Marsh Lesson for Pensioners

According to Xania News:

As a grocery chain is dismantled, investors recover their money. Worker pensions are short millions.

The unpaid pension debts mean that some retirees will get smaller checks. Much of the tab will be picked up by the government’s pension insurer, a federal agency facing its own budget shortfalls.

“They did everyone dirty,” said Kilby Baker, 70, a retired warehouse worker whose pension check was cut by about 25 percent after Marsh Supermarkets withdrew from the pension. “We all gave up wage increases so we could have a better pension. Then they just took it away from us.”

Let’s take a closer look.

When Sun bought Marsh Supermarkets, the company had three retirement plans. One for the top five Marsh executives, one for the store employees, and one for the warehouse workers.

Only the executives’ plan, however, was fully funded under the sales agreement: With the completion of Sun’s purchase, Marsh’s top five executives were to be awarded $14 million in retirement payments, according to company financial documents. Among them: CEO Don Marsh at $7 million and corporate counsel P. Lawrence Butt at $2.2 million.

Meanwhile, the other two retirement plans — the worker pensions — were short millions of dollars.

The pension for store employees — deli clerks, cashiers, store managers — was underfunded by $32 million at the time of the bankruptcy. Most of that burden will be placed on the government insurer, the Pension Benefit Guaranty Corp., which will restore virtually all of what the 4,000 store employees entitled to pensions were owed in retirement.

The pension covering the company’s warehouse workers fared worst.

At the time of the bankruptcy, Marsh Supermarkets was behind in its obligations to that pension by $55 million, and because of the way that pension is organized, the shortfall is likely to help cause significant cuts to pension checks for retirees and accelerate financial woes of the government’s pension insurer.

The pension fund for Marsh’s warehouse workers is part of a Teamsters-affiliated fund known as Central States, which covers about 400,000 people. Even before the Marsh bankruptcy, Central States was running out of money, partly because so many trucking companies have filed for bankruptcy. More than $1.5 billion of the Central States pension shortfall can be traced to bankruptcy by companies owned by private-equity firms, according to the pension fund. It is expected to be insolvent within seven years.

The 5500 filings tell a slightly different story.

Th 401(k) was liquidated in August by a bankruptcy trustee and the Defined Benefit Plan for  those 3,876 employees is 90% funded (95% if you believe in actuarial value) though there are no benefit accruals:

Plan Name: Employee Pension Plan of Marsh Supermarkets, Inc. & Subsidiaries

EIN/PN: 35-0918179/001

Total participants @ 3/31/17: 3,876 including:

  • Retirees: 1,679
  • Separated but entitled to benefits: 1,376
  • Still working: 821

Asset Value (Market) @ 4/1/16: 53,575,381

Value of liabilities using HATFA rate (6.02%) @ 4/1/16: $59,183,378 including:

  • Retirees: $35,609,885
  • Separated but entitled to benefits: $14,988,960
  • Still working: $8,584,533

Funded ratio: 90.52%

Unfunded Liabilities as of 4/1/16: $5,607,997

Asset Value (Market) as of 3/31/17: $54,966,394

Contributions : $784,797

Payouts: $3,971,825

Expenses: $924,002

33 responses to this post.

  1. Posted by El Gaupo on December 29, 2018 at 8:22 pm

    Off topic and directed at TL/Stanley.
    Did you happen to read the article on Nj com about jersey city police dept?
    In 2017, an arbitrator awarded the officers a four year deal, 0, $750, 0, $750 over the four years. $1500 total.
    Now we read that the CITY has re opened the contract!!!! With two years left!!!! They raised the starting salary by $4000 and reinstitited longevity payments for newer officers and changed some of the health care provisions. Fulop said they have hired 500 officers in the last few years. Wow!!! A city actually not even waiting to a contract expires before helping out the guys on the force. Hmm….I wonder why??? One reason. Compensation. New guys we’re leaving/ or taking the job and old guys were leaving rather than stay for the zeroes. TL, didn’t you say that hundreds are lining up to take these jobs? Or was it the standards were too high??? Nah, we are all GED heroes. Can you think of one other reason, TL, why a city would reopen a contract that by all rights was a home run for them??
    At least they did something about it, not like Camden County PD who needs to prove a point no matter how many leave the force. Seriously, TL, Stanley etc. why on earth would jersey city reopen a contract like that, corruption???? Nah, they just were handed a awesome(from the city POV) contract just two years earlier. So…hmmmm what could it be???

    Reply

    • Posted by Tough Love on December 29, 2018 at 9:05 pm

      Quoting …………..

      ” Can you think of one other reason, TL, why a city would reopen a contract that by all rights was a home run for them??”

      Yes I can………….

      The “Total Compensation” (wage + pensions + benefits) of NJ Police is ludicrously excessive MUST come down, WAY down. But yes, it’s very hard for one town to do so while others do not. What’s needed is a statewide citizen uprising ….that they’ve had enough of this decades-long financial rape of it’s citizenry.

      If ALL of the towns did a full-reset, there would be no place for those Officers to go. Sure they could go to NYC …. and perhaps actually have to do real Police work.

      Reply

      • Posted by El Gaupo on December 29, 2018 at 9:41 pm

        Lol. Like JC is a picnic. You have nothing on this one. Other towns surely are free to draw a hard line and many have. Some are paying for it with retention issues. Face it….ya got nothing with this one. You should go on Fox News with the way you spin things. I have NEVER in 23 years heard of a town for all intents and purposes getting everything, and I mean everything, they wanted from an arbitrator, then open up an existing contract 15 months after the decision!!! Wow!!! They really must’ve had problems to not even wait the 2 more years!!!! You’re on the wrong side of this particular argument and you know it. Candidly, since Christie first couple years, the drumbeat you used to hear has been muted. The statewide citizen uprising peaked in 2011. And obviously JCPD total compensation isn’t enough to retain good officers. Hence the opening of a contract to give more. That has to kill you. Flies in the face of everything you preach. I’ve NEVER seen that. New hires making $37000 for 3 years. No wonder!!
        Part of may be millennials who can’t be bothered with putting their smartphones down to actually put in the effort. I don’t know.

        Reply

        • Posted by El Gaupo on December 29, 2018 at 9:48 pm

          “What is needed is a full reset….this way the officers would have nowhere to go”
          Wrong again TL.
          JC was having problems keeping older guys and newer guys. Middle career guys of course would stay. They would be bottom of pay scale if they transferred and would have to much time in the pension fund to quit. BUT…. older guys have been pushed out to make room for cheaper officers. These cheaper officers are not staying though. Combine that with your DC type retirement plan and what on earth would keep an officer in the profession if the pay still sucked?? You truly have no answer for that. These cities can’t keep folks now (pay issues, not pension). But if you change the pension to DC, who would put up with the nonsense for $37000 while trying to save for a $500000 3 bedroom split level in a suburban community.

          Reply

          • Posted by Tough Love on December 29, 2018 at 10:17 pm

            Quoting ……………

            ” Combine that with your DC type retirement plan and what on earth would keep an officer in the profession if the pay still sucked?? ”

            If the current ludicrously excessive DB pension was replace with a DC Plan COMPARABLE to what Private Sector workers typically get, we could probably have STARTING wages of $75K.

          • Posted by Tough Love on December 29, 2018 at 10:20 pm

            And RIGHT NOW, the BIGGEST “suckers” in the room are the new cops…….. with ALL of their contributions simply going to funds the pensions of the older/long-service “moochers” ………. assuredly leaving NOTHING for THEM.

            What a bunch of fools.

          • Posted by El Gaupo on December 29, 2018 at 11:54 pm

            I don’t know if i would go so far as to call them suckers….but yes. You do have a point. There is without a doubt a large divide between the guys hired prior to say 2005 or so and the guys hired in the last 5 years.
            And yes. If you started at $75000 you could probably get away with a DC plan(if it was really good). Problem is the 2% cap is going to put a downward pressure on salaries over the long haul. And don’t forget, they will be on average staying many more years than now, and many will leave at different times as there would be no ball and chain if you will of a pension to stick around for. Likewise the first time they got sued/hurt etc they would leave. Why do this job for $125000 when you be a plumber for $115000 or more and not worry about all the nonsense that comes being a cop.
            Either way, we both agree that my generation of cops will be the last to have free medical and $120,000 pensions. Glad I’m almost done. TTFN. Ta ya for now.

          • Posted by Tough Love on December 30, 2018 at 12:15 am

            El gaupo, I wasn’t kidding when I stated (above) that we could likley pay Police a starting wage of $75K annually if they ONLY got a DC Plan Comparable to those typically granted Private Sector workers (NOT a “really good one” as you stated …. whatever silly WAY-BETTER-THAN PRIVATE-SECTOR %s you had in mind).

            Tell me, what education, experience, skills, and/or knowledge does a new Police Officer possess to earn anywhere near a beginning wage of $75K in the Private Sector ?

            I think many would be tickled-pink to start at $75K with a 3% DC taxpayer “match” (just like WE typically get from our employers).
            ——————————————

            And if you think running a “business” like plumbing (with all it’s headaches) be my guest. You’ve had such a lucrative yet pussy-easy job for so long you think everyone has it so easy.

          • Posted by El Gaupo on December 30, 2018 at 10:54 am

            Haha. You are really crazy!!! A pussy job??? You’re nite. Why do you seem to think that public employees are somehow predestined to do this job from middle school or something? When you have recruitment issues now, what makes you think college freshman will major in criminal justice and pursue law enforcement As a career aspiration? And as you know many cops already have side gigs like that. One of my supervisors owns a landscaping business that he started summers in college with two
            Other guys. They stopped he didn’t. Make more money doing that than he does as a cop. Another started his own DJ business and another is a plumber. Me? I should’ve laid more attention to my electrician father, but I went the crash investigation route. You are soo thick and borderline delusional. Some folks can’t run a business and some folks wash out of the police academy or screw up after. At least a third of cops also have their own business. Next you will be telling me that it is cause policing is so fucking easy and that’s why they do it. Not cause they work hard. You are a fool if you think that the same amount of folks will make a career out of this job w $75K and NO pension. Will you at least give them Ss back? Take a look in the mirror. You’ve been drinking the public sector folks suck kool aid. Lol. The stats don’t back you up now with the givebacks. We all make choices TL. We are not predestined to be a cop from birth. I never was one of those as a little kid who wanted to be a cop. Figured it out late high school early college years in fact. For someone so “informed” you really come across as desperate at times. If I’m on the wrong side of on argument I can admit that. You can’t. Stats don’t back you on this. Starting w teachers and cops in poorer cities. Better paying jobs will always attract the better applicants. You truly have no idea what you’re talking about sometimes. Never said running a business wasn’t a headache. You seem to think that my job is all peaches and cream. Try it some time before you cast stones all the time. I’m sure with no academy training, years of experience you can hop right in. Do it well and make me eat my words. Hell, I’ll even let you run the first fatal accident scene. Let’s see how you do. Jealous. That’s all it is. Thick headed woman TL. For real.

          • Haha. You are really crazy!!! A pussy job???
            Unskilled/Semi-Skilled. Not p*^#y.

    • Posted by stanley on December 30, 2018 at 10:46 am

      “Now we read that the CITY has re opened the contract!!!! With two years left!!!! They raised the starting salary by $4000 and reinstitited longevity payments for newer officers and changed some of the health care provisions…”

      Constable, the economy is in transition. You can’t generalize much from what is happening now. A mediocre pay rate today might turn into a very handsome rate by next year. And bills of goods may turn out to be rather empty in the not so distant future. Promises to pay need to be taken with a grain of salt. Reality can be a very strict disciplinarian.

      Reply

      • Posted by El Gaupo on December 30, 2018 at 11:13 am

        Stanley. Since 1995, my first year we have seen several boom and bust cycles. Never have I seen a contract opened like that. The city got everything they wanted!!! Why, my friend, would they reopen it??
        Because for the first time since I’ve Ben hired, the scales tipped to far in favor of the employer and officers responded by transferring or potential officers didn’t apply. No other reason. Nothing to do with the economy at this point. The last time this happened was in the 70s, the cities got to cure and cops left the force. The state initiated binding arbitration as a result soncops would be paid fairly.

        Mr. Bury, everyone in here respects your opinion (and hopefully each other, but sometimes I don’t know) and you have lives in NJ for some time and all fairly active in county politics(at least you know what is going on). I assume you are familiar with binding arbitration laws that Christie set up. I ask you, sir, if you had to give a reason for Jersey City reopening an existing contract, one that they truly won in arbitration, what would that reason be? Sorry to bother you with this nonsense, but it appears we need an unbiased opinion.

        Reply

        • Posted by El Gaupo on December 30, 2018 at 11:15 am

          Sorry for the typos….you guys get the jist of it.

          Reply

        • Posted by stanley on December 30, 2018 at 5:25 pm

          Sorry to rain on your party, Constable, but the good times of NYC and northern NJ are drawing to a close. The financial markets have become extremely over valued and will be heading south (possibly a crash) in short order. NJ has pharma business and with all of the elderly the outlook should be good. Nonetheless, I wouldn’t bet the farm on it. My own opinion is that most folks unless they are battling some specific illness don’t need much in the way of pharma. What they really need is a good diet and a serious exercise/fitness routine. Their bodies will take care of themselves. And, government budgets are very stretched. They could easily step in with price controls. (I wouldn’t favor that, but it wouldn’t surprise me).

          In addition to the above, there are many retirees with a one legged retirement stool–the pension from work. More has been promised than can be paid. Adjustments are on the way, and some will choose to rejoin the active duty labor force. Old age? I see very fit older men out mountain hiking. Look at Tom Brady. In his 40s, he’s still playing first string NFL football for a championship team. Retired or not, it’s crazy to be run down and worn out at 60 or so. We are not wealthy enough to have half the country on extended holiday routine. Some will be going back to work.

          The big fat contracts at JC won’t last, IMO. Christie will be back to shape you boys up and pare salaries and benefits to affordable levels.

          Reply

          • Posted by El Gaupo on December 30, 2018 at 5:44 pm

            Wow. Talk about going off on a tangent. Lol. I don’t plan on sitting around while the old lady works when I retire. That is the ticket to what you describe as being washed up at 60. I’ll still work for sure.
            Again though, to say the economy being in flux is the reason why JC (who had the union by the balls) injtiated opening a contract w 2 years doesn’t really make sense. And believe me, this state is done with the fat man. Lowest approval rating since Colonail Gov William Franklin. That’s what happens when ya shut bridges and state parks.

          • Posted by Tough Love on December 31, 2018 at 12:10 am

            El gaupo,

            The real shame is that you don’t HAVE to work until 65 before your can begin collecting your pension (just like the vast majority of the Private Sector Taxpayers funding your pension) ……….You’re a loud-mouth “big shot”, but ON THE BACKS of your town taxpayers.

            Few love you. They just know it’s unwise to confront you for this outrage. But as costs rise even further, that too will likely change.

          • Posted by El Gaupo on December 31, 2018 at 3:42 am

            Lol. Such class, TL/Rex. I’ll add loud mouth big shot that few love to my list along with lowlife, moocher, epitome of greed, etc. it’s all good. Maybe your bi polar? You say it’s not me personally, you have no reason to doubt that I’m a hard worker/good officer but yet you routinely insult me.
            Look, most folks are decent people who do in fact support law enforcement. At least where I live. I would say more than a few are fine with the police. Of course, they may bristle at the pension etc. , but very very few make it their crusade in life. “Big shot loud mouth that few love”. You sound like you’ve had to much to
            drink. You can most assuredly apply those same 7 words to yourself. Can’t even debate an issue with you(jersey city, or try Clifton) without you getting sooo defensive. You’re an idiot sometimes, you know that?

          • Posted by Tough Love on December 31, 2018 at 3:57 am

            El gaupo,

            Listen to yourself, and go back and read some of YOUR comments. You are INDEED a “loud-mouth” big shot.

          • Posted by El Gaupo on December 31, 2018 at 6:14 am

            And you have issues admiting that you may be the slightest bit wrong about any issue, too much pride, and you have an absolute obsession with my occupation in general and my salary and benefits in particular. Well beyond anything I’ve ever seen….combine that with “never being able to be the slightest bit wrong” and you have yourself one whopper of a personality.

          • Posted by stanley on December 31, 2018 at 10:13 am

            ” Talk about going off on a tangent.”

            I don’t believe that it’s off on a tangent. The tight labor market is due to so many off on early retirement (largely), a retirement that many could not afford based on their own savings and investments and a REASONABLE pension from previous employers.

            The junior policemen in northern NJ might well merit higher pay. Probably some should be shifted from your envelope to theirs and the overtime should be allocated to the lowest salary personnel ahead of you fat cats. When you boys are down on the ground kicking and moaning, Christie will be back whacking pensions and eating pizza while you guys are doing without.

          • Posted by Tough Love on December 31, 2018 at 5:07 pm

            Quoting El gaupo ……………

            ” ………. and you have an absolute obsession with my occupation in general and my salary and benefits in particular. Well beyond anything I’ve ever seen….”

            Perhaps that’s BECUASE I’m MUCH more informed than most, and understand (to a far greater degree) the magnitude of the Financial Ripoff of NJ’s citizenry from Police pensions, benefits, and ridiculous “perks”.
            ——————————-

            I typically get an unwelcome reminder several times a day, ………… as I drive by Police cars stationed at local utility work, with VERY little traffic and the Police Officer rarely out of his/her car, and usually staring at his/her cell phone.

            The Officer is collecting a ridiculous $1,000/day for doing next to NOTHING. It doesn’t matter that the Utility Co. reimburses the town as we (NJ’s Citizenry) sill pay that $1,000/day via inflated Utility bills.

            And don’t give me this BS that is BECUASE it’s in the Utility worker contracts. The Towns don’t have to abide by unnecessary and VERY costly provisions of 3-rd-party contracts. Our Elected Officials “look the other way” and do so because it (a) doesn’t directly cost the town Gov’t anything and (b) as with all other decisions, doing things that please the Police gets them re-election support and campaign contributions.

            It’s just another element of the you-scratch-my-back-and I’ll-scratch-yours Union/Politician collusion.

          • Posted by El Gaupo on December 31, 2018 at 6:42 pm

            You’re right. Give me your address….I’ll mail ya a check for the utility jobs I’ve done. Haha.
            Btw…town can’t do anything about it. Not that they want to. Big bucks for them. Pseg will tell them they won’t come into town to do work then And town has no authority to stop emergency work by the utility. Police protection is required, the town really has no choice. And they don’t care because they make dough on every hour I work. Keep complaining though. It’ll get ya where you wanna be. You should run for office or move if you hate having to pay me. That’s the difference. I could give a fuck what you do for a living. And I could also give a fuck what you THINK about my pension and bennies. You’ve proven to just be a hater. Rarely anything nice to say on this blog. Collusion? Yea right. You must really have been screwed over by a cop. Pathetic woman. Haha. No self confidence whatsoever.

          • Posted by El Gaupo on December 31, 2018 at 6:47 pm

            I’ll give you a break TL. This loud mouth is signing off for a while again. Like my pal Earth and MJ have. You bring out bad qualities in people and I’ve tired of the back and forth nonsense, because you can’t intelligently debate a topic. Hope you have a wonderful New Year and keep paying your taxes please. I’m retiring soon and want to go on a nice cruise.

          • Posted by Tough Love on December 31, 2018 at 7:09 pm

            Quoting El gaupoi …………

            ” I could give a fuck what you do for a living. And I could also give a fuck what you THINK about my pension and bennies.”

            LOL, like I stated above ………………. “You are INDEED a “loud-mouth” big shot.”

          • Lol. Such class, TL/Rex. I’ll add loud mouth big shot that few love to my list along with lowlife, moocher, epitome of greed, etc. it’s all good. Maybe your bi polar? You say it’s not me personally, you have no reason to doubt that I’m a hard worker/good officer but yet you routinely insult me.
            El Guapo, I have never said anything about you “personally”. I have said you have an unskilled/semi-skilled, GED job that 90% of America could do- if given the chance. Same with Firewhiner. Government jobs today are compensated at multiples of anywhere from 2-30 times their fair market value. And hiring is based on: 1) Nepotism; 2) cronyism; 3; Affirmative Action; 4) military hires (far in excess of their small 5 point Veterans advantage).

            I have actually come to like you, talk about the stars aligning!

      • Posted by El Gaupo on December 30, 2018 at 11:19 am

        And the reason isn’t they got more givebacks, the cops made out better now then w the arbitration decision.

        Reply

    • Nah, we are all GED heroes.
      🙂

      Reply

  2. So, which public employee pension funds invested with those private equity parasites?

    Pension plans are supposed to be pre-funded, and neither underfunded nor retroactively enriched. It shouldn’t matter if the company goes bankrupt.

    Bad timing? We are near the peak of an “everything bubble.” It can’t get any better than this for asset holders, and will probably be worse for a long time. So if there isn’t OVER funding now, there was malfeasance.

    Reply

  3. Posted by S Moderation Douglas on January 1, 2019 at 12:00 am

    Learn from yesterday, live for today, hope for tomorrow. 

    Albert Einstein

    HAPPY NEW YEAR

    Reply

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