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notpaultx t1_iu6fx4e wrote

Take the payouts, cause the layoffs are coming

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nochinzilch t1_iu9ll6l wrote

It depends on the deal, but buyouts are usually about cutting payroll, not cutting pensions. So instead of paying someone $1 million in pay over the next 10 years, they'll pay them $250k to stop working, and then contribute $100,000 to the pension fund to account for the loss in contributions that would have been made in the next 10 years. When the employee turns 65, they take their pension just as if they had worked those ten years. It's a win-win-win if a company has too much talent on the payroll for the expected workload over the next 10 years, and also has some excess revenue they want to try to write off. And the employee gets a semi-funded early retirement.

I can't speak for all pensions, but the ones I am familiar with are simple annuity types of things. For every year you work, an amount of money is put into the fund. That money is invested so that on the other end, when you retire, there is enough money to pay out what they promised you. There's no real trickery involved, it's just actuarial math.

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