You barely had 5 years before the Defined Benefit Pension Plan (DBPP) was axed - so you'll have vesting for that service.
Here's how you calculate (rough) what you'll receive under the DBPP.
Take the average of what you earned each FedEx FY under the DBPP, then multiply that by total years (retain fractions) then multiply that by 2% - that is your payment for the DBPP portion of your pension starting at age 60.
For example, assume you had 5.5 years while the DBPP was in effect. You'd average your earnings for those years (let's just use an easy $35,000), then multiply that by 5.5 then that again by 2%. The answer is your ANNUAL pension payment starting at age 60. Divide that by 12 to get your monthly "check".
In this case, it is 5.5 * $35,000 * 0.02 = $3,850 Annual Pension under DBPP portion of your pension
Divide that by 12 to get a monthly payment of $320.83 starting at age 60.
This IS NOT inflation adjusted - so you will receive $320.83 in actual dollars starting at age 60. Whatever the value of that $320 per month is in TODAY's terms is uncertain.
If you assume a 3% average annual inflation rate, here's what that $320 will be equivalent to in 2012 dollars - have to make assumptions about your current age:
Age 30 now (pension start in 2042) : Annual pension worth $1,567 in 2012 dollars or $130.60 per month in 2012 dollars.
Age 40 now (pension start in 2032) : Annual pension worth $2,114 in 2012 dollars or $176.21 per month in 2012 dollars.
Age 50 now (pension start in 2022) : Annual pension worth $2,858 in 2012 dollars or $237.77 per month in 2012 dollars.
The "intent" of a DBPP is that as your wages are constantly adjusted for inflation, the average of your high 3 or high 5 years (depending on how a company structures it) is constantly increasing - so there ISN'T the diminishing returns you see above. If you work till age 60 (the "intent" of a DBPP) you are constantly receiving adjustments for inflation, so your actual pension works out to 50% of your average earnings for the last few years you worked.
When FedEx dumped the DBPP, the averaging was done for the years BEFORE and including 2008 - NOT AFTER. This is how FedEx was able to (for accounting terms) accurately quantify the pension liability of the DBPP.
For those FedEx employees which were at 20+ years of service at the time of the pension being gutted, they will actually benefit a bit. This is due to their having enough time to "max out" their DBPP (but NOT receiving the inflation adjustments which occur with averaging the last years of employment - presumably the highest paid), AND to their receiving the cash payments under the Portable Pension Plan. For those who had 25+ years of service as of 2008 AND were age 50 or older - they'll make out rather handsomely - since under the DBPP, any service over 25 years didn't get used in the calculation for definiing annual pension payment. This is why there are so many people in their early 50's hanging on for dear life - they have their DBPP at full value (although losing some ground with inflation), AND they are collecting PPP "contributions" of about 7% or their gross instead of the 5% everyone under 50 years of age receives. This is another fact that FedEx doesn't widely advertise, but it is readily present in its retirement literature.
Your PPP is done on a pure cash basis. You will have received 5% of your gross earnings (presuming you are under age 50) for each year the PPP has been in existance.
Assume you quit tomorrow, and had 4 years under the PPP and received an average of $35,000 gross for each year (done to make the math easy here, the amount is done for each year with a "contribution" done after the end of each FedEx Fiscal Year).
$35,000 * 0.05 = $1,750 annual "contribition" by FedEx into the PPP portion of you pension benefit.
If you had that for each of the 4 years under the PPP = $7,000 cash balance in your PPP. You should be receiving notification by FedEx with the balance in your PPP periodically.
This sum is "invested" at the whopping rate of 4%. The annual inflation rate is between 2.5 and 3%. So you are making between 1 and 1.5% in real returns. Meanwhile, FedEx is "holding" those monies (they are NOT with a third party), and while paying you the 4%, is saving itself its market rate on bonds (which is currently between 7 and 8%). FedEx is making bank on your PPP, while you are receiving a moderate amount above inflation.
Here's what that $7,000 will be worth (I can use 2012 dollars directly here) assuming diffferent ages.
Age 30 now (draw on PPP in 2042) : $10,975 in 2012 terms. That is the SUM TOTAL of your PPP account balance 30 years from now in 2012 dollars. Admittedly this is only for 4 years of work, but you can see it won't hold you for any amount of time. Once you draw this sum, it is GONE.
Age 40 now (draw on PPP in 2032) : $9,447 in 2012 terms. Again, this is the SUM TOTAL of your PPP account balance 20 years from now in 2012 dollars for the "contributions" made for the 4 years between 2008 and 2011 with $35,000 gross. Once you draw this sum, it is GONE.
I ran the calculations for a new-hire employee to see what their pension payout would be if they had no time under the DBPP way back (not going to take the time to repeat it here). It worked out that when you compared the DBPP to the PPP, the PPP only pays out about 35% of the amount the DBPP did (assuming no time under DBPP). You lost 65% of your pension when FedEx dumped the DBPP. Those that had more years under the DBPP lost a decreasing amount - while those with more than 25 years and age 50+ in 2008 actually gained from the whole scheme.
In otherwords, under the DBPP, an employee could (in combination with Social Security and their own personal IRA investments) live a retirement at approximately 100% of their pre-retirement income (DBPP 50%, SS 35%, IRAs 15%).
Under the PPP, an employee could live a retirement at approximately 67% of their pre-retirement income (PPP 17.5%, SS 35%, IRAs 15%).
FedEx has shifted the "burden" of paying your retirement to YOU. If you want to maintain the same retirement as you would've had under the DBPP, you need to max out your 401k contribitions, along with IRA contributions.
WHEN THE DBPP WAS CUT, EMPLOYEES WITH LESS THAN 10 YEARS OF SERVICE TOOK THE EQUIVALENT OF A 10% CUT IN THEIR TOTAL COMPENSATION.
This was the "straw that broke the camel's back" for me and why I made plans to get out and did indeed do so.
Your total retirement has been reduced by one-third, by Express converting to the PPP and NOT paying a full 13% contribution as they would need in order to have financial equivalency with the DBPP.
If you stay with FedEx - I hope you enjoy BOTH your lower middle class standard of living (working in a non-union company) AND having to work part-time after you "retire" in order to maintain they meager lifestyle you've been accustomed to while working for FedEx.