Why Workers and Retirees Deserve a Better Pension The GE Pension Plan: sustained by the pension plan, its compound investment return was 75.7%. Very Rich Indeed The pension fund continues to be over- Personal Pension Account funded, holding more than $5 in assets for every $4 of benefits which have been earned by While GE has not contributed a penny to GE employees and retirees. support pension benefits since 1987, employees That doesn’t sound like much, does it? But it have been required to contribute 3% of earnings adds up to nearly $16 billion in overfunding! over a set threshold to their so-called Personal Such a rich plan is more than able to improve Pension Accounts. the benefits received by those already retired as In 2007, GE pays 5.51% on the PPA. Yet, it well as active employees who will retire in the pays 8.5% to 14% on deferred compensation future. accounts for top executives. Between 1999 and the end of 2006, the Even though the earnings threshold has been assets of the GE pension fund grew from $43.4 increased in recent years, most members have billion to $54.7 billion. In that time, it paid out made contributions to this forced savings plan $17.8 billion in benefits. Employee over the years and those dollars add directly to contributions added $1.2 billion. the assets of the GE pension fund, helping the The plan had total investment returns of company to continue its funding holiday. $27.1 billion – despite $8.1 billion in losses in From 1999 to 2006, the compound interest the down markets of 2001 and 2002. paid to employee assets in Personal Pension Even with two years of investment losses Accounts amounted to 50.3%, considerably less than the 75.7% compound interest rate earned by Mass., for 32.5 years and receives $581 a the investments in the GE Pension Plan month. It is outrageous that the pension fund has • Helen Quirini worked for GE in enjoyed great returns on its investments over the Schenectady, N.Y., for 39 years and receives years but the company has limited the interest $736 a month. paid on Personal Pension Accounts to not much • John Burke worked for GE in Lynn, Mass., more than what might be paid to a passbook for 43.5 years and receives $1,007 a month. savings account. It is no wonder such a small portion of the benefits paid to retirees flow from the PPA. GE’s Executive Retirement Plan Pays Top Dollar Retirees Need An Increase The GE Supplementary Pension Plan (SPP) provides retirement benefits for executives that exceed IRS limitations on the benefits that can After 2003 negotiations, the plan guarantees a be paid from tax-qualified pension plans. worker, retiring after 30 years of work, a pension minimum of $990 per month - which replaces The SPP pays up to 70% of an executive’s roughly 32% of final year’s wages. average annual compensation based on his or her highest 36 consecutive months of compensation. GE retirees received a one-time extra month’s pension check in 2003 as a result of 2003 So, for example, Robert C. Wright, vice contract negotiations. The last permanent chairman of the board and retired head of NBC increase came in 2000, but it only applied to Universal, has an SPP accumulated value of those who retired before June 1997. $59,221,042 as of the end of this year. Plus, he will has another $1,395,952 in accumulated Too many of our retirees are living near benefits from his regular pension: that’s more poverty and struggling to make ends meet: than 60.8 million in benefits for an average • Joseph Taliger worked for GE in Lynn, credited service of 34 years. Outrageous! Pension Plan Principles The CBC believes that all decisions about our pension funds must be guided by the following: • Pension plan assets should be used exclusively for the benefit of plan participants. • Pension funds should be used to secure a fair and just retirement for beneficiaries. • The benefit of surplus funds should go to plan participants. • The pension plan must be managed in the interest of beneficiaries. • The pension plan must review benefit levels of retirees and make adjustments based on increases in the cost of living.
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