Ford Retirees Criticize Lump-Sum Payment Offer Vs. Monthly Pension Checks
The Ford Actions Impacting Retirees Alliance hired a team of lawyers, consultants and accountants to review the proposal Ford made this month, and in a letter to its members, advised against accepting the buyout, the Detroit News reported.
A group of Ford Motor Co. retirees is calling for rejection of the automaker’s offer of a lump-sum payment instead of monthly pension checks, the Detroit Newsreported June 27.
The Ford Actions Impacting Retirees Alliance, or FAIR, hired a team of lawyers, consultants and accountants to review the proposal Ford made this month, and in a letter to its members, advised against accepting the buyout, the newspaper reported.
By the end of the summer, Ford will offer between 12,000 and 15,000 of its white-collar retirees in the United States the option to receive a one-time payment instead of their monthly pension checks. There are about 98,000 white-collar Ford retirees.
Retirees are not required to accept the lump-sum payment, and Don Whitehouse, president of FAIR, which is headquartered in Madisonville, Kentucky, told theNewsthat the letter to the organization’s members says that the pension system is the most fair choice for the retirees.
“There is no possible way that we can receive better returns on investments with the existing stock market, CDs or any other financial choices without taking a loss and Ford Motor Co. knows that very well,” the letter read, according to theNews.
FAIR didn’t immediately respond to an interview request. The organization has more than 3,000 members, according to its website.
The automaker has $15.4 billion in unfunded pension liabilities that it hopes to reduce through the buyout offer.
While the plan may make sense for Ford, Whitehouse told theNewsthat only one retiree has told him that he planned to accept the lump-sum offer.
“I’ve only had one person—of all the people we’ve been in contact with — who said he’d take the buyout no matter what,” Whitehouse told theNews. “His wife died, he has no kids and he has cancer. His doctor gave him three months to live.”