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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (183646)	7/25/2002 10:27:45 PM
From: mishedlo	Read Replies (1) \| Respond to of 436258

I did a post on IBM's underfunded pension plan and got this as a reply. Is this true? Are companies going to just cancel pension plans and walk away? ============================================================ Is IBM a union shop? A company is only obligated to maintain a pension plan if it's in a union contract. Without a contract, a company is free to change or dump a pension plan at it's whim. In my 25 years in the workforce I've seen fully company funded defined contribution plans be replaced with 401ks with company match, then the company match eliminated. Several years ago, McDonnell Douglas (prior to being taken over by BA) decided to terminate it's retiree medical benefit for it's non-union employees. No one was grandfathered. The retirees sued contending that the medical benefit as described in the employee handbook was a contract. The court found for the company as there was no consideration given by the employees in return for the granting of the benefit. Studebaker ducked a defined benefit plan in a union shop. In 63 the company found that it's pension was grossly underfunded. Their solution was to close the South Bend plant. Somehow they worked it so that Studebaker's other operations, Worthington pump and an auto plant in Canada, could continue to operate, while the employees in South Bend were left on their own as the pension account was rapidly depleted.