GE Freeze Warning

With a Defined Benefit plan that is over 100% funded why did General Electric (GE) announce that it was:

  1. Freezing the U.S. GE Pension Plan for approximately 20,000 employees with salaried benefits, and U.S. Supplementary Pension benefits for approximately 700 employees.
  2. Pre-funding approximately $4-5 billion of estimated minimum ERISA funding requirements for 2021 and 2022.
  3. Offering a limited time lump-sum payment option to ~100,000 eligible former employees who have not started their monthly U.S. GE Pension Plan payments?

Part of the answer is in the SB Actuarial Certification forms for the last 10 years which show:

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NJ Politician Crisis

With politicians in Kentucky, Illinois, and Connecticut taking some action on public pensions, why are New Jersey’s so supine? From this week’s State of Affairs:
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Senators Steven V. Oroho (R) and Paul A. Sarlo (D) and both dangerously wrong.

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Funded Status of Local Pensions per CSLGE – 2018

Based on an analysis of 190 major pension plans (114 state and 76 local) that represent over 95 percent of total U.S. state and local pension assets and membership, the Center for State and Local Government Excellence (CSLGE) released a brief concluding:

Fundamentally, the path of the funded ratio for public plans depends upon the growth of actuarial assets relative to the growth of actuarial liabilities. Liability growth slowed dramatically from 2001 to 2018, but still exceeded asset growth over the period – driving down the funded ratio from 103 percent in 2001 to 73 percent in 2018. While more stringent funding methods would have modestly improved the trajectory of plan assets from 2001 to 2018, significant change requires also using a lower assumed return.

Nothing alarming here (though significantly less upbeat than the last update) but that might have more to do with CSLGE’s funding than those of the plans. A footnote accounts for that rosy 73 percent figure:

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State Tax Burdens Ranked by Kiplinger

But not according to a Kiplinger report on taxes that puts New Jersey as only the fifth worst according to the criteria they used (ignoring things like debt and tolls while under-weighting the property tax burden):

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Stop Digging – But How?

The New Jersey Assembly GOP youtube channel recruited Assemblyman Ned Thomson, possibly the only pension actuary in state government, to discuss “the critical need to fully fund the state’s public-worker pension system.”
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So what does “stop digging” mean to the NJ Assembly GOP? After a few viewings it seems they are pushing two paths:

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Breaking News: Detroit Carpenters To Seek MPRA Cuts

Though not on the MPRA website yet, Crain’s Detroit is reporting:

The pension fund for the Michigan Regional Council of Carpenters and Millwrights has filed a plan with the U.S. Treasury Department to reduce retirement payments for up to 19,600 Southeast Michigan union members and retirees in a bid to stave off insolvency….Federal regulators certified the Detroit Carpenters Pension Trust Fund as being in critical and declining financial condition last year, when its long-term liabilities were nearly $2.22 billion.

It took a little digging to find the relevant plan since there is no Detroit Carpenters Pension Trust Fund. There is an Ohio Carpenters’ Pension Plan at the same Troy, MI address but that is bigger (in unfunded liabilities too with $4 billion and likely to be following the MPRA route soon) while there is a Michigan Regional Council of Carpenters’ Annuity Fund but that is a Money Purchase plan with fewer participants and, by definition, no underfunding. It was only after a trip to the sponsor’s website with the PPA notice that we found this 5500:

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Missing Links on NJ Pension

NJspotlight reported:

Although local-government pension bills will essentially hold flat in the current fiscal year, that good news has been tempered by the release of yet another report labeling the overall state pension system the worst-funded in the nation.

Without making the obvious link:

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