Kodak Pensioners; how do they fare?

[christer_almqvist2]

<p>Sorry for the off topic question, but I do not know who could provide an answer except somebody on this list. Perhaps there is even a Kodak pensioner here to fill me in with personal experience. </p>

<p>I assume Kodak had an employee pension plan. With a workforce now substantially smaller than it was for decades, the current work force obviously cannot support the pensioners. Thus my question: how are Kodak pensions financed? Have they been reduced?</p>

<p> </p>

[cj8281]

<p>I would suck to work your whole life (or most of it) for one company, expect to get what was promised to you and then have that taken away or greatly reduced. A very good question indeed.</p>

[tim_eastman]

<p>Thank Wall St. for treating pensions as giant sums of cash to be sucked up and redistributed up the wealth ladder, rather than sacred obligations to workers whose sweat and toil made the wealth possible. In an era when the chieftains of industry and finance still had a conscience, when they were not making 343 times average worker's pay, the raiding of pension funds would have been considered disgraceful. Today it is some perverse badge of honor. Consider American Airlines declaring bankruptcy with $ 4 billion in the bank; a nice dodge to shed union contracts, while CEO's will doubtless come through unscathed. In some circles AA's bankruptcy is seen as a smart business move by a corporation now granted personhood status, yet if the rest of us " persons " tried to dodge our obligations it is seen as some kind of moral failing.</p>

[Matt Laur]

<p>Tim: most pension funds have nowhere near enough money in them - <em>ever</em> - to support the long lives of contemporary retirees, especially the ones that die of $150,000 cases of cancer in their 90's. The ability to muddle through a company's future while keeping up with those future payments always depends on <em>ongoing revenue</em> from the company's business activity. Kodak doesn't have much of that. It's not because some cartoon-quality imaginary Fat Cat villain at Kodak took all money to Vegas to spend on whiskey and women. It's because they failed to make smart decisions about an evolving industry landscape.<br /><br />There's a reason that the trend has been towards individual retirement accounts. It makes sense to de-couple your future cash flow from the continued success of a single company and their market smarts.<br /><br />Characterizing "Wall Street" as being responsible for insufficient balances in retirement accounts is no more helpful than blaming "Unions" for killing companies by insisting on unsustainable retirement benefits that cost more than the company can ever generate. This is a case-by-case, company-by-company issue. Colossal pension funds (and funding them) are in many cases out of fashion because they have a way of bankrupting the very companies that people expect to keep paying them for longer in retirement than they worked. <br /><br />I have a client that is a non-profit pension board. They oversee huge amounts of money, and handle it very, very conservatively. Their members see only modest returns, but the reason they get <em>any</em> returns and growth in that fund is <em>because</em> there is a Wall Street out there - where the fund managers can look for new opportunities for shrewd investment. The retirees who live off of this board's day-to-day decision making along those lines wouldn't be keeping up with the cost of living if it weren't for the pension board's ability to invest in stocks, and <em>profit</em> from those investments.<br /><br />Equity investment activity doesn't kill pension funds - it's what <em>sustains</em> pension funds.</p>

[kris_francis]

<p>I had the opportunity to work for Eastman Kodak in the early 1980's, but turned it down. That decision looks like a good choice now.</p>

[Charles_Webster]

<blockquote>

 

<p>I had the opportunity to work for Eastman Kodak in the early 1980's, but turned it down. That decision looks like a good choice now.</p>

 

<p><a name="pagebottom"></a></p>

</blockquote>

<p>I'd say it was a bad decision. Kodak during the late 80's and early 90's was thriving, producing more film and film cameras than any time in history.<br>

Looking at the situation today, three decades later, and making that statement is a little silly, because like every other company that has lasted decades, the company today is not the same company it was 30 years ago.</p>

<p><Chas></p>

[john_shriver]

<p>If they Chapter 11, they will probably have to kill the pension plan, and it will become a liability of the Pension Benefit Guaranty Corporation (PBGC), which is part of the US Department of Labor. They will continue to get their cash pension, up to a cap of something like $53,000 a year. But I don't think the health plan benefits come along. Lots of Polaroid retirees got serious pension cuts when their pensions were passed over to PBGC.<br>

Defined benefit pension plans dissappeared to to ERISA (Employee Retirement Income Security Act), which provided insurance for defined benefit pension plans through the new PBGC. (Before that, if your former employee went belly-up, your pension vanished.) But, to provide the insurance, they required the future benefits to be properly funded. That was too expensive for the employers. So companies phased out the defined benefit pension plans, in favor of 401(k)'s. So ERISA's unintended consequence was to eliminate defined benefit pension plans, instead of making them strong and secure.<br>

ERISA also successfully eliminated certain forms of abuse of pension plans by owners. There were some dirty games they would play, essentially stealing the employees un-vested balances for the owners.</p>

[walter_degroot]

<p>I worked as a tem for the last 25 years of my working life. There was no safe haven to work and expect to stay until retirement..<br>

So I get nothing. But several others did work and the stories are mostly sad.<br>

1- a friend, not 81 was at ITT for 19 years and was squeezed out during his divorce, for medical reasons and lost his entire pension rights.<br>

a neighbor worked for NJ transit and put in his 24 years and had a stroke, they covered him and eh was able to get his retirement.<br>

he has since recovered, But co-workers who though elegible to retire " hung in' to increase their benifits , and found that they got less than my neighbor as NJ cut back on these entitlements.<br>

someone else worked in a senior position at RCA astro which became ge astro then martin marietta.<br>

he was entitled to a full pension but it took 6 years and a class action suit by formet employees<br>

to force the new owners to give back the money.<br>

and then there is the case in Indiana where teachers and policement had bonds? from Chrysler and when the<br>

Obama administration more or less gave the company to Fiat and the UAW the<br>

money was taken away from the FAT CATS, meaning the fiund managers.<br>

( decision by ruth baded ginsburg)<br>

write this on the back of your hand<br>

"the little guy always gets screwed"</p>

<p>I really hope history does not repeat itself and these hard-=working, long term employyes<br>

get what they expect and are entitled to. Jost do not hold your breath.<br>

almost all of the big companies I worked for during that 25 year period are either gone or operating elsewhere under a different name.</p>

[tom m.]

<p>I received a substantial reduction to my pension when it was taken over by the PBGC following the Delta Air Lines bankruptcy. I suspect the same thing will happen to the Kodak retirees when their company goes bankrupt.</p>

[User_502260]

<p>Pension obligations can be estimated and prepared for if they are handled in a responsible way. We are now living in a time when public pensions are in just as much danger as private ones. States like NJ routinely underestimated their obligations and in many years simply refused to make the necessary contributions. It's easy to tell people they are gettiung a tax cut today but harder to tell them they will have no pensions tomorrow. ERISA regulations were always slanted in favor of the employers. Once employers saw that they could get away with handling pension assets without regard to the consequesnces and that they could dump the responsibility in the lap of the PBGC, we were well on the way to where we are now. Without Social Security retirement benefits the spending power of retirees would be reduced so drastically that the economy would never recover. Still there are politicians who are offering tax cuts and who plan to pay for them by underfunding Social Security. This sounds great to twenty-five year olds but not as good to a sixty-five year old. </p>

[jcuknz]

<p>The problem when pensions came in and were based at say 65 year old is that back then very few lived very long past that retirement age .... hence the calls to increase the entitlement age to 70 today .. since these days thanks to modern medicine an impossible strain is being put on any pension fund. Government has to pay both pensions and health costs in many countries.<br>

Though really it is a question of government priorities, but that is bordering on political so I will stop here.</p>

[randrew1]

<p>I can relate the experience of one Kodak pensioner. When I left the company in 2005 I took the "pre-1995" portion of my pension as a lump sum. The quantity of the lump sum was equal to the cost of an annuity that would produce the monthly defined benefit. Many employees started watching the interest rates and retired in a month when the rates were low and would result in a high lump sum. In 1995 they changed the rules. The "post-1995" portion can only be received as a monthly pension. I have submitted the paperwork to receive this portion of my pension starting next month. (I don't need it now since I have a full time job at an older and more stable imaging company in Rochester. If I wait until later, the monthly amount will be lower. This doesn't make actuarial sense, but it is legal.) The amount of this monthly pension is far below the maximum amount that the PBGC will cover so I think I am OK.</p>

<p>Newer employees (there are a few) only get a 401K with defined company contributions. When they introduced this change, they gave existing employees the option of converting to a defined contribution plan with a large initial contribution to compensate for the loss of the defined benefit plan.</p>

<p>I have no idea what will happen to those still working at Kodak.</p>

[nsfbr]

Matt - Apples and Oranges. The problem with pension shortfalls is due to changes in law that has allowed companies to

make unrealistic assumptions about pension balances and ingest the "excess" as profit. Then, as part of restructuring,

not just in a continuing bankruptcy, but large in private equity acquisition and turnover (ie, what Bain Capital did under

Romney) this was viewed as a primary profit making tool.

 

The big picture problem is that pensions are insured, so that pension holders are somewhat protected, at a cost to the

rest of us. The vultures profit, everyone else pays the price and wealth inequity increases. This has nothing to do with

the beneficial aspects of the capital markets. It has everything to do with the rules being set up for and by a small fraction

of the population due to the combination of disparate resources and money corrupting our political system (not just the

financing of campaigns, but in the revolving door aspect of it.)