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UPS Retirement Topics
UPS Special Pension Buyout Offer - December 2016
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<blockquote data-quote="Catatonic" data-source="post: 2384177" data-attributes="member: 7966"><p><strong>Brownmonster </strong>is right ... expect on the low end.</p><p>I have been through 2 buyouts and it is definitely low-ball.</p><p>The retirement payout will be based on the amount you would get at full retirement age (normally 65).</p><p>It will be actuarially calculated on pay out from age 65 - 81 (most likely). I will call this <strong>Act Amt</strong>.</p><p>The payout will be in today's dollars accounting for the <u>time value of money</u>.</p><p>For instance a 35 year old with 10 years in will receive not much ... maybe 20% of the Act Amt.</p><p>A 60 year old will receive probably 85% of the Act Amt.</p><p>A 55 year old 70% (figure 3% per year before full retirement age down to 40% at age 45 at which point it will flatten out but still trend downward as a total percent</p><p></p><p>Most likely, management and Non-union cannot be rolled over or deposited in a tax-deferred program. That was the case in the 2 previous buyouts.</p><p>Union pension ... hopefully it can be deposited into a tax-deferred program but I don't know.</p><p></p><p>Depending on how the current pension language is structured, it cannot be rolled into a tax-deferred program.</p><p></p><p>Pension payouts are usually used to get older active employees to early-retire (age 50 or later).</p><p>This Special Offer is a bit unusual and is driven by Wall St analysts wanting UPS to get rid of long-term debt obligations.</p><p>This will be a good-show effort by UPS with a reasonable actuarial pay-out.</p><p>You may not think it reasonable but the numbers do work out.</p><p>However, with interest rates being what they are, you will only be able to replace probably 40% with an annuity paying out the same as your pension at age 65.</p><p></p><p>Note: The above is based on my personal experience with UPS and investigation into pension payouts with AT&T, IBM and a few other Fortune 500 companies.</p></blockquote><p></p>
[QUOTE="Catatonic, post: 2384177, member: 7966"] [B]Brownmonster [/B]is right ... expect on the low end. I have been through 2 buyouts and it is definitely low-ball. The retirement payout will be based on the amount you would get at full retirement age (normally 65). It will be actuarially calculated on pay out from age 65 - 81 (most likely). I will call this [B]Act Amt[/B]. The payout will be in today's dollars accounting for the [U]time value of money[/U]. For instance a 35 year old with 10 years in will receive not much ... maybe 20% of the Act Amt. A 60 year old will receive probably 85% of the Act Amt. A 55 year old 70% (figure 3% per year before full retirement age down to 40% at age 45 at which point it will flatten out but still trend downward as a total percent Most likely, management and Non-union cannot be rolled over or deposited in a tax-deferred program. That was the case in the 2 previous buyouts. Union pension ... hopefully it can be deposited into a tax-deferred program but I don't know. Depending on how the current pension language is structured, it cannot be rolled into a tax-deferred program. Pension payouts are usually used to get older active employees to early-retire (age 50 or later). This Special Offer is a bit unusual and is driven by Wall St analysts wanting UPS to get rid of long-term debt obligations. This will be a good-show effort by UPS with a reasonable actuarial pay-out. You may not think it reasonable but the numbers do work out. However, with interest rates being what they are, you will only be able to replace probably 40% with an annuity paying out the same as your pension at age 65. Note: The above is based on my personal experience with UPS and investigation into pension payouts with AT&T, IBM and a few other Fortune 500 companies. [/QUOTE]
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