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Brown Cafe UPS Forum
UPS Retirement Topics
UPS Special Pension Buyout Offer - December 2016
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<blockquote data-quote="Bagels" data-source="post: 2390743" data-attributes="member: 43436"><p>I project that UPS will use a 7-8% discount rate and insist that this is a "one-time" offer. But I doubt that will be the case. UPS' liabilities will increase as a result of the IRS' tables increasing the average lifespan, maintenance costs (PBGC premiums + administrative cost) will continue to swell, and interest rates will rise forcing UPS to put more money into the plan to meet its liabilities. I think it's inevitable that those who are smart enough to reject this offer will get a much sweeter one. UPS will want relief from the liability, and the present value of the next offer will be based on a larger dollar amount (given that UPS will have to account for a larger lifespan) and the discount rate will be policed (UPS won't be able to use an 8% rate when treasury rate is 2% max).</p></blockquote><p></p>
[QUOTE="Bagels, post: 2390743, member: 43436"] I project that UPS will use a 7-8% discount rate and insist that this is a "one-time" offer. But I doubt that will be the case. UPS' liabilities will increase as a result of the IRS' tables increasing the average lifespan, maintenance costs (PBGC premiums + administrative cost) will continue to swell, and interest rates will rise forcing UPS to put more money into the plan to meet its liabilities. I think it's inevitable that those who are smart enough to reject this offer will get a much sweeter one. UPS will want relief from the liability, and the present value of the next offer will be based on a larger dollar amount (given that UPS will have to account for a larger lifespan) and the discount rate will be policed (UPS won't be able to use an 8% rate when treasury rate is 2% max). [/QUOTE]
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UPS Special Pension Buyout Offer - December 2016
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