The Erosion of Retiree EARNED Benefits: GE kicks former employees to the curb.
By John Phelps-President-GE Retiree Benefit Solutions, Inc.
As of today, there are approximately 368,385 total GE retirees—Retirees in pay status number 245,761 now, and another 122,714 vested retirees are still active or former employees right now—that are not eligible for benefits yet (age).
It is a shame how GE has addressed Retiree/Dependents, and their “hard EARNED” benefits. They “promised;” made verbal promises to so many of us, that we would be taken care of in our later lives. And of course, you all know how GE included that wonderful language in their SPD’s about Benefits— “GE can revise, amend, terminate, etc. …any benefit, at any time, at their discretion.” And you also know, how the Courts—in both the Salaried & Hourly Retiree Healthcare Lawsuits, sided with GE on that written reservation of rights clause.
Healthcare was first…a BIG win for GE. A $3.3 Billion dollar win for GE. The problem is…it was ill thought out, and was rolled out, to an audience of GE Retirees/Dependents that did NOT have a clue, as to how to handle Retiree Healthcare choices; GE always took care of it for them. Retirees/Dependents did not understand all the nuances of Medicare, Medigap and RX coverage; and they had NO ability to research it on their own—since 75% of Post-65 retirees/dependents were computer challenged (illiterate). Oh, I know, GE said “Don’t worry,” we will have a Company (One Exchange, that became VIA Benefits) will help you—Now, you all know that VIA Benefits had you best interests in mind…right? GE said—we will help you—we will give you a Retiree Reimbursement Account— $1000 a year to help you; but 60% get the RRA, and 40% don’t get the RRA—now that’s fair…right? They took Retiree/Dependent Healthcare away from EVERYBODY; yet 40% got left behind on the RRA?? And GE said—“You will love all choices you now have, so many more choices;” some geographical areas had 1, maybe 3 choices for Post-65 Healthcare. GE said— “We know you will be satisfied with this service;” the first year GE said we were “80% satisfied” with the One Exchange service; while our Healthcare Surveys said 55% were satisfied. The absolute worst stat I quote to GE every year is this one—up to 24% of our Retirees/Dependents skip doctor appointments, tests/procedures and skip MEDICATIONS due to such high out-of-pocket (OOP) costs; this is unconscionable! They are literally obliging us to live unhealthy lifestyles in our retirement!
And now Pensions Plans are being targeted for de-risking– first by offering lump sum buyouts, then via the purchase of group annuity contracts. A top GE Executive stated— “GE continues to appreciate the thousands of retirees who delivered for our customers, our shareholders, and for each other. As we seek to balance GE’s ongoing obligations with the need to strengthen our balance sheet, we are pleased to enter into this arrangement with Athene –a highly rated company that will serve this group of retirees well, ensuring they receive the same pension benefit, on the same schedule, as what they receive today.” But your money will be held in a foreign country, where there are no guaranteed protections, and that’s okay?? They will soon be owned by Apollo, a Private Equity Company, that I have personal experience with—at the Old GE Silicones Plant, in upstate NY, that GE sold to Apollo. They decimated the Plant, the wages and benefits, and eventually contributed to it going bankrupt. So, GE is basically saying, we will have to De-Risk our Debt/Liability Retirees/Dependents… and don’t think you are exempt from these debt and liability reductions; even though you have fewer choices, no say, nor any ability to protect your retirement payouts, for the time you have left. Hard statement, I know, but oh so true. We just did a Pension Plan De-Risking Webinar—we showed you the most recent de-risking strategies GE has implemented in the past 2 years. I call it—GE “nibbling at the edges;” I expect more. They are “testing the waters,” seeing just how far they can go, before there is a big outcry of concerned current and future retirees; unless, we as a LARGE group (400,000) stand up to GE, and tell GE—“We can’t take any more ‘hits!’” In my mind, it will continue, I’m sure! That is pretty darned obvious. We have to join together—all of us—from all over the Country, and say “We’ve had enough; treat us with dignity we deserve!” Sadly, we may have to no recourse, but legal action. We must raise the awareness on this issue!
The best I can figure…roughly 10,000 retirees/dependents die a year. Do you get the “feeling—the sooner the better?” We are literally “dead weight” to GE; think of the savings to GE –NO more Healthcare costs ($3-4 billion), NO more Pension Liability ($20 Billion). And as part of reducing that debt/liability, GE continues to look at strategies to further reduce their debt/liability; and of course, Retirees have become their target these past 5-6 years. And yet many GE Executives have received their pay and bonuses; like Jeff Immelt that nearly bankrupt the Company, and nearly ruined GE’s reputation and standing, and put GE so far in debt, they are still trying to climb out of it! But that’s okay, he won’t be chastised, nor any claw back of his money (salary, bonuses, golden parachute, etc.)—so the Company says! Let’s get it back from assets sales—job losses, closing/selling manufacturing plants, moving them overseas; or from cutting our retiree’s benefits; or other cost cutting measures. Now, I certainly want to see GE succeed—become profitable again, to rebuild it’s reputation again—but not at the cost of decimation of retirees/dependents quality of life concerns and our financial security; and the pain of so many communities in this Country; that put their heart and sole into making GE great. I guess I am an old fart, that still wants to think that Companies care about their employees, and their communities; that offered fantastic wages and benefits; that made employees and retirees proud to be part of their long, storied heritage.
Do we all have to share in the cost cutting pain…I guess so; but how about doing it fairly, proportionately, with 2-way communication with Retiree Groups/Organizations and their Representatives? We didn’t create this financial mess, yet we seem to be a large group that will disproportionately have to pay for it? We have to ask ourselves these questions—Is it legal—I guess so, according to the Courts; but is it moral, or is it fair—NO WAY!!
It’s a HARD “Pill,” to Swallow; if only, We Could Afford the Pill!!