MORNING COFFEE132 views 2012-07-31 08:06
Ford Offers Pension Buyout. For the first time Ford (F) is offering its former white-collar salaried retirees a lump-sum pension buyout offer. The offer is an attempt to reduce its underfunded $74 billion global pension liability. Currently the plan is $15.4 billion short.
98,000 salaried retirees and former white-collar workers will be eligible for the buyout which will be based on interest rates, life expectancy and actuarial tables the federal government uses to calculate pension obligations.
Retirees have already begun receiving letters letting them know they are eligible for the lump-sum option. By summer's end, 12,000 to 15,000 randomly selected workers will receive a second letter outlining the exact offers. The rest will be rolled out during the next 12 months. Upon receiving the second letter retirees will have 90 days to decide once they receive the offer.
Rick Paler President of RL Paler Investment Advisors, LLC a wealth management firm with offices in California and Michigan said “These retirees face a very big decision which cannot be taken lightly.” He went on to say “One needs to take into consideration the spousal benefits, tax implications, and estate ramifications.” He recommends speaking to a qualified wealth manager or a CPA before making any decisions.
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