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<blockquote data-quote="Ricochet1a" data-source="post: 574742" data-attributes="member: 22880"><p>This means he is under the DBPP. He made it out in time.</p><p> </p><p>It is difficult to state precisely what his pension would've been if he had retired on or after June 1, 2008. There was a "smoke and mirror" scheme of assigning compensation credits based upon age and time of service as of June 2008. In general, the disparity between the DBPP and the PPP will start out small for those that have retired in the year since PPP went into effect and will gradually widen until those that hired-on after the switch will receive only about a third of what they would've under DBPP. </p><p> </p><p>Quite a few employees decided in early 2008 to retire before May 31, to preserve their DBPP. For many it was a difficult decision to stay. They wanted to protect what pension they had, but couldn't find another job quick enough to bail-out before the involuntary switch to the PPP. </p><p> </p><p>The employees within 5 or so years of a "full retirement" (25 years plus), will take about a 30% hit to their pension under the PPP. That "hit" will gradually increase for younger employees till the "hit" is about 65% of the amount that would've been paid under DBPP for new hires right now. </p><p> </p><p>But all this ignores the pending business model of FedEx. The full time wage employee is going to be gradually converted to a part-time employee. I keep on coming back to the same thing over and over, there will be no full time wage employees in Express if Fred can change the business model like he wants. Part-time employees that work for 5 years on average for an employer DON'T CARE what the pension plan is, all they want is immediate benefits and a predictable schedule. That is what Fred is planning on offering. </p><p> </p><p>This is why the PPP was enacted; it greatly reduced a future liability for Express. In addition, the "balance" in the PPP is held by FedEx, allowing them to use it for business purposes and only pay 4% annual interest. Not many businesses have a non-revokable line of credit that they pay 4% interest on. </p><p> </p><p>This explains why Fred is fighting so hard to keep Express and Ground union free. Even if it costs him $100 million to keep the unions out, he'll make that back in a matter of months with the reduced compensation levels he pays line employees. For Fred, this is a make or break propositon. By keeping the unions out and compensation at ridiculous levels, he has a built in profit margin over any competitor, especially UPS.</p><p> </p><p>For the uneducated employee (yes, there is no way around it, most wage employees don't have a clue as to what the issues really are), they continue to believe that FedEx and Fred are looking out for them. Reality couldn't be any further from that false belief. The wage employees are being abused to further the profit goals of executive management. Even the salaried employees have been tossed under the bus by FedEx now. They are under the PPP too, and they know very well how much they lost. The question is how many will remain once the economy improves. From what I've heard from my friends in Memphis and locally, many will be jumping ship once the economy turns around. </p><p> </p><p>This is starting to cause problems for FedEx. A large segment of what I'd call "problem solving employees" are now becoming problems for FedEx. These people can see problems and solve them....... problem is, there IS a problem with FedEx now and it can't be solved. So what is this intelligent employee to do? Make preparations for abandoning ship and getting away from the impending shipwreck.</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 574742, member: 22880"] This means he is under the DBPP. He made it out in time. It is difficult to state precisely what his pension would've been if he had retired on or after June 1, 2008. There was a "smoke and mirror" scheme of assigning compensation credits based upon age and time of service as of June 2008. In general, the disparity between the DBPP and the PPP will start out small for those that have retired in the year since PPP went into effect and will gradually widen until those that hired-on after the switch will receive only about a third of what they would've under DBPP. Quite a few employees decided in early 2008 to retire before May 31, to preserve their DBPP. For many it was a difficult decision to stay. They wanted to protect what pension they had, but couldn't find another job quick enough to bail-out before the involuntary switch to the PPP. The employees within 5 or so years of a "full retirement" (25 years plus), will take about a 30% hit to their pension under the PPP. That "hit" will gradually increase for younger employees till the "hit" is about 65% of the amount that would've been paid under DBPP for new hires right now. But all this ignores the pending business model of FedEx. The full time wage employee is going to be gradually converted to a part-time employee. I keep on coming back to the same thing over and over, there will be no full time wage employees in Express if Fred can change the business model like he wants. Part-time employees that work for 5 years on average for an employer DON'T CARE what the pension plan is, all they want is immediate benefits and a predictable schedule. That is what Fred is planning on offering. This is why the PPP was enacted; it greatly reduced a future liability for Express. In addition, the "balance" in the PPP is held by FedEx, allowing them to use it for business purposes and only pay 4% annual interest. Not many businesses have a non-revokable line of credit that they pay 4% interest on. This explains why Fred is fighting so hard to keep Express and Ground union free. Even if it costs him $100 million to keep the unions out, he'll make that back in a matter of months with the reduced compensation levels he pays line employees. For Fred, this is a make or break propositon. By keeping the unions out and compensation at ridiculous levels, he has a built in profit margin over any competitor, especially UPS. For the uneducated employee (yes, there is no way around it, most wage employees don't have a clue as to what the issues really are), they continue to believe that FedEx and Fred are looking out for them. Reality couldn't be any further from that false belief. The wage employees are being abused to further the profit goals of executive management. Even the salaried employees have been tossed under the bus by FedEx now. They are under the PPP too, and they know very well how much they lost. The question is how many will remain once the economy improves. From what I've heard from my friends in Memphis and locally, many will be jumping ship once the economy turns around. This is starting to cause problems for FedEx. A large segment of what I'd call "problem solving employees" are now becoming problems for FedEx. These people can see problems and solve them....... problem is, there IS a problem with FedEx now and it can't be solved. So what is this intelligent employee to do? Make preparations for abandoning ship and getting away from the impending shipwreck. [/QUOTE]
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