coco ebert: But the Pension Benefit Guaranty Corporation, a federal agency responsible for protecting workers' pension benefits, yesterday said the real reason for Sun Capital's bankruptcy filing was to use the reorganization process to abandon the pension plan, while retaining ownership of Friendly's.

This is why we need government.

this is why we need guillotines.

downstairs: TFA: Under this proposal, nearly all of Friendly's assets would be sold to an affiliate of Sun Capital, which would not assume the company's liabilities, including the pension plan. The pension liabilities would remain with the old Friendly's, which would be left with few or no assets.


Yeah, no. I don't think you can do it that way.

I'm a business owner myself. I'd love to dump all of our debt by essentially setting up an affiliate to run the business and leave the old one behind with the debt. But I wouldn't do that. Because its, you know, fraud.

Eh? Nothing wrong with sort of agreement. It happens all the time.

downstairs: Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options (which inherently carry risk, and everyone knows it.)

Then figure out your own investment plan for retirement on said salary.

There are two sorts of pensions:

Defined Benefit.
Defined Contribution.

I'm too lazy to bother to describe them but just look them up.

All the Friendly's near my house and my parent's are closed, yet Denny's and IHOP are still around.

/no justice

Bukharin: this is why we need guillotines.

Drag them from their homes and provide them justice via peoples tribunals first. Then whatever horrifying end is most economical and practical.

downstairs: Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options (which inherently carry risk, and everyone knows it.)

Then figure out your own investment plan for retirement on said salary.

Wow, just wow. See, participation in pensions was and is an enticement, a contractual offer, to sweeten the prospect of employment. As the market for employees becomes more liberal, with international competition and high unemployment, less and less will be offered, right down to lifetime enslavement, if legal and social standards are not observed and maintained. So you might get your 'wish'. Which is really grotesque, if you need to be told.

You are free to not participate. You are free to not believe in their utility. Proscribing what anyone else should believe or expect is ignorant and arrogant.

/Whoops?

I guess Friendly's employees aren't getting their.........Happy Ending.

Fark Friendly's. Newport Creamery FTW.

/At the sign of the golden cow, biatches.

Why shouldn't they drop their pensions? That's the best way to cut unnecessary expenditures. And, I mean, profits trump all.

This is obviously why we should continue our employer-based healthcare system.

downstairs: I'm a business owner myself. I'd love to dump all of our debt by essentially setting up an affiliate to run the business and leave the old one behind with the debt. But I wouldn't do that. Because its, you know, fraud.

Fraud is acceptable if you run a large company.

Shazam999: downstairs: Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options (which inherently carry risk, and everyone knows it.)

Then figure out your own investment plan for retirement on said salary.

There are two sorts of pensions:

Defined Benefit.
Defined Contribution.

I'm too lazy to bother to describe them but just look them up.

Never seen a "defined contribution" pension. Pensions are generally owned by companies and count as future liabilities. Defined contribution plans (at least in the US) aren't pensions, they are assets owned by the individual and portable through IRA rollovers. Pensions are definitely not portable, which is one of the huge flaws.

In my opinion, pensions today are bad news. Of course, I'd also rather dispense with 401(k)s, since they all rely on third parties to administer them. 401(k)s are mostly a windfall for the administrating companies. I'd rather have it all available to invest on my own. The only thing that makes it worthwhile is if the company has a 100% match, in which case I put in the max match and pull it all out again at the end of the year. I take a 40% hit (taxes + penalty) on the total but have 20% more than I would have had to invest on my own otherwise, and I can double that total investment capital in five years regardless of how the overall market is going.

Hey, I'm all for eliminating private pensions AND private insurance, but that's "zomg sozializm" or something.

Of course, when people continue to lose their retirement, perhaps it IS time to go to a new system.

I know the pension plan where I work is a big factor in keeping me there. Its rare these days, and I consider it a pretty awesome safety net for when my 401k inevitably tanks 3 years from retirement.

"Friendly's told not to dump employee's pensions. In other news, Friendly's employees have pensions"

Actually, Subby, according to your headline it appears a single Friendly's employee has multiple pensions.

/ first job was at Friendly (back then, it was Friendly, NOT Friendly's...yeah, I'm an old fart)

This can't be right. No business would act that way! After all (all together now) a Contract is a Contract.

downstairs: TFA: Under this proposal, nearly all of Friendly's assets would be sold to an affiliate of Sun Capital, which would not assume the company's liabilities, including the pension plan. The pension liabilities would remain with the old Friendly's, which would be left with few or no assets.


Yeah, no. I don't think you can do it that way.

I'm a business owner myself. I'd love to dump all of our debt by essentially setting up an affiliate to run the business and leave the old one behind with the debt. But I wouldn't do that. Because its, you know, fraud.

No, that's old Commie doublethink. Realfacts of the Corporatist age dictate companies, if they're big enough, can do whatever they want or socialism.

phedex: I know the pension plan where I work is a big factor in keeping me there. Its rare these days, and I consider it a pretty awesome safety net for when my 401k inevitably tanks 3 years from retirement.

Except that "your" pension provides less security than your 401k.

Just consider those Friendly's retirees, or the GM retirees, or any of hundreds of other corporate retirees who have lost their pensions over the past 50 years.

A pension fund is a corporate asset, while a 401k is an employee's asset (deferred compensation, actually).

Do you trust your company with your future? Do you really think they'll invest it more wisely that you'd invest your 401k (or are you so naive to think it's not heavily leveraged and invested)?

loser0: This can't be right. No business would act that way! After all (all together now) a Contract is a Contract.

Contracts only apply to the bottom. The 1%'s and corporations can default on contracts whenever they want. Regular worker bee? It's morally wrong to walk away from your mortgage contract.

Double-standards to protect the job creators from the contracts they enter into willingly! Or socialism will ravage the USA! Yeah, something like that.

Hey, look. It turns out that it's the government's fault that thousands of companies have dumped their pensions in the past few decades.

Most of us probably thought that pensions can never be "dumped." When people are hired, they are told that their pension is guaranteed for life (once they've worked at the company long enough to be vested). Well, that's not completely true. If a company is in bankruptcy or severe financial trouble, pensions law allows it to officially shut down its pension plan, and cease putting money aside to cover future payouts. A government agency called the Pension Benefit Guaranty Corporation steps in to pick up most - but not all - of the pension payments. That is "pension dumping."

Since 1974, nearly 3,600 companies have dumped their pension plans in this way. It's becoming a worse problem because more and more companies are facing deep financial difficulty. Of course this is particularly true in the current economic environment, but even in boom times, the kinds of companies most likely to have pension plans - big, older industrial companies - are also the most likely to be in shaky financial shape.

Link (new window)

I know, let's protest.... Wall Street.

Because Washington bears none of the blame!

BolloxReader: Shazam999: downstairs: Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options (which inherently carry risk, and everyone knows it.)

Then figure out your own investment plan for retirement on said salary.

There are two sorts of pensions:

Defined Benefit.
Defined Contribution.

I'm too lazy to bother to describe them but just look them up.

Never seen a "defined contribution" pension. Pensions are generally owned by companies and count as future liabilities. Defined contribution plans (at least in the US) aren't pensions, they are assets owned by the individual and portable through IRA rollovers. Pensions are definitely not portable, which is one of the huge flaws.

In my opinion, pensions today are bad news. Of course, I'd also rather dispense with 401(k)s, since they all rely on third parties to administer them. 401(k)s are mostly a windfall for the administrating companies. I'd rather have it all available to invest on my own. The only thing that makes it worthwhile is if the company has a 100% match, in which case I put in the max match and pull it all out again at the end of the year. I take a 40% hit (taxes + penalty) on the total but have 20% more than I would have had to invest on my own otherwise, and I can double that total investment capital in five years regardless of how the overall market is going.

Jesus, you're on the farking internet, type in "defined contribution pension" and see if you get more than zero hits, eh?

10 U.S.C. 311: Except that "your" pension provides less security than your 401k.

Pensions are insured, unlike your 401k plan.

The Pension Benefit Guarantee Corporation that insures Friendlys pension is the one suing.

If they lose, the PBGC will be paying the pensions.

If the PBGC runs out of money, Congress, realizing that most people collecting pensions are old and vote, will utilize tax payer money to bail them out.

There is a good chance, that the hedge fund that provided the cash to buyout Friendlys will succeed in moving the liabilities of the company on the tax payers.

Capitalism at its finest.

Urmuf Hamer: You are free to not participate. You are free to not believe in their utility. Proscribing what anyone else should believe or expect is ignorant and arrogant.

You're entirely correct with the following proviso: companies have been just terrible about risk disclosure when it comes to defined benefit pensions. They just said (and a few say), "Whee! Stick around for 30 years and you're set for life!" And that's just not true. They don't tell you that if people buy the competitor's tractors/cars/ice cream that the pensions won't be there. They don't tell you that the tax code has a significant incentive for underfunding pensions and a significant penalty for overfunding them. They don't tell you that the board could pay a $50/dollar a share dividend and wreck the company's balance sheet and they could do it the day after you're hired, the day before you retire or any day in between.

Companies should be required to make a risk disclosure about future prospects of the company, of underfunding, of the possibility of an LBO or other event increasing the financial risks of the company, of the possibility of layoffs, etc. THEN let the prospective employees decide what a promise that won't have to be fulfilled for 30 years and then will continue for another 30 or more is worth something and has a ton of barriers between now and then is worth.

thismomentinblackhistory: ptr2void: "Friendly's told not to dump employee's pensions. In other news, Friendly's employees have pensions"

Actually, Subby, according to your headline it appears a single Friendly's employee has multiple pensions.

/ first job was at Friendly (back then, it was Friendly, NOT Friendly's...yeah, I'm an old fart)

So was my first job. Loved it.

Me too - 5 of the best summers of my life. Fun times on the cape with Irish chicks working in the US for the summer

weave: downstairs: Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options

Sure, why not. And then eliminate the overtime bullshiat of the 40 hour work week. If people want to work 60-70 hours a week, why stop them? And while we're at it, get rid of minimum wage. Unemployment is always above 0% so since there is always more supply than demand for labor that will naturally push hourly wages down to a buck or two (or less) an hour. And when people don't want to work because they can make more on welfare, we can fix that by getting rid of it.

Finally, the old days of not letting healthy young children under 16 work and pull their weight is behind us too. Let's get rid of anti-business child labor laws. Since their parents are now only making a dollar an hour, I think it's appropriate for their children to help out family finances.

You forgot something. Since those children can't pull an Adults weight in work, they should get 50 cents an hour.

/Wasn't this Mitt Romney's biz before becoming Governor?

Shazam999: BolloxReader: Shazam999: downstairs: Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options (which inherently carry risk, and everyone knows it.)

Then figure out your own investment plan for retirement on said salary.

There are two sorts of pensions:

Defined Benefit.
Defined Contribution.

I'm too lazy to bother to describe them but just look them up.

Never seen a "defined contribution" pension. Pensions are generally owned by companies and count as future liabilities. Defined contribution plans (at least in the US) aren't pensions, they are assets owned by the individual and portable through IRA rollovers. Pensions are definitely not portable, which is one of the huge flaws.

In my opinion, pensions today are bad news. Of course, I'd also rather dispense with 401(k)s, since they all rely on third parties to administer them. 401(k)s are mostly a windfall for the administrating companies. I'd rather have it all available to invest on my own. The only thing that makes it worthwhile is if the company has a 100% match, in which case I put in the max match and pull it all out again at the end of the year. I take a 40% hit (taxes + penalty) on the total but have 20% more than I would have had to invest on my own otherwise, and I can double that total investment capital in five years regardless of how the overall market is going.

Jesus, you're on the farking internet, type in "defined contribution pension" and see if you get more than zero hits, eh?

Actually, I looked it up to refresh my understanding. There may be some oddball plans out there, but "defined contribution plans" in the US tend to be employee-owned and not pensions. This is from the first hit on the term "defined contribution pension," courtesy Wikipedia:

Examples of defined contribution plans in the USA include Individual Retirement Accounts (IRAs) and 401(k) plans. In such plans, the employee is responsible, to one degree or another, for selecting the types of investments toward which the funds in the retirement plan are allocated. This may range from choosing one of a small number of pre-determined mutual funds to selecting individual stocks or other securities. Most self-directed retirement plans are characterized by certain tax advantages, and some provide for a portion of the employee's contributions to be matched by the employer. In exchange, the funds in such plans may not be withdrawn by the investor prior to reaching a certain age-typically the year the employee reaches 59.5 years old-(with a small number of exceptions) without incurring a substantial penalty.

In the United States, the legal definition of a defined contribution plan is a plan providing for an individual account for each participant, and for benefits based solely on the amount contributed to the account, plus or minus income, gains, expenses and losses allocated to the account (see 26 U.S.C. § 414(i)).


Note the lack of the term "pension" in any of this. I know that there are variable pensions out there, but they are not called "defined contribution pensions." Defined contribution retirement plans in the US have certain characteristics, one of which is that the assets are not owned by the company. Hence, they are not "pensions," which are owned by the employer and future claims against which are liabilities that can be discharged in bankruptcy.

Of course, the ultimate authority on this in the US is the US Department of Labor (new window). To be considered a pension as I've heard it used in the financial world, it needs to be protected by the Pension Benefit Guaranty Corporation, which only covers defined benefits plans as discussed in the first full paragraph.

Now, if you are using some other definition of "pension" or are talking about outside of the US then I will be more than willing to cede that there are defined contribution pensions out there. However, from the perspective of stable retirement income there is a huge difference between a defined benefits and defined contributions plan.

downstairs:
Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options

weave:
Sure, why not.

Exactly. What should be done is what most companies with any brains do - let the employees take the amount they would get as part of that "company pension" and put it into an automatic-withdrawal 401K or other retirement fund. That way, they know exactly what they're getting as they go, and don't have to rely on a company-centered pension that could be destroyed by any of a number of things - like actual bankruptcy. If someone does want to tie their nest egg to that company's success, then they can buy stock (usually at a discount).

This way, the company doesn't have to manage a whole separate "retirement department," and the actual working employees don't have to support a mostly-useless group of people who do nothing but manage those retirement accounts. By getting a huge pool of people to buy things like 401K or other individual accounts, you also don't have cases like the Friendly's one, or others where pension funds collapse because someone with minimal skills was trying to manage it - and failed. While the big funds can lose money some years, they tend to be a lot more stable in the long run.

I'm surprised Friendly's is still around now. In the 90s I worked at a Friendly's just to get some experience waiting tables. The restaurant was run poorly and the manager was eventually fired for embezzlement. The manager who replaced him was a back-talking slave driver who I quit on to go work for Ground Round, which definitely went out of business. But the Ground Round was actually a great restaurant chain, too bad it went bankrupt.

I'm set to lose a couple grand if this happens. But I'm actually more upset at not having anywhere to go and get ice cream when dairy queen is closed for the season.

ilikeracecars: I'm set to lose a couple grand if this happens. But I'm actually more upset at not having anywhere to go and get ice cream when dairy queen is closed for the season.

Sure hope you have a backup plan for retirement, and/or like Fancy Feast.

cirby: downstairs:
Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options

weave:
Sure, why not.

Exactly. What should be done is what most companies with any brains do - let the employees take the amount they would get as part of that "company pension" and put it into an automatic-withdrawal 401K or other retirement fund. That way, they know exactly what they're getting as they go, and don't have to rely on a company-centered pension that could be destroyed by any of a number of things - like actual bankruptcy. If someone does want to tie their nest egg to that company's success, then they can buy stock (usually at a discount).

This way, the company doesn't have to manage a whole separate "retirement department," and the actual working employees don't have to support a mostly-useless group of people who do nothing but manage those retirement accounts. By getting a huge pool of people to buy things like 401K or other individual accounts, you also don't have cases like the Friendly's one, or others where pension funds collapse because someone with minimal skills was trying to manage it - and failed. While the big funds can lose money some years, they tend to be a lot more stable in the long run.

The issue is that too many people are stupid and would either raid their 401K or somehow get their hands on it and not save anything. While I would strongly consider taking cash or a mass dump into my 401K in exchange for my pension there is a risk. A pension is guaranteed income and unlike a 401K or other account there is no bottom, the downside is that it is fixed and normally not COLA or inflation adjusted. I prefer balanced and diversified saving for retirement; 401K, IRA, Roth IRA, and a pension. Now for companies it is generally more expensive for a 401K since it is up front, whereas a pension can be paid later, the downside to them is that they are on the hook long term.

The government picks up pensions that companies can't pay normally drastically reducing payments in the process. There is now regulation that states pension funds have to be funded to a specific level and that has to be communicated to any employees. Because they are open ended and typically heavily invested there is variability. I think the currently funding level is 85%. We don't need more government we need better regulations to protect the people. 1) Funding should be at least 90%. 2) When a company goes in bankruptcy then the pension is in line before investors. 3) If a subsidiary declares bankruptcy any owning company should be liable to repay any profits they received from the subsidiary in order to pay off debts.

I'd like to think 401k's could be brought up to date with their new role as the primary retirement benefit, rather than what was once just an executive perk.

There should be a federal mandate for offering a plan and for matching funds, with near-instant vesting of those plans.

Pensions used to incentivize loyalty between the company and the employee, but since that has gone out the window, the freedom to jump from job to job without impacting retirement savings should be established.

FTFA: One of the company's founders, Prestley Blake, who started the company with his brother in 1935, expressed concern about the issue, according to his attorney, James C. Donnelly.

"He's very sad to see this news. He has always cared very deeply about employees," Donnelly said. "To this day, many retired employees are close personal friends."

This Blake relic sounds like dead-weight. He must be their mascot. It's been a long time since any CEO/CFO, retired or otherwise referred to employees as any different than a box of fluorescent light bulbs. The modern captain of industry knows that employees are different and "getting to know" employees is a pointless endeavor. Might as well spend time "getting to know" the office copier paper or the pencils.

Regardless of other pros and cons or different retirement plan types, this behavior by Friendly's is exactly why self-controlled plans are the only ones that make sense.

401k/403b/IRA/etc type plans are preferrable. Whether self funded, matching or company paid into doesnt matter, the fact that they are legally the employees property and he can take them with him prevent this kind of BS.

Im stunned that old-style pensions still exist in 2011. Hell, if I was a union leader, I would be demanding that all company pensions be rolled into self-controlled accounts.

Then again, that might explain why Im not a union leader.

downstairs: Although I will say this- I think the era of pensions needs to go. I completely on board with people that expected such a thing 20-30 years ago getting them now as they retire. But new workers shouldn't expect anything but a salary and maybe stock or options (which inherently carry risk, and everyone knows it.)

Then figure out your own investment plan for retirement on said salary.

I'm fine with that so long as you, as a business owner, know that I as the employee will walk out the door as soon as the next highest bidder for my labor comes along.

You want my loyalty? You earn it.

/four jobs in six years
//hooray for a mercenary labor class

enry: All the Friendly's near my house and my parent's are closed, yet Denny's and IHOP are still around.

When is the last time you actually ate at a Friendly's? At least you can get out of Denny's or IHOP for under $12 a person.

I love Friendly's, but the prices are seriously out of whack for what is essentially diner food with a great ice cream selection.

rumpelstiltskin: Friendly's is shiat. I thought I could at least get a decent milkshake there, but it sucked. fark Friendly's. I have to be in the northeast again next week. Does anyone know where I can get a decent milkshake in Connecticut? Because Friendly's sucks.

You sound fat.