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Central States fund invests $6.1 billion UPS payment
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<blockquote data-quote="wkmac" data-source="post: 306777" data-attributes="member: 2189"><p>Good point Tie but here's (JMO) what I think is going on. According to the article, CS took $5.4 bil to Mellon and the S&P, not all $6.1 bil so I'd guess that the $.7 bil was used for current and near term needs and placed in more ready/low risk investments for the more immediate payouts. The larger portion is invested in obviously greater risk but greater return assets to be used in years ahead when more of us who have years in CS will begin to retire. For me I'll have 26 years in CS and I'm another 13 years from starting that draw so that's 13 years to build for.</p><p> </p><p>The good news, UPSers who retire before age 65 years will draw no money from CS and so this gives time to CS to used the $6.1 bil to replenish itself so when we hit 65 and CS becomes primary, the funds are there at which time CS will move needed funds to short term low risk in order to meet the liability. </p><p> </p><p>I think UPS knows that had they let this thing go into 08' that the $6.1 bil figure would be cheap compared to what the gov't might order and the IBT also knew it was very real that the gov't would tell them that they toploaded the wage side on the last several contracts to boost up dues amounts to shore up the union's financial house. In turn, they would order some of our wages to be taken to shore up pension costs so that you had a perfect storm in effect. The company would be out probably close to $10 bil plus, the union having to reduce monthly dues because the UPS hourlies having to give up several dollars per hour (obviously graduated based on amount of time of service) to redirect to the pension fund and a workforce pissed to no end at both the company and the union as they look for someone to blame. At least that's how I see it anyway. I know those outside the CS area are not happy about the delay payraise and I happen to believe they have every right to be that way. These guys are being punished for something beyond them but that aside, I believe had things been left on their own and ERISA had kicked in, that $.35 annual 6 month delay for the contract (progressive increase not withstanding) wage pay would look like chump change. I don't think it impossible to have seen a minimum of a $2 plus wage transfer to the pension across the board so IMO what looks bad now could have really looked a lot worse.</p><p> </p><p>Barring real market and economic difficulties over the next 15 to 20 years as the bulk of this amount is left to grow, this solution may workout pretty good for both sides. CS when a lot of us in 15 or so year start hitting 65 may be in position to handle our entire pension payouts and UPS is completely off the hook under some scenarios. UPS in the meantime covers a lot of upfront costs but wins on the backend as they control all the pension in about 25 years as it relates to CS and there is no more connection so to speak. </p><p> </p><p>It was a rather creative solution in which CS was put in postiion to get itself back on track but over the longhaul UPS gets completely out from under this multi-employer pension plan that they've been wanting to for years. </p><p> </p><p>As to specific locals having problems and rumors of? If they are under the 80% funding threshold, it's probable that the heat is on.</p><p> </p><p>BTW Tie: Good to see you posting again and I mean that!</p><p> </p><p>It got so bad that Trick and 705 had to go on meds for depression they missed you so bad!</p><p><img src="/community/styles/default/xenforo/smilies/FeltTip/happy-very.png" class="smilie" loading="lazy" alt=":happy-very:" title="Happy Very :happy-very:" data-shortname=":happy-very:" /><img src="/community/styles/default/xenforo/smilies/FeltTip/wink.png" class="smilie" loading="lazy" alt=":wink2:" title="Wink :wink2:" data-shortname=":wink2:" /></p></blockquote><p></p>
[QUOTE="wkmac, post: 306777, member: 2189"] Good point Tie but here's (JMO) what I think is going on. According to the article, CS took $5.4 bil to Mellon and the S&P, not all $6.1 bil so I'd guess that the $.7 bil was used for current and near term needs and placed in more ready/low risk investments for the more immediate payouts. The larger portion is invested in obviously greater risk but greater return assets to be used in years ahead when more of us who have years in CS will begin to retire. For me I'll have 26 years in CS and I'm another 13 years from starting that draw so that's 13 years to build for. The good news, UPSers who retire before age 65 years will draw no money from CS and so this gives time to CS to used the $6.1 bil to replenish itself so when we hit 65 and CS becomes primary, the funds are there at which time CS will move needed funds to short term low risk in order to meet the liability. I think UPS knows that had they let this thing go into 08' that the $6.1 bil figure would be cheap compared to what the gov't might order and the IBT also knew it was very real that the gov't would tell them that they toploaded the wage side on the last several contracts to boost up dues amounts to shore up the union's financial house. In turn, they would order some of our wages to be taken to shore up pension costs so that you had a perfect storm in effect. The company would be out probably close to $10 bil plus, the union having to reduce monthly dues because the UPS hourlies having to give up several dollars per hour (obviously graduated based on amount of time of service) to redirect to the pension fund and a workforce pissed to no end at both the company and the union as they look for someone to blame. At least that's how I see it anyway. I know those outside the CS area are not happy about the delay payraise and I happen to believe they have every right to be that way. These guys are being punished for something beyond them but that aside, I believe had things been left on their own and ERISA had kicked in, that $.35 annual 6 month delay for the contract (progressive increase not withstanding) wage pay would look like chump change. I don't think it impossible to have seen a minimum of a $2 plus wage transfer to the pension across the board so IMO what looks bad now could have really looked a lot worse. Barring real market and economic difficulties over the next 15 to 20 years as the bulk of this amount is left to grow, this solution may workout pretty good for both sides. CS when a lot of us in 15 or so year start hitting 65 may be in position to handle our entire pension payouts and UPS is completely off the hook under some scenarios. UPS in the meantime covers a lot of upfront costs but wins on the backend as they control all the pension in about 25 years as it relates to CS and there is no more connection so to speak. It was a rather creative solution in which CS was put in postiion to get itself back on track but over the longhaul UPS gets completely out from under this multi-employer pension plan that they've been wanting to for years. As to specific locals having problems and rumors of? If they are under the 80% funding threshold, it's probable that the heat is on. BTW Tie: Good to see you posting again and I mean that! It got so bad that Trick and 705 had to go on meds for depression they missed you so bad! :happy-very::wink2: [/QUOTE]
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