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Old 10-12-2014, 07:38 PM
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Mary Pat Campbell
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
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Motorola Solutions Inc. and Bristol-Myers Squibb Co.BMY +1.58% are the latest companies to cast off billions in pension burdens, fueling a trend that could weaken the government’s ability to protect the payouts other employers have promised millions of retired workers.

The two companies recently disclosed separate deals that will shift a combined $4.5 billion in pension obligations to insurer Prudential Financial Inc., which will take over paying benefits to 38,000 retirees.

The deals are good for the two companies’ balance sheets. What’s more, joining the dozens of companies that have shed their pension plans lets Motorola and Bristol-Myers stop paying millions in yearly fees to the Pension Benefit Guaranty Corp., the government pension insurer.

The problem: the growing number of these pension dropouts threatens the agency’s resources for insuring the plans of those that remain in the system.

“This has identified a fundamental flaw with the pension system,” said Brad Belt, a former executive director of the PBGC. “Inevitably, there’s going to be a taxpayer bailout [of the PBGC] in the future.”


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