Corteva and DuPont pensions

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Good morning,

News that Corteva AgroScienceswould assume DuPont’s pension accounts came as a bit of a surprise.

Corteva, said to be the strongest of the three companies to be spun off from DowDuPont, helped drive the merger-spinoff in the first place.

DowDuPont this week announced plans to buy back debtin a deal that will make Corteva less leveraged than DuPont.

Corteva is subject to ups and downs that come with droughts, trade wars and commodity prices, but has a number of strong businesses.

The status of pensions has long been an area of concern among thousands of DuPont retirees here and elsewhere. One group, organized around Facebook, hired legal representation and requested a meeting with management.

The company made it clear that benefits would not change for retirees under Corteva.

DuPont has pumped money into the pension fund as it moves towards a spin-off from the temporary merger with Dow. There has also been an effort to make its pension fund investments less volatile.

Pensions from big companies like DuPont were a selling point over the years in attracting talented people.

However, DuPont put the brakes on its defined benefit program more than a decade ago and went the 401 (k) route with employee and employer matches.

401 (ks) offer tax advantages and a degree of flexibility for employees. That’s a problem if the money is tapped for college educations, house down payments and other worthy activities.

All of us were tempted over the years to tap into those funds.

Unfortunately, draining 401 (k) accounts can leave the cupboard bare at retirement time. Gains come in riding out the ups and downs of markets.

Education efforts can be difficult to implement in today’s busy workplace and procrastination in signing up is common. But that’s a topic for another day.

Over the past decade, there have been concerns that DuPont will eventually go the route of many companies and turn over the program to an insurance company.

That did not happen with the planned hand-off to Corteva. If the ag spin-off company ends up with a strong balance sheet, defined benefit retirees can breathe a little easier.

The worst outcome would be a Corteva that craters. Then all bets are off, even with the limited federal safety net. – Doug Rainey, publisher.

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