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ESPN.com: MLB owners to remove pension plan?

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#1 Parker Hageman

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Posted 19 March 2013 - 12:03 PM

Major League Baseball is discussing doing away with a pension fund for team’s non-uniformed personnel, including the scouts and front office members, writes Adam Rubin for ESPNNewYork.com.

According the website’s sources, owners attempted to revoke this pension plan last year but it was voted down. This year, however, owners will have a second vote, intended to be kept secret, at an owners meeting in May. Interestingly enough, this will not affect employees of the Minnesota Twins, as the ballclub was one of four MLB teams to opt out of the plan.

While this may seem galling for an industry making over $8 billion annually to put the screw job to scouts who average less than $40,000 a year, this is the tread with the private sector. In 1979, the article cites, more than 28 percent of private-sector worker received defined-benefit pension plans. That number has declined to less than 3 percent in 2012.

#2 IdahoPilgrim

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Posted 19 March 2013 - 12:31 PM

Welcome to the 21st century.

#3 nicksaviking

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Posted 19 March 2013 - 01:56 PM

The article makes it sound like the Tigers and White Sox ownerships are against revoking pensions. I wonder what the Twins "comparable" plan is? Probably your average 401K? I can't see the banker Pohlad's being on the generous side of this equation.

I'm getting tired of the other teams in the AL Central coming across as a champion of the fans and employees while our Twins do the opposite.

#4 Mr. Brooks

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Posted 19 March 2013 - 01:57 PM

And yet there are people out there who say that unions are outdated and unnecessary.
Isnt it great how a corporation can just vote to do away with a benefit that people were promised when they were hired.

#5 ThePuck

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Posted 19 March 2013 - 03:34 PM

why are we not surprised the Twins opted out of the pension plan to begin with?

#6 spideyo

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Posted 19 March 2013 - 09:01 PM

Company 401k Plans - Minnesota Twins Pension Plan

I'm sure a large part of the reason they opted out initially (although it's not clear when they actually opted out) is that Pohlad probably felt they could run things more efficiently and better for the whole organization by doing their own thing rather than letting the League dictate things.

While we all may have our gripes about how the team spends money on it's athletes, they really do take good care of their people. There's a reason why it's really hard to get a foot in the door with the Twins, and a reason why most people stick around with the organization for a very long time.

#7 spideyo

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Posted 19 March 2013 - 09:07 PM

Also: Company 401k Plans - Minnesota Twins Profit Sharing/401k Plan

#8 glunn

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Posted 19 March 2013 - 09:22 PM

Company 401k Plans - Minnesota Twins Pension Plan

I'm sure a large part of the reason they opted out initially (although it's not clear when they actually opted out) is that Pohlad probably felt they could run things more efficiently and better for the whole organization by doing their own thing rather than letting the League dictate things.

While we all may have our gripes about how the team spends money on it's athletes, they really do take good care of their people. There's a reason why it's really hard to get a foot in the door with the Twins, and a reason why most people stick around with the organization for a very long time.


Nice research to find this link! It would be interesting to find out what percentage of compensation the Twins are contributing.

#9 Brock Beauchamp

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Posted 20 March 2013 - 07:08 AM

And yet there are people out there who say that unions are outdated and unnecessary.
Isnt it great how a corporation can just vote to do away with a benefit that people were promised when they were hired.


This is something that fascinates me with modern conservatism. In a free market, unions should be embraced with open arms. They are a private organization to fight for workers' rights... In a truly free market, they are the only organization capable of fighting for workers' rights.

I don't like a lot of the things unions do and have done over the years, but without government intervention into the free market (which we all know is bad, right? RIGHT?), it's the only logical solution to combat corporate control over workplace conditions.

#10 IdahoPilgrim

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Posted 20 March 2013 - 08:03 AM

This is something that fascinates me with modern conservatism. In a free market, unions should be embraced with open arms. They are a private organization to fight for workers' rights... In a truly free market, they are the only organization capable of fighting for workers' rights.

I don't like a lot of the things unions do and have done over the years, but without government intervention into the free market (which we all know is bad, right? RIGHT?), it's the only logical solution to combat corporate control over workplace conditions.


I believe you are correct in that it is the existence of corporations that makes unions necessary. Classical capitalism never conceived of corporations - most suppliers and producers were small and interchangeable, so workers could move from one to another in response to work conditions. When corporations changed the employment environment, giving fewer options and less mobility, there needed to be a counterbalance, which is what unions provided.

In a capitalistic system, what's wrong with an organization that seeks the best interests of it's members? That's what capitalism is all about - seeking to advance yourselves. That's Adam Smith's invisible hand - the idea that when all participants put their own best interests first, it works for the betterment of all society.

#11 Mr. Brooks

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Posted 20 March 2013 - 08:10 AM

Not to take this too far political. But, I'm sure the classic answer from someone who is anti union would be, "the great thing about capitalism is that if employers treat their employees unfairly, there will always be competition that will offer them better 'x' (pay, benefits,conditions, etc.)
And I'm fine with that, if they go with some kind of grandfather rule. But, if they dont, then the point that that person would be ignoring is: what about all the current employees who were promised a pension when they were hired?

#12 Brock Beauchamp

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Posted 20 March 2013 - 08:11 AM

I believe you are correct in that it is the existence of corporations that makes unions necessary. Classical capitalism never conceived of corporations - most suppliers and producers were small and interchangeable, so workers could move from one to another in response to work conditions. When corporations changed the employment environment, giving fewer options and less mobility, there needed to be a counterbalance, which is what unions provided.

In a capitalistic system, what's wrong with an organization that seeks the best interests of it's members? That's what capitalism is all about - seeking to advance yourselves. That's Adam Smith's invisible hand - the idea that when all participants put their own best interests first, it works for the betterment of all society.


Exactly. Before the industrial revolution, unions were needed (obviously), but not nearly to the extent they were after corporate behemoths began to dominate the landscape. Once a few large players could control such a large portion of the workforce, it was only logical that worker-based organizations would rise up to combat them and fight for their own interests.

Just one of the fallacies of modern conservatism that I can't wrap my head around. There are so many opposing viewpoints in conservatism that, when compared to one another, don't add up to a cohesive view of the world. Free markets without unions, end government welfare but make no attempt to control unwanted pregnancies, marginalize the middle class in favor of the wealthy, continue ad nauseum.

#13 kab21

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Posted 20 March 2013 - 08:13 AM

This is not a union vs non union issue. MLB is taking away pensions earned in the past. It is simply choosing to further fund 401K's instead of a pension in the future.

If I ran a business there would be absolutely no way that I would include a pension plan. It's a scary business model and I definitely don't fault MLB for switching to a 401K.

Unions had their place and were instrumental in significant improvements in workers in the early 20th century but they abused their power. The UAW and some of their workers took things to absolutely ridiculous levels.

#14 kab21

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Posted 20 March 2013 - 08:14 AM

Not to take this too far political. But, I'm sure the classic answer from someone who is anti union would be, "the great thing about capitalism is that if employers treat their employees unfairly, there will always be competition that will offer them better 'x' (pay, benefits,conditions, etc.)
And I'm fine with that, if they go with some kind of grandfather rule. But, if they dont, then the point that that person would be ignoring is: what about all the current employees who were promised a pension when they were hired?


They still get a pension.

#15 Brock Beauchamp

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Posted 20 March 2013 - 08:16 AM

Not to take this too far political. But, I'm sure the classic answer from someone who is anti union would be, "the great thing about capitalism is that if employers treat their employees unfairly, there will always be competition that will offer them better 'x' (pay, benefits,conditions, etc.)
And I'm fine with that, if they go with some kind of grandfather rule. But, if they dont, then the point that that person would be ignoring is: what about all the current employees who were promised a pension when they were hired?


Which is fine if you ignore the fact that the best way for workers to fight for their rights is to get together, collectively agree upon terms, and fight for their own self-interest.

After all, isn't capitalism based on protecting our own self-interest? That's the logical fallacy that bothers me most. Some are supposed to fight for self-interest as an entity (corporations), but others are not (unions). It doesn't make sense.

#16 Brock Beauchamp

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Posted 20 March 2013 - 08:18 AM

This is not a union vs non union issue. MLB is taking away pensions earned in the past. It is simply choosing to further fund 401K's instead of a pension in the future.

If I ran a business there would be absolutely no way that I would include a pension plan. It's a scary business model and I definitely don't fault MLB for switching to a 401K.

Unions had their place and were instrumental in significant improvements in workers in the early 20th century but they abused their power. The UAW and some of their workers took things to absolutely ridiculous levels.


Pensions are definitely an awful idea. After a time, it creates built-in expenses that can drive a company into the ground and reduces production per dollar spent.

I'm not saying unions are always right, just talking about the oddities that define modern conservatism. I guess I kind of highjacked the thread...

#17 Oldgoat_MN

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Posted 20 March 2013 - 08:30 AM

To me what gets lost on so many is that, except for owners of large corporations, we ALL make more money because of the gains unions have made for their members.

One need not read a lot of history to see that.

But this isn't necessarily a bad thing for the owners or employees going forward.
Hopefully whatever change the owners make works for everybody.

When I had a dozen employees I had a 401k option. No business size increase would have convinced me to change that to a pension.

#18 IdahoPilgrim

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Posted 20 March 2013 - 09:51 AM

I understand the change that is going on in the workplace concerning retirement savings/security, and the reasons for the shift from defined-benefit to defined-contribution plans. The danger is that too many Americans don't have a good enough understanding about personal finance to know how to save for retirement, and too many don't make enough to be able to save for retirement. Even managing the asset allocation of a 401k is a skill that many in this country don't have - such as not keeping all your assets in company stock (think Enron).

We are heading to a time when retirement will become a thing of the past - people will work until they are no longer able to work, and then they'll have to depend on the grace of friends and family to survive - that's the system we had before the social safety net was created. And, of course, people being forced to work longer and postpone (or cancel) retirement creates more pressure on the job market, pushing up unemployment, particularly for younger workers trying to make a start.

At least there is Twins baseball to take our mind off this bleak picture!:D

#19 Mr. Brooks

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Posted 20 March 2013 - 12:08 PM

They still get a pension.


No, it said in the article that they were CONSIDERING grandfathering in current employees, but had not yet decided if they would.

#20 IdahoPilgrim

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Posted 20 March 2013 - 12:32 PM

No, it said in the article that they were CONSIDERING grandfathering in current employees, but had not yet decided if they would.


I'm guessing the article is a bit imprecise. Most pensions have some benefits which are vested and some which are not vested, usually determined by time in plan. Benefits which are vested would be guaranteed, by the government (funded by pension providers) if not by the company, and the employee would not lose any pension credits already earned. MLB could, however, stop issuing new credits to those already in the plan, i.e. they wouldn't lose the pension they have but the amount of the benefit would not increase any further from this point on, no matter how much longer they worked.

#21 Mr. Brooks

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Posted 20 March 2013 - 12:55 PM

I'm guessing the article is a bit imprecise. Most pensions have some benefits which are vested and some which are not vested, usually determined by time in plan. Benefits which are vested would be guaranteed, by the government (funded by pension providers) if not by the company, and the employee would not lose any pension credits already earned. MLB could, however, stop issuing new credits to those already in the plan, i.e. they wouldn't lose the pension they have but the amount of the benefit would not increase any further from this point on, no matter how much longer they worked.


Even so, thats not what they were promised when they were hired.
Even if they get to keep what is vested, we all know that most often these pension plans are weighted heavily towards the back end of the vesting period.
Maybe MLB is different, but the company my brother in law works for, AND the company my wife works for (2 completely different companies) both have pension plans that vest drastically more rapidly in the later years, than the early years.
The reason you stay at this company for the first 10 or so years is a sacrifice for the next 10 or so years. But to suddenly pull the rug out after those first 10 years and tell an employee, "well, you held up your end of the bargain, but hey,we've voted to not hold up our end of it", seems very wrong and greedy to me.
If they want to change the policy for any new hires going forward, that is one thing, but they shouldnt be changing or altering what the current employees were promised when they were hired.

#22 kab21

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Posted 20 March 2013 - 11:23 PM

I'm guessing the article is a bit imprecise. Most pensions have some benefits which are vested and some which are not vested, usually determined by time in plan. Benefits which are vested would be guaranteed, by the government (funded by pension providers) if not by the company, and the employee would not lose any pension credits already earned. MLB could, however, stop issuing new credits to those already in the plan, i.e. they wouldn't lose the pension they have but the amount of the benefit would not increase any further from this point on, no matter how much longer they worked.


That's correct. I will still receive $200/mo at some ungodly high retirement age for working at Ford Motor Company for 3.5 yrs (non-union).

Mr Brooks is right though. The financial IQ of workers in the US is unbelievably low. The workers that could get hurt are those with no significant savings outside of the MLB pension plan and social security. Sadly people don't think ahead.

#23 Mr. Brooks

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Posted 21 March 2013 - 10:49 AM

That's correct. I will still receive $200/mo at some ungodly high retirement age for working at Ford Motor Company for 3.5 yrs (non-union).

Mr Brooks is right though. The financial IQ of workers in the US is unbelievably low. The workers that could get hurt are those with no significant savings outside of the MLB pension plan and social security. Sadly people don't think ahead.


I dont think peoples financial IQ has anything to do with it.
Even if someone has managed their money well, and has enough saved up to retire on already, it doesnt change the fact one bit that they should get what they were promised when they were hired.
Its the principle of it.

#24 Willihammer

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Posted 21 March 2013 - 11:50 AM

I am short on sympathy for anyone who thinks they have signed up for a 20 year commitment from their employer to never change their wages or benefits, or lay them off. The pension funds accrued to this point will not disappear and that's all you could reasonably expect IMHO.

#25 Brandon

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Posted 21 March 2013 - 12:48 PM

union = mob mentality.

I worked at ups when i was told i had to strike. management offered more money in exchange for 50% of control of pension as they felt the union was mismanaging the money. I was coerced and some people who chose not to strike had cars vandalized people were threatened. the unions walked more over the freedoms of the employee's then management did. Unions are way outdated. There are laws in place for a safe work environment. If you go to work for the benefit of a pension or a promise of payments 30 years from now ....here's your sign (engvall's sign for stupid) the business may not be around then. you as an individual are responsible for your retirement and well being. If you are offered a pension and the company decides to discontinue it. The you as an individual can exercise your right to leave that company. Its not like the union is going to help an employee who gets downsized 1 year before full pension benefits kick in. (thats not me by the way I left UPS years ago). Individuals should have the right to opt out of paying union dues (that may go to political parties you may not agree with) and being part of a union as a means to employment.

#26 Mr. Brooks

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Posted 23 March 2013 - 01:38 PM

I am short on sympathy for anyone who thinks they have signed up for a 20 year commitment from their employer to never change their wages or benefits, or lay them off. The pension funds accrued to this point will not disappear and that's all you could reasonably expect IMHO.


Yeah, the wages to pension argument is comparing apples to oranges.
The only way it would be similar is if your company told you they were going to hire you at minimum wage, but if you stayed and worked for minimum wage for 10 years, they would bump you up to $40/hr for the next ten years, only to pull the rug out after the first 10 years and say, "haha, just kidding. We voted to change that, you just worked 10 years @ minimum wage for nothing!!"

#27 Willihammer

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Posted 25 March 2013 - 12:27 PM

Something soemthing world's smallest violin.

Get it in writing next time!

#28 Mr. Brooks

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Posted 25 March 2013 - 06:07 PM

Something soemthing world's smallest violin.

Get it in writing next time!


You're right, there was probably nothing in writing.
Most huge companies like the MLB and MLB teams hire people with nothing but a handshake and a smile.
That's kinda my point about the unions.
I'm guessing the pension plan was in writing (has anyone here ever heard of a pension plan that was not written down somewhere?), but who do you think is going to be able to win in court, MLB with millions of dollars worth of hot shot lawyers, or a few non union employees pulling 80k a year?

#29 Willihammer

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Posted 25 March 2013 - 07:41 PM

but who do you think is going to be able to win in court?

MLB because no contract was broken and nobody was screwed out of any guaranteed money

#30 Brock Beauchamp

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Posted 26 March 2013 - 06:18 AM

I'm sure glad people on the internet have curt and easy answers to all of life's problems.

After all, it's not like peoples' futures are at stake here or anything. A simple "get it in writing!" will teach those troglodytes their lesson. After that, screw 'em.