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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: 2391190" data-attributes="member: 43436"><p>The decision four years ago to let companies blend the rate with corporate bonds (in lieu of treasury) is directly responsible for the subsequent unprecedented buyout offers. But more informed people generally reject these offers -- over the summer, E&Y offered a buyout with a discount rate near 8%; virtually nobody took it. Shocking, huh?</p><p></p><p>UPS will use a similar discount rate. Do you know why? Because most people will take the offer. -- that's pretty clear from the vibe in this thread. For many, even an amount of $10K is a lot of money; they'll convince themselves that it's their money and that they deserve it, and they'll blow through the money before April 15, when they're told they owe an additional $2K (in additional to the $2K withheld) in taxes. They'll whine & cry when the IRS levies their assets, and then in several years when realization hits that they relinquished their pension, they'll come onto these forums and complain they got screwed.</p><p></p><p></p><p></p><p>At 4%, I might change my recommendation. The rate will be closer to twice that.</p><p></p><p></p><p></p><p>1) Your posting was directly targeted toward me, since I was one of only two people offering advice;</p><p>2) I'm a CPA, not a truck driver;</p><p>3) None of you are my clients and I could personally care less what decision you make. People pay me for my time and expertise, but I'm sharing it (in generalized form) to the community for those who desire to make an informed choice. Some people like yourself would take a case of beer and a blow-up doll and be happy -- that's your choice.</p></blockquote><p></p>
[QUOTE="Bagels, post: 2391190, member: 43436"] The decision four years ago to let companies blend the rate with corporate bonds (in lieu of treasury) is directly responsible for the subsequent unprecedented buyout offers. But more informed people generally reject these offers -- over the summer, E&Y offered a buyout with a discount rate near 8%; virtually nobody took it. Shocking, huh? UPS will use a similar discount rate. Do you know why? Because most people will take the offer. -- that's pretty clear from the vibe in this thread. For many, even an amount of $10K is a lot of money; they'll convince themselves that it's their money and that they deserve it, and they'll blow through the money before April 15, when they're told they owe an additional $2K (in additional to the $2K withheld) in taxes. They'll whine & cry when the IRS levies their assets, and then in several years when realization hits that they relinquished their pension, they'll come onto these forums and complain they got screwed. At 4%, I might change my recommendation. The rate will be closer to twice that. 1) Your posting was directly targeted toward me, since I was one of only two people offering advice; 2) I'm a CPA, not a truck driver; 3) None of you are my clients and I could personally care less what decision you make. People pay me for my time and expertise, but I'm sharing it (in generalized form) to the community for those who desire to make an informed choice. Some people like yourself would take a case of beer and a blow-up doll and be happy -- that's your choice. [/QUOTE]
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