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<blockquote data-quote="JonFrum" data-source="post: 574236" data-attributes="member: 18044"><p>In theory, yes.</p><p> </p><p>Under normal conditions all companies contribute at least 100% of the monies needed to fully fund their employees' future retirement. The Fund is at least 100% funded to begin with, and stays 100% funded over the years, as the employees complete their careers and then enjoy their retirement. Any drops in the markets are made up for by subsequent raises in the markets. Any companies that go out of business have left behind a fully funded pool of contributions that will provide for their employees' retirement.</p><p> </p><p>Unfortunately the reality is like this. Many Teamster multi-employer funds <u>deliberately</u> seek to be only about 80% funded. The other 20% is <u>owed</u> by the contributing employers, but not owed right now.</p><p> </p><p>Many funds optimistically (foolishly) assume the markets will always go up, and they will make 8.5% on their asset pool, on average, year after year. Actual losses are unthinkable.</p><p> </p><p>When a company goes out of business, it owes pro rated Liability Withdrawal Payments to the fund. That's the difference between the actual funding level of the fund, and the 100% funding level. So it would owe about 20% in "normal" times, and maybe 45% or so now, because the markets have dropped and fund assets have shrunk. (UPS paid a $6.1 billion Withdrawal Liability Payment to Central States in Dec. of 2007. It would have been even more if they waited until 2008 to withdraw because the funding level had dropped even further by then. That's why the rush to ratify the Contract more than seven months early.)</p><p> </p><p><strong>The remaining contributing companies have to pay whatever Withdrawal Liability the bankrupt companies owed but didn't pay.</strong></p></blockquote><p></p>
[QUOTE="JonFrum, post: 574236, member: 18044"] In theory, yes. Under normal conditions all companies contribute at least 100% of the monies needed to fully fund their employees' future retirement. The Fund is at least 100% funded to begin with, and stays 100% funded over the years, as the employees complete their careers and then enjoy their retirement. Any drops in the markets are made up for by subsequent raises in the markets. Any companies that go out of business have left behind a fully funded pool of contributions that will provide for their employees' retirement. Unfortunately the reality is like this. Many Teamster multi-employer funds [U]deliberately[/U] seek to be only about 80% funded. The other 20% is [U]owed[/U] by the contributing employers, but not owed right now. Many funds optimistically (foolishly) assume the markets will always go up, and they will make 8.5% on their asset pool, on average, year after year. Actual losses are unthinkable. When a company goes out of business, it owes pro rated Liability Withdrawal Payments to the fund. That's the difference between the actual funding level of the fund, and the 100% funding level. So it would owe about 20% in "normal" times, and maybe 45% or so now, because the markets have dropped and fund assets have shrunk. (UPS paid a $6.1 billion Withdrawal Liability Payment to Central States in Dec. of 2007. It would have been even more if they waited until 2008 to withdraw because the funding level had dropped even further by then. That's why the rush to ratify the Contract more than seven months early.) [B]The remaining contributing companies have to pay whatever Withdrawal Liability the bankrupt companies owed but didn't pay.[/B] [/QUOTE]
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