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Fishers, Indiana, United States
Brenda gained career expertise as a human resources leader at a global company before becoming an HR consultant. She gained functional experience in a variety of sales roles in the health care industry achieving success for over 20 years. Her passion is participating in, writing about and observing the evolving workforce. For the first time in history four generations work together. It keeps things interesting. Baby Boomers (born 1946-1964) are redefining retirement and what it means to age in the workforce. It is not just about money. Okay it plays a role! At 76.4 million members strong, Boomers are leveraging technology to continue their careers and the personal fulfillment working brings. Managing a late-stage career requires more thought than 20 years ago. Unexpected changes in life force us to consider the future. There is no roadmap or one size fits all answer. This blog is about sharing, networking & finding your own right answer to working later, managing your career, redefining retirement, looking for work in your 50s & 60s and reinventing yourself.

Sunday, September 14, 2014

While You Weren't Looking....



Timing is everything. It is used by the most strategic communicators to insure their message doesn’t hit a busy news day and is drowned out by other stories. Johnson & Johnson’s announcement Thursday that they are suspending their defined benefit pension plan for employees who join the firm after January 1, 2015 was a timed release. Thursday was September 11, Patriot’s Day in the United States and a day of remembrance when the news media, even the business media was focused on what happened in America thirteen years ago. It was the perfect day for the world’s biggest maker of health care products to release that news to media. On September 10, J&J management presented a rosy, yet cautious picture at the Morgan Stanley Health Care Conference. On September 11 you tell your workforce the pension plan won’t be there for your kids when you get them hired. Timing.
So, this is the part of the blog post, where I share in full transparency that I am an early retiree of J&J. At this point, I know from the scant news coverage this story garnered, that current retirees (like me) and active employees are not impacted. This action is for new hires and re-hires after 1/1/2015, I know that because I read it on the Internet. I probably have a letter coming from J&J’s benefit service center’s HQ in Lincolnshire, IL explaining I am not impacted at all. That letter hasn’t arrived yet. Timing.
I am certainly not surprised J&J’s defined benefit plan went away. I came to work for the company primarily because they offered the plan. In my 21 years of work prior to joining the health care giant my previous employers only offered 401(k) or defined contribution plans. In 401(k) plans you pay and the company matches. In defined benefit (DB) plans, the company pays 100% and you are guaranteed* a set amount for life or in J&J’s plan design until you are 90-years-old. I’ll figure out what to about 90 to death when I get there. According to a report by Towers Watson, an employee benefit consulting firm, about 24% of Fortune 500 companies offer “DB” plans to new hires in a considerable decline over the years.
Hopefully, you read the previous blog post: Pension Smoothing, Potholes & Pork. I highly recommend it.  
http://workinglater.blogspot.com/2014/09/pension-smoothing-potholes-and-pork.html
DB plans are notorious for being underfunded (aka not having enough money to pay the amount of money owed). J&J is no different. From a J&J public website on strategic framework—oh forget it, I’ll just let corporate communications speak for themselves:
At the end of fiscal year 2012, the projected benefit obligation was $21,829 million, and the fair value of the assets equaled $17,536 million, for a shortfall of $4,293 million. Discretionary contributions are made when deemed appropriate to meet the plan’s long-term obligations. For more information, see Note 10 in our 2012 10-K Annual Report.”
All I know is when I do get ready to tap into my DB money, I hope there is a big pile of cash with my name on it and the plan is not “short” (aka underfunded, broke, busted…). Timing.

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