<p>Huge news in these parts … but my dad hadn’t heard in FL, so I had to give him the bad news: General Motors is eliminating salaried retiree health care benefits. My dad checked into it, and he says that the gloss the company is putting on it (medicare covers you, a little extra money each month, etc.) is b.s. Basically, the rug has been pulled out from under salaried retirees. My mom needs major surgery & will be pushing the doc to do it before the end of this year. </p>
<p>H & I will have some time to plan for this reality (like knowing we’ll work until we die!). My parents, however, did not expect this.</p>
<p>This has been occuring over the last few years. Congress passed a law making it “legal” to take away benefits from retirees over 65 that were promised years/decades ago. Many major companies are doing this. Many companies started by dropping drug coverage when Medicare added part D. Now companies can drop the policies that pick up where Medicare leaves off. Working in a medical office in Florida, we have seen this happening esp in the last 6 mos. This is unfortunate. I do hear that GM is bleeding cash, and overheard on Nightly News (NBC) a discussion about how long they can last before declaring bankruptcy. This recession and the price of gasoline will be felt by all of us.</p>
<p>kelsmom - you have my sympathy. my dad receives surviving-spouse pension and health care from my late mom’s employer - a major bank whose stock dropped 20 percent yesterday. so i am fearful that he could have the rug pulled out from him too…</p>
<p>That’s always a concern. The company H works for (28 years!) is rumored as a possible takeover target, which could threaten his future pension and retiree health benefits. I hope if they do change hands, they offer a buyout to longtime employees near retirement. Not many places left with traditional pensions, and I’m sure more and more will be changing the health benefits for retirees.</p>
<p>“This has been occuring over the last few years. Congress passed a law making it “legal” to take away benefits from retirees over 65 that were promised years/decades ago.”</p>
<p>And this is why you should never expect company pensions to cover you. Companies can go out of business, business conditions change. GM is in dire straights right now, in order to maintain its viability as a business they need to cut costs. Period.</p>
<p>I haven’t really kept track of GM stock, but read in the paper that its stock price has dropped 87% since 2000. That is close to dotcom bust numbers. And I’ll bet that a lot of people have an unsafe chunk of their retirement portfolio tied up in GM stock.</p>