Valuation Datewas 257,221. Of this number, 21,398 were current employees, 174,887 were retired andreceiving benefits, and 60,936 were retired or no longer working for the employer and have aright to future benefits.So those 100,000 might be the fraction of the 174,887 that retired before 2016.?? I can't quite figure out how that could require only $16 billion in funding.? My simple calculation says that 100,000 retirees would make up $21 billion of the plan's $46 billion in liabilities All I can think of is that many of those 100,000 are older retirees, some of whom retired in the 80s and 90s when salaries and the corresponding pensions were smaller. ? The remaining 157,000 are younger employees and retirees who benefited from larger salaries, and therefore their share of the pension fund is larger. In terms of ERISA protections, those retirees whose pensions are converted to an annuity will no longer be protected by ERISA.
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Re: IBM offloads $16 billion in pension liabilities
Is that for future retirees?
On Thursday, September 15, 2022 at 06:11:07 PM EDT, Richard Berry <shadowberr@...> wrote:
But they only offloaded a portion of the liability, less than half.? So what does that mean to ERISA coverage???
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Re: IBM offloads $16 billion in pension liabilities
But they only offloaded a portion of the liability, less than half.? So what does that mean to ERISA coverage???
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Re: IBM offloads $16 billion in pension liabilities
Thank you for that informative response.?
What this means is that retirees will receive their monthly checks from two insurance annuities with Prudential and MetLife.? It will show up as a single check from Prudential, but will be actually paid by both companies.? Things will look very similar to the way they do now - the amounts will be the same, But instead of the money coming from the IBM Pension fund, it will come from insurance annuity funds set up with the insurance companies.? IBM will no longer have any responsibility for the payments - now the responsibility will be with the insurance companies to properly invest and manage the annuity funds.? With the pension fund, if it became underfunded, IBM would have to add more money to it.? Now, IBM will be off the hook and it will be up to Prudential and MetLife to figure out how to cover any shortfall.
Another difference will be that the federal ) will no longer back up the pension payments should the fund get into trouble.? Today, the PBGC would cover pension payments up to about $74,000 a year for a retiree at age 65.? With the insurance annuities,the PBGC coverage is gone.? Instead, would provide coverage should the insurance company go bankrupt.? The amount of coverage depends on the state you live in, and also is based on the present value of the annuity at the time of bankruptcy, rather than the monthly (or annual) amount you receive.? This could mean that a retiree would get less than their full pension in the case of a bankruptcy.?? But before things ever get to that point, states work to transfer the responsibility for paying the annuities to other, healthy companies.? Often, they are successful in doing this and no one loses anything.
Another difference is that pension plans are not run to make a profit.? They must follow strict federal guidelines to ensure that they are able to pay all the pension liabilities.? Insurance companies are run to make a profit.? Although they are supposed to have a fiduciary responsibility to the annuity recipients, they balance that against their desire to make a profit.? Where IBM has invested the pension funds very conservatively (mostly in bonds), I expect that Prudential and MetLife will change this somewhat to get better returns by investing more in stocks and other higher risk investments.
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Re: IBM offloads $16 billion in pension liabilities
What this means is that retirees will receive their monthly checks from two insurance annuities with Prudential and MetLife.? It will show up as a single check from Prudential, but will be actually paid by both companies.? Things will look very similar to the way they do now - the amounts will be the same, But instead of the money coming from the IBM Pension fund, it will come from insurance annuity funds set up with the insurance companies.? IBM will no longer have any responsibility for the payments - now the responsibility will be with the insurance companies to properly invest and manage the annuity funds.? With the pension fund, if it became underfunded, IBM would have to add more money to it.? Now, IBM will be off the hook and it will be up to Prudential and MetLife to figure out how to cover any shortfall.
Another difference will be that the federal ) will no longer back up the pension payments should the fund get into trouble.? Today, the PBGC would cover pension payments up to about $74,000 a year for a retiree at age 65.? With the insurance annuities,the PBGC coverage is gone.? Instead, would provide coverage should the insurance company go bankrupt.? The amount of coverage depends on the state you live in, and also is based on the present value of the annuity at the time of bankruptcy, rather than the monthly (or annual) amount you receive.? This could mean that a retiree would get less than their full pension in the case of a bankruptcy.?? But before things ever get to that point, states work to transfer the responsibility for paying the annuities to other, healthy companies.? Often, they are successful in doing this and no one loses anything.
Another difference is that pension plans are not run to make a profit.? They must follow strict federal guidelines to ensure that they are able to pay all the pension liabilities.? Insurance companies are run to make a profit.? Although they are supposed to have a fiduciary responsibility to the annuity recipients, they balance that against their desire to make a profit.? Where IBM has invested the pension funds very conservatively (mostly in bonds), I expect that Prudential and MetLife will change this somewhat to get better returns by investing more in stocks and other higher risk investments.
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Re: IBM offloads $16 billion in pension liabilities
I'd always hope this would never happen so as to keep ERISA protections. Just like IBM to have the last laugh. Sucks.
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Re: IBM offloads $16 billion in pension liabilities
Roy may know more about this than I do.
IMO, it mean's that IBM is reducing its risk and increasing ours (retirees). Our risk is increased because we'll lose the Federal protection for our pension payments.
That said, at least so far, our risk increase looks to me like it will be fairly small. Because IBM is selling the obligation to pay our pensions to two top-notch insurance companies (Prudential and Met Life).
I suspect we'll be getting a letter from IBM, before the end of this year, with more details.
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Re: IBM offloads $16 billion in pension liabilities
Can you please explain what this means to those of us receiving a pension under the defined benefit plan? Thanks
Sent from Maude's iPhone
On Sep 14, 2022, at 4:10 PM, Roy Barnes via groups.io <choicer27yrs@...> wrote:
??
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IBM offloads $16 billion in pension liabilities
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Re: IBM Pension Plan Faces Outdated Mortality Data Challenge
Shocking, hard to believe IBM would screw their own employees......LOL
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https://www.planadviser.com/ibm-pension-plan-faces-outdated-mortality-data-challenge/
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IBM Pension Plan Faces Outdated Mortality Data Challenge
https://www.planadviser.com/ibm-pension-plan-faces-outdated-mortality-data-challenge/
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Re: Both netbenefits.com and computershare no longer work
I'm able to log into both without problems.?? It may be a problem with your browser or PC, or a network problem with your ISP.
Are you able to at least get to the log in page for either one?
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Re: Both netbenefits.com and computershare no longer work
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Re: Both netbenefits.com and computershare no longer work
please let me know. Hope someone has? the answer.
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-------- Original message -------- From: Don Phillipe <donphillipe@...> Date: 3/20/22 7:09 PM (GMT-05:00) Subject: [ibmpension] Both netbenefits.com and computershare no longer work
Signing in to download my forms for tax season and all the old IBM websties seem to have stopped working.?? Anyone know where to go now to get the info?
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Re: Both netbenefits.com and computershare no longer work
toggle quoted message
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Signing in to download my forms for tax season and all the old IBM websties seem to have stopped working.?? Anyone know where to go now to get the info?
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Both netbenefits.com and computershare no longer work
Signing in to download my forms for tax season and all the old IBM websties seem to have stopped working.?? Anyone know where to go now to get the info?
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Re: IBM Pension and Kyndtyl Spin-off
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JoeRoth
Roy Barnes
Don Phillipe