Youngsters Retirement

Karma...

Well-Known Member
The fact that one forfeits all portions of ones mip earned but not received if that person leaves prior to retirement is hardly termed a great "portable pension"....this is especially true considering the now non-match 401k and the low match 401k when there was a match.
 

pretzel_man

Well-Known Member
Much of this is companies jumping on the bandwagon. Only in the last few years have companies started charging employees for healthcare. Apparently the rates stayed the same for the prior 50 years and only started jumping recently. The day the first company required the employee to kick in it was all over. Maybe if employers would demand that insurers stop raising rates instead of passing them along to their employees the rate hikes would slow. 401K is basically the end of retirement income for most people. Matching 2 or 3 percent of a contribution? Wow.

All it takes is a quick search to see that health care cost increases are not a UPS issue. Its a nationwide issue.

According to CBS News: "premiums continue to rise sharply. Since 1999, they have increased 131 percent"

According to a study by Kaiser: "Health care costs have been rising for several years. Expenditures in the United States on health care surpassed $2.3 trillion in 2008, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980. Stemming this growth has become a major policy priority, as the government, employers, and consumers increasingly struggle to keep up with health care costs. "

To blame this on companies "jumping on the bandwagon" is not reasonable.

It would be nice if it was as easy as "demand that insurers stop raising rates ".
 

pretzel_man

Well-Known Member
Nope, not sure. That's why I said "I think." The general perception in my area is that they get no pension. Oddly, I can't find and information through UPS sources (UPSers). It may have been covered in the summary plan description disc. The summary plan desc is no longer posted.

I did find some information on the internet that supports what you said. It appears that the get a percentage of their compensation contributed to an annuity type plan based upon "points" Points are a combination of age and years of service. schedule A. Too much to read

http://www.wikinvest.com/stock/Unit...tirement_Plan,_As_Amended_and_Restated/D30143
Portable Account
Points as of January 1
Portable Account
Formula Schedule A
Portable Account
Formula Schedule B
Less than 35 5.0% 2.5%35-54 6.0% 3.0%55-74 7.0% 4.0%75 or more 8.0%


I stand corrected, I think...



I stand corrected on the Portable pension. I agree that overall our compensation is pretty good, however I find the "positive" spin placed upon the changes that result in reductions to be insulting and dishonest by omission in most cases.

I like to think of my "pessimism" as openly honest with a reality "spin."

I certainly do not think you would have posted inaccurate information purposely.

On the other hand, you said "I think" in one sentence and then spent 3 paragraphs on how they are being taken advantage of.

Is your position really balanced, or are you looking for facts to support a one sided opinion?

While you call yourself as having a reality spin, you call others who post facts dishonest....
 

Bubblehead

My Senior Picture
All it takes is a quick search to see that health care cost increases are not a UPS issue. Its a nationwide issue.

According to CBS News: "premiums continue to rise sharply. Since 1999, they have increased 131 percent"

According to a study by Kaiser: "Health care costs have been rising for several years. Expenditures in the United States on health care surpassed $2.3 trillion in 2008, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980. Stemming this growth has become a major policy priority, as the government, employers, and consumers increasingly struggle to keep up with health care costs. "

To blame this on companies "jumping on the bandwagon" is not reasonable.

It would be nice if it was as easy as "demand that insurers stop raising rates ".

Reminds me of the outrageous increase in salaries and other compensations of upper level corporate executives over the past few decades.
Another exorbitant cost being shouldered by front line worker.
 

pretzel_man

Well-Known Member
The fact that one forfeits all portions of ones mip earned but not received if that person leaves prior to retirement is hardly termed a great "portable pension"....this is especially true considering the now non-match 401k and the low match 401k when there was a match.

The MIP is not related to the pension. They are two different issues. As far as I can see, the pension is fully portable.

Yes, the MIP changed. I heard Mike Eskew talk about that personally in a meeting. He said that the MIP change absolutely had to do with the company going public. He said it should have been done day one, and not have waited until much afterward.

With the MIP, there were two major changes. First the change from a flat 15% to a more subjective decision. The second was the change to the 50% RSU's.

The first give the MC control like Mike alluded to. There is no doubt that the second change incented people to stay (or penalized them for leaving). That penalty for leaving is approximatey 3 to 6 months pay (depending on grade and payout).

BTW, that penalty is what division managers had with options forever.

As far as the match goes, my first 25 years, there was no match.

Finally, there is no doubt that management is not nearly as well off today as 25 years ago. There is no way as far as I know to compare the direct compensation. The major different is the growth in stock price. People didn't get rich because they had 15% MIP or because there was a 401K match, or because of hughe raises. It was because the stock grew.

Without growth, none of those things will matter.
 

Karma...

Well-Known Member
The MIP is not related to the pension. They are two different issues. As far as I can see, the pension is fully portable.

Yes, the MIP changed. I heard Mike Eskew talk about that personally in a meeting. He said that the MIP change absolutely had to do with the company going public. He said it should have been done day one, and not have waited until much afterward.

With the MIP, there were two major changes. First the change from a flat 15% to a more subjective decision. The second was the change to the 50% RSU's.

The first give the MC control like Mike alluded to. There is no doubt that the second change incented people to stay (or penalized them for leaving). That penalty for leaving is approximatey 3 to 6 months pay (depending on grade and payout).

BTW, that penalty is what division managers had with options forever.

As far as the match goes, my first 25 years, there was no match.

Finally, there is no doubt that management is not nearly as well off today as 25 years ago. There is no way as far as I know to compare the direct compensation. The major different is the growth in stock price. People didn't get rich because they had 15% MIP or because there was a 401K match, or because of hughe raises. It was because the stock grew.

Without growth, none of those things will matter.
The mip was always seen as ones main part of the pension to the extent one could not easily sell prior to a tense talk with ones district manager ( with corresponding consequences).....the understanding that since the amount of the defined pension was low one was expected ( if one was a good partner) to not sell until one year past retirement and then 10% per year.....doing that and coupled with the rise in stock price one would essentially have as the last payment the original amount at retirement.....add up the annual defined pension amount, 10% sell back and the dividends and that equalled an excellent retirement.....i wont even mention the opl fiasco with the refunded fines going to the teamsters contract.......the differentiated days where ups was certainly held in the highest esteem are gone for good.........the tone now is " not my job" and " you get what you pay for".......the days of private ups when once one was lucky enough to be made full time management you were expect to and you committed yourself to retire from ups was the glue that held us together due to continuity, culture and committments.......public ups seems to want a revolving door of lower management and partnership starts at the division level.....the uneven handling and appication of the great transformation of 2010 was a case in point...what other enhancements can one expect down the line starting in 2011 ?
 

pretzel_man

Well-Known Member
The mip was always seen as ones main part of the pension to the extent one could not easily sell prior to a tense talk with ones district manager ( with corresponding consequences).....the understanding that since the amount of the defined pension was low one was expected ( if one was a good partner) to not sell until one year past retirement and then 10% per year.....doing that and coupled with the rise in stock price one would essentially have as the last payment the original amount at retirement.....add up the annual defined pension amount, 10% sell back and the dividends and that equalled an excellent retirement.....i wont even mention the opl fiasco with the refunded fines going to the teamsters contract.......the differentiated days where ups was certainly held in the highest esteem are gone for good.........the tone now is " not my job" and " you get what you pay for".......the days of private ups when once one was lucky enough to be made full time management you were expect to and you committed yourself to retire from ups was the glue that held us together due to continuity, culture and committments.......public ups seems to want a revolving door of lower management and partnership starts at the division level.....the uneven handling and appication of the great transformation of 2010 was a case in point...what other enhancements can one expect down the line starting in 2011 ?

Everything you mention is accurate (except for the tone).

Everything is also related to the lack of stock growth.

UPS Stock as a main retirement source only worked if the stock grew. Not based on the payout. Look historically. Those that made lots of money didn't get huge MIP payouts. It was the stock growth that did so.

Look at division managers. They got weatlthy because stock grew. A large amount of their compensation was based on stock grwoth. Today's division managers do not have that.

As you say, you were strictly warned to not sell stock. You were told to pretend that MIP didn't exist and to live off your salary alone.....

The concept of compounding interest still is valid (putting all one's eggs in the UPS based it not anymore).

So, what are you (or others) doing with their MIP award? Of course, 50% is forced into UPS stock. How about the other 50%?

Way too many people take the award in cash. Hopefully they put it into some investment. Personally, I doubt it.

While I do not like UPS being publice, public or private without profit growth, stock will not grow. Its the growth that is needed.
 

hangin455

Well-Known Member
Just curious - what do you think the stock price would be had the company stayed private?
Any chance that they'll ever up the pension amount as the stock is no longer your primary retirement saving?
 

pretzel_man

Well-Known Member
Just curious - what do you think the stock price would be had the company stayed private?
Any chance that they'll ever up the pension amount as the stock is no longer your primary retirement saving?

If we were still private, our stock would be about 1/4 to 1/3 LOWER than today.

While most people think this is not true, here is the logic.

As a private company, UPS ran a Price to Earnings (PE) ratio of about 12 to 15.

As a public company, we are running between 18 and 21. I think we are currently about 20.

If we were private and valued at a 15 PE (which is high), we would be about 1/4 less than public. At a 13 PE (about the average), we would be 1/3 less than today.

Of course, this is assuming that earnings as a private company would be the same as a public company. One could argue that it would be higher or lower....

Even though the stock would be lower as a private company, I would have preferred that. The stock would be a safer investment and would have at least seen slow / consistent growth instead of 10 years of no growth.
 

hangin455

Well-Known Member
Was P/E ever taken into account when the board used to set the stock price? I know this is all speculative but I never really thought the price was set by anyhthing other than " are we making money now? and will we continue to do so at the current rate?"
 

pretzel_man

Well-Known Member
Was P/E ever taken into account when the board used to set the stock price? I know this is all speculative but I never really thought the price was set by anyhthing other than " are we making money now? and will we continue to do so at the current rate?"

Of course..... In their old releases, they said they looked at current and future conditions.

It always flucuated at between 12 and 15. Prior to going public, I was in a meeting with Bob Stoffel. He explained that in order for the stock to grow, profit needed to grow. He explained the P/E calculations.....

Before that meeting, I thought exactly like you said. I figured that we made lots of money and that stock would grow because we would make the same amount. Bob explained that if profit didn't grow, stock would not grow. Again, this was before goig public.

What happened is that after going public, we had a huge P/E. I think we were like 29+. So, when profits grew, the P/E shrunk. The growth wasn't what the street wanted, so P/E got lower...

If we were private, we would have had BOTH earnings growth and stock growth (even if the stock was lower). Personally, I would have preferred that.
 

Popeye

Well-Known Member
it looks like the then ceo & board took the money and skeedaddled off into the sunset !!!

Yes they did. Especially the two who dramatically increased their UPS holdings in the year before the IPO. One of whom was the CFO who got the whole IPO idea rolling. Just a coincidence I'm sure. SOBs should be in prison, but instead they're livin' large.
 
Much of this is companies jumping on the bandwagon. Only in the last few years have companies started charging employees for healthcare. Apparently the rates stayed the same for the prior 50 years and only started jumping recently. The day the first company required the employee to kick in it was all over. Maybe if employers would demand that insurers stop raising rates instead of passing them along to their employees the rate hikes would slow. 401K is basically the end of retirement income for most people. Matching 2 or 3 percent of a contribution? Wow.

Brownmonster:

Your statement that only in the last few years have companies starting charging employees for healthcare doesn't jive with my experience. Every job I have held has required me to contribute, either towards the premiums or at the point of service. Also, rates have not only started jumping recently. This has been the trend for at least the past 20 years if not longer. Health insurance plans have been adjusting to try and compensate for the rising cost of health care for a long time now. It used to be that most plans were indemnity plans, where you can go to whatever doctor you wanted, the doctor could charge what they wanted, and you'd pay some percentage. Then in the early 90's, plans started shifting towards managed care and HMO's because these indemnity plans were costing companies a lot of money. People rebelled against not having a choice of doctors, so HMO's fell by the wayside and now we have a PPO plan where you still have a choice but if you go to a network doctor, you pay less.

Also, in UPS's case, it has nothing to do with the insurance companies raising rates. You do realize that UPS self-insures, meaning that the insurance company is just there to administer the plan and UPS pays the claims.

What I am trying to convey here is that raising health care costs aren't because of greedy insurance companies or because UPS is trying to screw us. All companies are facing down the problem of expensive health care these days. The problem, the way I see it, is you and me. We all want to have access to whatever doctors, whatever tests, whatever technologies we want, no matter what the cost, and we all want to pay nothing in health insurance premiums for the priviledge. On top of that, we all want to keep smoking, consuming unhealthy foods, sit on our backsides all day, and generally not take care of ourselves.

The bottom line is that either we can pay more for insurance, accept fewer choices, or take better care of ourselves. However, when any company tries to make the hard choice by raising our costs, we all complain about it. Sorry but there is no such thing as a free lunch here, Brownhound.
 

pretzel_man

Well-Known Member
it looks like the then ceo & board took the money and skeedaddled off into the sunset !!!

Yes they did. Especially the two who dramatically increased their UPS holdings in the year before the IPO. One of whom was the CFO who got the whole IPO idea rolling. Just a coincidence I'm sure. SOBs should be in prison, but instead they're livin' large.

Do you have any facts to back up those allegations of criminal activity?

If so, the SEC may want to know. Using insider information is illegal.

Unless they exercised their stock options like many did back then.
 

Coldworld

60 months and counting
Brownmonster:

Your statement that only in the last few years have companies starting charging employees for healthcare doesn't jive with my experience. Every job I have held has required me to contribute, either towards the premiums or at the point of service. Also, rates have not only started jumping recently. This has been the trend for at least the past 20 years if not longer. Health insurance plans have been adjusting to try and compensate for the rising cost of health care for a long time now. It used to be that most plans were indemnity plans, where you can go to whatever doctor you wanted, the doctor could charge what they wanted, and you'd pay some percentage. Then in the early 90's, plans started shifting towards managed care and HMO's because these indemnity plans were costing companies a lot of money. People rebelled against not having a choice of doctors, so HMO's fell by the wayside and now we have a PPO plan where you still have a choice but if you go to a network doctor, you pay less.

Also, in UPS's case, it has nothing to do with the insurance companies raising rates. You do realize that UPS self-insures, meaning that the insurance company is just there to administer the plan and UPS pays the claims.

What I am trying to convey here is that raising health care costs aren't because of greedy insurance companies or because UPS is trying to screw us. All companies are facing down the problem of expensive health care these days. The problem, the way I see it, is you and me. We all want to have access to whatever doctors, whatever tests, whatever technologies we want, no matter what the cost, and we all want to pay nothing in health insurance premiums for the priviledge. On top of that, we all want to keep smoking, consuming unhealthy foods, sit on our backsides all day, and generally not take care of ourselves.

The bottom line is that either we can pay more for insurance, accept fewer choices, or take better care of ourselves. However, when any company tries to make the hard choice by raising our costs, we all complain about it. Sorry but there is no such thing as a free lunch here, Brownhound.

Question...if health care is going through the roof why wouldnt ups take 2 part time jobs meaning two different health care packages and turn this into one 8 hr job and one health care plan....
 

Coldworld

60 months and counting
Not every part timer is 18. Pay 1 full time inside employee 10 dollars an hour with healthcare or 2 employees 10 dollars an hour each with their own healthcare. Doesn't ups pay the same if an employee uses the healthcare or not....might want to check on that one
 

brownmonster

Man of Great Wisdom
Not every part timer is 18. Pay 1 full time inside employee 10 dollars an hour with healthcare or 2 employees 10 dollars an hour each with their own healthcare. Doesn't ups pay the same if an employee uses the healthcare or not....might want to check on that one

That would depend if an employee is with a UPS plan or a Teamster plan. The Teamster plan UPS contributes a set amount per employee. The UPS plan from what I hear is self insured so they don't have to actually write a check per employee. If they don't use the plan, no cost to UPS.
 
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