Honda confirmed recently that it plans to explore retirement options for its workers in Ohio and across North America. The company, which employs 13,700 in Ohio, intends to offer lump-sum buyouts of employee pensions. Those who take early retirement before March 1st will receive a larger lump sum as well as higher retiree health insurance benefits for spouses than those who wait until after the deadline. Honda discontinued its pensions program for new employees last year, offering a 401(k) savings plan instead.
Lump sum payments have become something of a trend among large automakers. They are a way for companies to obtain “less volatility in their future payment streams,” says Olivia S. Mitchell, Professor of Insurance/Risk Management and Applied Economics/Policy, and Executive Director of the Wharton’s Pension Research Council at the University of Pennsylvania.
Read the full Columbus Dispatch story here.