General Motors Pensioners

[Malibook]

I don't know whether this is true for sure under either Canadian or American law, but as I speculated above:

Aren't pension liabilities and wage liabilities ahead of secured bonds in bankruptcy court?

If so I think the bondholders are going to get a big haircut no matter what. If Obama walked away and let GM fail, for example, I suspect the bondholders get damn near zero out of a bankruptcy court.

I think their claims that they could get more are dreams not based in reality, a negotiating tactic. Doesn't GM in the US have the same unfunded pension liability issue as it does in Canada?

Or is the GM US pension plan actuarially sound?

If the company liquidates and ceases to exist, I think the pension obligation should be calculated for some reasonable period of time, not everybody's projected life.
I think current obligations should take priority but future payments should be limited.

Sort of like how employees should be entitled to some amount of severance pay, not what they would have made if the company survived for the rest of their lives.

I don't know how the proceeds of a liquidation would be distributed, except that shareholders are at the end of the line, but it looks like it will not be allowed to happen.

Obama wants GM bondholders to exchange $29 billion for a small slice of a company with a market cap of just over $1 billion.
Even the whole company would only equal a few cents on the dollar so a small slice is basically nothing.
Why should current shareholders retain anything if bondholders are getting killed?

What Happens In Bankruptcy/How would GM's bankruptcy work?
http://www.cnbc.com/id/30087381/site/14081545?__source=yahoo|headline|quote|text|&par=yahoo

 

[oldjones]

Would you please stop making up bullshit and calling it the law?

Your flawed interpretations are not the law.

PBA, R.S.O. 1990 s. 84 among others.

Of course my flawed interpretations are no more the law than yours. But the fact that Ontario law set up a pension benefit guarantee fund to ensure pensions would be paid in spite of employer defaults is not arguable. So leave off already.

My point is that consistent sucking up to employers by not requiring premiums adequate to the funds needs should not be borne by the very people the fund was established to protect. Ontario should do what it said, in law, that it would do.

But if what you're trying to say, when you claim there's no such law, is that this weaseling is permitted, that's always been indisputable. The words of the law do allow it.

Obviously I've failed to make clear that I believe we, the people of Ontario, are obligated to do what our laws say we'll do. Since there exists no power to enforce this obligation, logic-chopping and sef-serving parsing of our undertaking harms not just a few pensioners that those of us who have no pensions, but everyone of us.

We need to do the right thing, because it is right. The right thing is to keep our word. A society that does not is on the way down, not up.

 

[fuji]

PBA, R.S.O. 1990 s. 84 among others.

Is that the one that uses the "may" terminology? You keep saying it was sold as if the taxpayer would step up and foot the bill if need be. Do you even have a quote from a politician of the day asserting that?

I agree that an insurance fund was set up but it looks like it was meant to be funded by employers and was never meant to be funded by the taxpayer.

My point is that consistent sucking up to employers by not requiring premiums adequate to the funds needs should not be borne by the very people the fund was established to protect. Ontario should do what it said, in law, that it would do.

CAW were equal players in that process and accepted the agreement. They also imposed punitive wages on the company for decades which have resulted in a pension obligation that is roughly double what it would have been with market wages.

They are plainly not blameless here.

In saying that no-one is saying that the company is blameless, the whole lot of them screwed this up, management and CAW equally.

This is a good read on the intrinsic fuckup that was GM:

http://kevincolby.com/2009/03/10/knox-machinery-letter-to-gm-a-must-read/

After reading that it's hard to come away with the opinion that ANY of these guys on either side of the bargaining table deserve one fucking cent of tax payer money.

 

[Keebler Elf]

Wow, talk about one of the worst loaded poll questions ever. Couldn't get much more biased when you're already talking about "bailing out" (pejorative) and pulling on the pursestrings.

A more legitimate question would have been, "Do you believe GM pensioners should receive the same rights to a guaranteed pension as the rest of Canadians?"

Pretty significant difference, eh?

 

[james t kirk]

The reality is simple.

We can't afford it.

The politicians will stick their moistened political fingers into the wind-storm and their action will be determined based on which way makes their finger feel cool.

 

[oldjones]

I'm not sure whether we can or not, but the absence of "you said", "No I didn't" sure is refreshing.

Isn't the question at least partly, can we afford large numbers of Canadians trying to live out their last years in unexpected poverty? That too costs us.

 

[benstt]

PBA, R.S.O. 1990 s. 84 among others.

Of course my flawed interpretations are no more the law than yours. But the fact that Ontario law set up a pension benefit guarantee fund to ensure pensions would be paid in spite of employer defaults is not arguable. So leave off already.

I was speaking to a pension consultant, and your interpretation is flawed according to them. The government set up and administered the protection fund, but have no obligations other than the value of the fund. This was not designed to be a government guarantee of private pensions, and this is well known in the pension industry. In the event of a large pension plan failure, the fund will be exhausted, and some pensioners may only get a fraction of what their plan promised.

The pensioners first line of defense is the private pension plan reserves themselves. In this case, GM underfunded the plan. Essentially, making promises but not setting aside enough money to meet the obligations.

This guy doesn't see why taxpayers should be on the hook to guarantee the private plan. Taxpayers already cover basic pension income in the cpp and oas.

They also said the medical plan was in danger in a bankruptcy.

 

[Malibook]

Of course my flawed interpretations are no more the law than yours.

But if what you're trying to say, when you claim there's no such law, is that this weaseling is permitted, that's always been indisputable.

We need to do the right thing, because it is right. The right thing is to keep our word. A society that does not is on the way down, not up.

You claimed that my claim that the government has no legal obligation was factually wrong.

The law is the law but the point you are missing is the governments' spirit of the law.
The feds have made it clear they will cover CDIC.
The province has made it clear they will not cover the pension fund and that they couldn't even if they wanted to.

Like I said, as long as they set up a similar pension for the majority of taxpayers who have none, no problem, except for our kids and their kids and their kids ..................

 

[Malibook]

Wow, talk about one of the worst loaded poll questions ever. Couldn't get much more biased when you're already talking about "bailing out" (pejorative) and pulling on the pursestrings.

A more legitimate question would have been, "Do you believe GM pensioners should receive the same rights to a guaranteed pension as the rest of Canadians?"

Pretty significant difference, eh?

The pension guarantee fund is for other pensions.
It isn't a GM thing.
The point is that GM could easily bankrupt the fund.
If this happens, nobody is saying the government should cover all pensions except GM.
They are all equally screwed, perhaps because of GM.

 

[oldjones]

Do you include ALL Canadians?...even ones that did not work for an auto maker?

Yes, absolutely.

 

[oldjones]

Is that the one that uses the "may" terminology? You keep saying it was sold as if the taxpayer would step up and foot the bill if need be. Do you even have a quote from a politician of the day asserting that? …edit…

I'd be far more interested if you could find a quote from a pol of the day saying, 'we're legislating a Pension Benefits Guarantee Fund, but put no faith in it, because it's no guarantee'. If the province wasn't behind the Fund, why were they even involved? Either to guarantee pensions, or to guarantee employers wouldn't need to fund the pensions properly, your pick. Either way, the parties didn't do it themselves, and the province claimed to guarantee? Like I said, you tell me.

My darker side can come up with all sorts of dishonourable reasons why pols and plutocrats would pretend there was a guarantee in a fund called a Guarantee Fund, when there never was. Same as the guys that paint your driveway and say they completely resurfaced it. They get to use the money for something more attractive than driveways, or pensions. Like their own paycheques.

Anyway, you're saying the Guarantee Fund was never a guarantee fund, so you find the reference. This, like arguing labour costs, is petty distraction. The guys who took the big salaries and said 'we're guaranteeing your pensions', like the guys who said 'we're building the cars of tomorrow today' talked a good line, but failed at their tasks.

Debating fine legal distinctions is for lawyers. GM's managers and their ilk, politician collaborators included—'Ontario's auto industry is the backbone of the economy and this [insert bailout or sweetheart deal name of the day] will keep it strong'—have left a mess that gets bigger every time we look, and we have to clean it up because there ain't no one else.

Taking our justifiable resentments out on a bunch of pensioners is no place to begin building a better future. Where we need to begin is by insisting promises be honestly made and honestly kept.

 

[mmmburritos]

Unless they are going to set up a pension plan for every taxpayer without one, fuck this bailout bullshit.

If they have to get by with reduced benefits, CPP, OAS, savings, investments, and part-time work, so be it.

I also think it is ridiculous that taxpayers match the pension contributions the teachers make.
If there is to be any taxpayer assistance for the autoworkers, it should be diverted from the teachers, not piled on to the already struggling taxpayers and their kid and grandkids....

Like he said...

 

[Nickelodeon]

Yes, absolutely.

Not remotely realistic in terms of where the money will come from. I'm semi-retired with no private pension and do not wish this obligation upon my kids and grand kids, on top of what our collective old age medical bills will cost us.

I'm in favour of affordable socialism.

 

[addicted2whiskey]

There's no way that taxpayer money should bail them out. They're Union is partly to blame for their unreasonable requests during negotiations. GM workers were overpaid to begin with.

 

[golffan17]

To think that not contributing to a fund from one's paycheck could sustain itself is simply idiotic.

I don't feel sorry for these people at all. If they are not mature enough, or disciplined enough to save from their overpayed paycheques, screw them..let them starve.

It is simply wrong for anyone to assume that it is like the good ol' days where you work for a company for 30 - 40 years and have your pension waiting for you when you retire. Mosy employers are doing less and less for their employees and it is becoming increasing important to contribute to RRSP's under your own control.

Actually, I take back what I said earlier. I feel sorry for the old people that retired years ago that may be affected by his, however, most people should have seen this coming. The fact that tax money is even considered to pay for people's overextended financal situation is just pain wrong.

 

[JEFF247]

No. That's what Social Security is for. If you put ALL your eggs in one basket then you get what you deserve. With the money they are paid they should have plenty of back up. Unless of course they just pissed it away on toys. And the Union bosses weren't smart enough to hedge their bets. I'm sick of the cry babies!!!!

I had a retirement plan of my own, but I blew it all on strippers and gambling. Is the government going to bail me out?

It's ridiculous this day and age, with Enron so fresh in our minds, that people don't smarten up. If you want the US gov to be your mommy and daddy then you have bigger problems.

PS I was kidding about the loss of my retirement. I will be able to visit casinos and strip clubs for as long as I last!!!

 

[good to go]

I believe that if you have not prepared properly for the future then you reap what you sow. They will probably just exhaust the 100 million then let the cards fall where they lay,what else can you do?

The taxpayers should not and cannot be a scapegoat for all of the big companies out there.Now is the time to change the laws on this pension fund.

 

[fuji]

If the province wasn't behind the Fund, why were they even involved?

My understanding, and it was my understanding at the time as well, was that this was purely a regulatory decision by the province. They decided to rejig the regulations that govern pensions to create a new regime with a different setup, but that it was still a regime under which employers paid the tab, and not one that taxpayers would EVER be responsible for.

I honestly have never, ever, ever, before you brought it up, heard this scheme as ever being one that would require taxpayers to step up, and I do remember the debates back in the day.

It was a change of regulation, not a pledge of funds, by the Ontario government. It was thought that this new different way of allowing employers to fund pensions would work better than the old way that they funded them, by allowing them to share risk among themselves.

I never, ever heard it described as a scheme under which the taxpayers were going to wind up shouldering any of the risk.

 

[Malibook]

I never, ever heard it described as a scheme under which the taxpayers were going to wind up shouldering any of the risk.

And certainly not all of the risk.

They want to privatize the good times and socialize the bad times.

When times are good, they get the gains.
When times are bad, we get the losses.

Must be nice.

 

[healer677]

This is a dumb question -but did Nortel employees get their pensions covered when the stock tanked? Did these employees who re-invested their money into the comapny get any sort of coin from the goverment?

I guess the answer to this question will determine how I feel about the GM guys.