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UPS Retirement Topics
UPS Special Pension Buyout Offer - December 2016
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<blockquote data-quote="Bagels" data-source="post: 2389986" data-attributes="member: 43436"><p>You're wrong.</p><p></p><p>First off, the offer applies to a pair of company-sponsored plans, of which most participants are PTers and management. Most FTers are covered by Teamster-sponsored (and joint Teamster/company-sponsored) plans, but some may be covered by these two plans (I really don't know). And there's also a plethora of FTers like yourself with significant credit from their PT years in these company-sponsored plans.</p><p></p><p>Secondly, the law enables companies to tie the discount to an arbitrary corporate bonds discount rate. Here's an article from the WSJ discussion the near-8% discount rates calculated in pension buyout offers:</p><p><a href="http://www.wsj.com/articles/tax-policies-spur-companies-to-offer-pension-buyouts-1441667269" target="_blank">Tax Policies Spur Companies to Offer Pension Buyouts</a></p><p></p><p>Bottom line: unless you're in poor health, or have a family history of poor health, the pension buyout will not be a good deal. A conservative portfolio will not come close to achieving a return equal to the discount rate and there's a 50% chance you'll live past 83 (a number that keeps increasing).</p><p></p><p>Like I said, I recognize that most people will take the offer (and many will blow it within months rather than saving it toward retirement). That doesn't make it a good deal.</p></blockquote><p></p>
[QUOTE="Bagels, post: 2389986, member: 43436"] You're wrong. First off, the offer applies to a pair of company-sponsored plans, of which most participants are PTers and management. Most FTers are covered by Teamster-sponsored (and joint Teamster/company-sponsored) plans, but some may be covered by these two plans (I really don't know). And there's also a plethora of FTers like yourself with significant credit from their PT years in these company-sponsored plans. Secondly, the law enables companies to tie the discount to an arbitrary corporate bonds discount rate. Here's an article from the WSJ discussion the near-8% discount rates calculated in pension buyout offers: [URL='http://www.wsj.com/articles/tax-policies-spur-companies-to-offer-pension-buyouts-1441667269']Tax Policies Spur Companies to Offer Pension Buyouts[/URL] Bottom line: unless you're in poor health, or have a family history of poor health, the pension buyout will not be a good deal. A conservative portfolio will not come close to achieving a return equal to the discount rate and there's a 50% chance you'll live past 83 (a number that keeps increasing). Like I said, I recognize that most people will take the offer (and many will blow it within months rather than saving it toward retirement). That doesn't make it a good deal. [/QUOTE]
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