Central States Pension - UPS will not cover difference ?

[srvhero]

Why am I being told from the Union that UPS will cover our pensions after age 65 if Central States becomes insolvent? (They obviously will be) It clearly states in the contract that they will NOT. Looks as if those of us relying on Central States for a pension are *%it out of luck after age 65. Look out Health Care !


"The USP/IBT Plan will recognize full time service in the CS Plan for determining eligibility for the benefits in
this Section and will offset at Normal Retirement Age the benefits accrued from the CS Plan commencing at
Normal Retirement Age. If the benefit paid from the CS Plan is reduced as permitted or required by law, the
amount of such reduction shall not be included in this offset".

 

[pretender]

Why am I being told from the Union that UPS will cover our pensions after age 65 if Central States becomes insolvent? (They obviously will be) It clearly states in the contract that they will NOT. Looks as if those of us relying on Central States for a pension are *%it out of luck after age 65. Look out Health Care !


"The USP/IBT Plan will recognize full time service in the CS Plan for determining eligibility for the benefits in
this Section and will offset at Normal Retirement Age the benefits accrued from the CS Plan commencing at
Normal Retirement Age. If the benefit paid from the CS Plan is reduced as permitted or required by law, the
amount of such reduction shall not be included in this offset".

This was recently discussed in a different thread, so I decided to contact Atlanta for a clarification. I just received this response yesterday:



"Mr. XXXXXX,

If something happens to CS the UPS/IBT Plan will make up the difference in your monthly benefit even after age 65. I do apologize, but we do not have anything other than the Q AND A booklet that you already have to show."


I am still not sure what to believe, because it appears that the contract language contradicts that--Although, I don't think it is clearly stated, and I can interpret it both ways.

 

[serenity now]

Why am I being told from the Union that UPS will cover our pensions after age 65 if Central States becomes insolvent? (They obviously will be) It clearly states in the contract that they will NOT. Looks as if those of us relying on Central States for a pension are *%it out of luck after age 65. Look out Health Care !


"The USP/IBT Plan will recognize full time service in the CS Plan for determining eligibility for the benefits in
this Section and will offset at Normal Retirement Age the benefits accrued from the CS Plan commencing at
Normal Retirement Age. If the benefit paid from the CS Plan is reduced as permitted or required by law, the
amount of such reduction shall not be included in this offset".

i read this sentence as a negative way of saying: the full amount will be paid.


If the benefit paid from the CS Plan is reduced as permitted or required by law, the
amount of such reduction shall not be included in this offset".

*UPS/IBT will offset (cover) benefits accrued from the CS Plan at Normal Retirement Age
*if benefit from CS plan is reduced the amount of the reduction shall not be included in (part of) this offset

any real lawyers out there who would like to comment

 

[UpstateNYUPSer(Ret)]

I am not a lawyer but I did stay at a Holiday Inn Express over the weekend....

Suppose your pension is $3K/month and due to financial constraints the pension fund managers of CS vote to reduce their pension to $2.5K/month in order to protect the pension fund. UPS would then be obligated to make up the $500/month shortage; however, if CS is mandated by the Federal government to reduce their pension or if the fund defaults and is taken over by PBGC, which would severely reduce the pension to around $1.1K/month, UPS would not be obligated to make up the $1.9K shortfall.

The biggest problem facing most pension funds is the inverse ratio of actives and retirees. In a healthy fund there should be more money coming in than going out. In Upstate NY we have about 5,000 more retirees than actives. It doesn't take a math whiz to figure out that if you have more money going out that coming in that you are going to be in trouble. We are currently 51% funded; however, this figure includes last quarter of the 2008 financial turndown. Our BA told us that once this figure falls off the books that our pension fund should be in the upper 60% range and should only improve from there.

 

[Anonymous 10]

It's covered. Other than that I'm not saying anything else because the subject has been beat to death. Call your local, the international the trustees of the ups /Ibt plan or Atlanta and get your answer. Not a message board. Common sense people.

 

[UpstateNYUPSer(Ret)]

It's covered. Other than that I'm not saying anything else because the subject has been beat to death. Call your local, the international the trustees of the ups /Ibt plan or Atlanta and get your answer. Not a message board. Common sense people.

It's not covered if the pension fund defaults and is taken over by PBGC.

 

[serenity now]

It's not covered if the pension fund defaults and is taken over by PBGC.

and you know this, how?

 

[serenity now]

I am not a lawyer but I stayed at a Holiday Inn Express over the weekend....

Suppose your pension is $3K/month and due to financial constraints the pension fund managers of CS vote to reduce their pension to $2.5K/month in order to protect the pension fund. UPS would then be obligated to make up the $500/month shortage; however, if CS is mandated by the Federal government to reduce their pension or if the fund defaults and is taken over by PBGC, which would severely reduce the pension to around $1.1K/month, UPS would not be obligated to make up the $1.9K shortfall.

The biggest problem facing most pension funds is the inverse ratio of actives and retirees. In a healthy fund there should be more money coming in than going out. In Upstate NY we have about 5,000 more retirees than actives. It doesn't take a math whiz to figure out that if you have more money going out that coming in that you are going to be in trouble. We are currently 51% funded; however, this figure includes last quarter of the 2008 financial turndown. Our BA told us that once this figure falls off the books that our pension fund should be in the upper 60% range and should only improve from there.

fixed it for you, counselor

 

[Ms.PacMan]

and you know this, how?

There are pages of examples.....The full amount of your pension is paid by the IBT/UPS pension until age 65 (normal retirement age) - guaranteed. After age 65, plan participants who are also vested in the old CSPF will receive their pension payments in 2 checks - one from each fund.

The Plan works together with the CSPF to provide you a total retirement benefit based on your years of service in bothplans. If you begin receiving benefits before Normal Retirement Date, this Plan will pay the total benefit until your NormalRetirement Date. At Normal Retirement Date, your Plan benefit will be reduced by the value of the benefit that is payable​

by the CSPF at that date.

 

[BigUnionGuy]

It's covered.

Yep.

It's not covered if the pension fund defaults and is taken over by PBGC.

That assumption is wrong.

It was one of the "primary" consideration's, for allowing UPS to pay their withdraw liability to get out of Central States.

Nothing has changed.



​-Bug-

 

[Spicybrother]

Why am I being told from the Union that UPS will cover our pensions after age 65 if Central States becomes insolvent? (They obviously will be) It clearly states in the contract that they will NOT. Looks as if those of us relying on Central States for a pension are *%it out of luck after age 65. Look out Health Care !


"The USP/IBT Plan will recognize full time service in the CS Plan for determining eligibility for the benefits in
this Section and will offset at Normal Retirement Age the benefits accrued from the CS Plan commencing at
Normal Retirement Age. If the benefit paid from the CS Plan is reduced as permitted or required by law, the
amount of such reduction shall not be included in this offset".

As I understand it this is not the case. The accrued benefit is something else. IF you retire at age 62 I believe, you can receive an additional amount above the years of service pension. For example if you have 35 years of service under the current contract the payment is 3500. However if you are Normal Retirement age you can receive an additional sum, the accrued amount. My understanding is that if you look back at the amount paid into the pension over the years, UPS is not honoring the full payments to the pension under the current 35 and out, UNLESS you are full retirement age. So for a guy age 62 with 35 year might get an extra 275.00 added or some sum like that, the accrued amount to his check. It's the accrued amount that they will not guarantee if Central States fails. I've checked and double check and this is the best answer I could get. There is a formula for how this accrued amount is calculated.

 

[Ms.PacMan]

As I understand it this is not the case. The accrued benefit is something else. IF you retire at age 62 I believe, you can receive an additional amount above the years of service pension. For example if you have 35 years of service under the current contract the payment is 3500. However if you are Normal Retirement age you can receive an additional sum, the accrued amount. My understanding is that if you look back at the amount paid into the pension over the years, UPS is not honoring the full payments to the pension under the current 35 and out, UNLESS you are full retirement age. So for a guy age 62 with 35 year might get an extra 275.00 added or some sum like that, the accrued amount to his check. It's the accrued amount that they will not guarantee if Central States fails. I've checked and double check and this is the best answer I could get. There is a formula for how this accrued amount is calculated.

Spicy - benefits accrued from the CS plan are the number of service credits you had in before the new plan IBT/UPS plan. We all got a statement detailing how many pension credits we had accrued under the old plan - remember?

What you are talking about (confusing this with) is the contributory pension credits (1801 hrs per year) under the new IBT/UPS plan. The old CS plan gave a service pension credit for only one hr per week or month (don't know which without looking it up) and the new pension gives a full years credit for 1801 hrs worked (prorated if less than 1801). They agreed to figure it up both ways and pay the greater of the two. This has nothing to do with the paragraph you quoted.

The new pension deducts 6% for every year you are under 65 - it does not guarantee an "and out pension at any age" like the old CS pension The contributory pension pays more. Same contribution to the old and new plan but more money goes to the individual because it's a single employer plan vs. a big pot with a predetermined amount - $3,000, shared among many employees at different employers. So you end up earning a bigger pension even with the 6% deduction.

Under the old CS plan Joe, 52 and Ron, 61 both work 30 years and collected $3,000. Under the new IBT/UPS pension plan (never having worked under the CS plan) their 30 year pensions will not be identical because they will each take a 6% hit for every year they are under age 65.

The service pensions, AT ANY AGE, is the guarantee that UPS agreed to continue to pay (ignoring the 6% deduction) - up to normal retirement age (65). At age 65 we will all begin to receive one check from the IBT/UPS plan and one check from the CS plan. If the CS plan has either been taken over by PBGC or is allowed by Congress to reduce red zone pension plan pymts in 2015 then UPS will NOT offset this amount after age 65.

 

[GameCockFan]

Spicy - benefits accrued from the CS plan are the number of service credits you had in before the new plan IBT/UPS plan. We all got a statement detailing how many pension credits we had accrued under the old plan - remember?

What you are talking about (confusing this with) is the contributory pension credits (1801 hrs per year) under the new IBT/UPS plan. The old CS plan gave a service pension credit for only one hr per week or month (don't know which without looking it up) and the new pension gives a full years credit for 1801 hrs worked (prorated if less than 1801). They agreed to figure it up both ways and pay the greater of the two. This has nothing to do with the paragraph you quoted.

The new pension deducts 6% for every year you are under 65 - it does not guarantee an "and out pension at any age" like the old CS pension The contributory pension pays more. Same contribution to the old and new plan but more money goes to the individual because it's a single employer plan vs. a big pot with a predetermined amount - $3,000, shared among many employees at different employers. So you end up earning a bigger pension even with the 6% deduction.

Under the old CS plan Joe, 52 and Ron, 61 both work 30 years and collected $3,000. Under the new IBT/UPS pension plan (never having worked under the CS plan) their 30 year pensions will not be identical because they will each take a 6% hit for every year they are under age 65.

The service pensions, AT ANY AGE, is the guarantee that UPS agreed to continue to pay (ignoring the 6% deduction) - up to normal retirement age (65). At age 65 we will all begin to receive one check from the IBT/UPS plan and one check from the CS plan. If the CS plan has either been taken over by PBGC or is allowed by Congress to reduce red zone pension plan pymts in 2015 then UPS will NOT offset this amount after age 65.

Please provide some language from SPD to back this up.

 

[Ms.PacMan]

[/U]Please provide some language from SPD to back this up.

I posted the link to the SPD - read it. It gives upteen examples of people retiring before age 65 and getting their full "and out" pension. The examples also show that at age 65 you will start getting paid by both IBT/UPS and the old CS fund.

"this Plan will pay the total benefit until your Normal Retirement Date. At Normal Retirement Date, your Plan benefit will be reduced by the value of the benefit that is payable by the CSPF at that date"


"The USP/IBT Plan will recognize full time service in the CS Plan for determining eligibility for the benefits in
this Section (they will recognize full time service. It does not mention the 1801 hr minimum or age, so a person becomes eligible just like in the past - after 25 or 30 calendar years) and will offset at Normal Retirement Age the benefits accrued from the CS Plan commencing at Normal Retirement Age. (They promise to continue to pay up to or offset the benefit amount, say $3000, until CS is required to pay out their pension obligations at age 65 for the time you accrued in the CS plan) If the benefit paid from the CS Plan is reduced as permitted or required by law, the amount of such reduction shall not be included in this offset". (NOT is the key word in that sentence - nowhere in that SPD does it say that benefits will come solely from IBT/UPS after age 65, in fact it gives many, many examples showing how this will work)

If Central States remains solvent then it's all good. If the PGBC takes over the Central States pension our pension payments from CS will be reduced according to the law. But CS is telling Congress right now that the plan will be bankrupt in 9-12 years and wants to lower the payments in the next couple of years.

You will still get one pension check from the IBT/UPS pension plan for the number of years you worked under that plan, but the CS portion will be reduced, if they go bankrupt or get the law changed, and that portion of your pension, after age 65, will be the amount that is allowed by law. This is not in the SPD but it is what happens when pensions go broke.

I don't know how to explain it any better.

​

 

[balland chain]

[/U]Please provide some language from SPD to back this up.

​Under age 65 ?? I thought it was age 57 ??? Is the age 65 a new rule in TA ? Hell, I may not be retiring !

 

[reydluap]

We went over this topic back in Febuary. I still read the contract both ways. My BA still states that at age 65, Ups/IBT Plan pays their portion and CS pays their portion. If the CS plan is goverment reduced, our payment from CS will be reduced.


http://www.browncafe.com/forum/f71/what-you-guys-hearing-about-pension-held-central-states-348738/

 

[pretender]

We went over this topic back in Febuary. I still read the contract both ways. My BA still states that at age 65, Ups/IBT Plan pays their portion and CS pays their portion. If the CS plan is goverment reduced, our payment from CS will be reduced.


http://www.browncafe.com/forum/f71/what-you-guys-hearing-about-pension-held-central-states-348738/

I think we all agree with that, but the question is whether UPS will make up the difference in the reduction after the age of 65. There is quite a disagrement on this--Usually, in a thread like this, I look at who is providing answers, and side with the people whose opinions I value. However, in this case, I respect the opinions on both sides! So for now, I am going to rely on the Union Stewards and the response I received from Atlanta. It just would be nice if they had just spelled it out originally, instead of a one word answer in the Q&A brochure.

BTW--The answer by Spicy, regarding accrued vs. service makes a lot of sense. I don't know if he is right, but it seems logical that UPS would only make up the difference on the service pension, and not anything over and above that was accrued. Perhaps that is what is being referred to in the contract?

The good news for the young guys, is they won't have to worry about any of this. As time goes on, they will receive less and less from CS, and eventually UPS/IBT will pay the full benefit.

 

[Ms.PacMan]

BTW--The answer by Spicy, regarding accrued vs. service makes a lot of sense. I don't know if he is right, but it seems logical that UPS would only make up the difference on the service pension, and not anything over and above that was accrued. Perhaps that is what is being referred to in the contract?

The good news for the young guys, is they won't have to worry about any of this. As time goes on, they will receive less and less from CS, and eventually UPS/IBT will pay the full benefit.

I see what Spicy said as just the opposite - that UPS would let us earn pension credits under the new method but it is CS who has to honor the old service pension amounts after 65. I think it would have to be this way because legally a pension plan would have to follow their original guidelines. Plus, if they were going to guarantee the full amount until death, no matter what - that's what the SPD would say.

I agree that the new pension is much better and will work out great for new union employees. The best thing for a person to do is to look at the pension payouts you'll receive by playing around with the pension calculator. The calculator also shows what each fund will be liable for after you turn 65 and at least you will know the amount from CS that is in danger.

ttp://www.ibtupspensionfund.ups.com/Calculator.htm

 

[pretender]

I see what Spicy said as just the opposite - that UPS would let us earn pension credits under the new method but it is CS who has to honor the old service pension amounts after 65. I think it would have to be this way because legally a pension plan would have to follow their original guidelines. Plus, if they were going to guarantee the full amount until death, no matter what - that's what the SPD would say.

I agree that the new pension is much better and will work out great for new union employees. The best thing for a person to do is to look at the pension payouts you'll receive by playing around with the pension calculator. The calculator also shows what each fund will be liable for after you turn 65 and at least you will know the amount from CS that is in danger.

ttp://www.ibtupspensionfund.ups.com/Calculator.htm

I did the pension calculator last year, and the liability amounts were confirmed by the pension estimate I received from UPS/IBT. So--I decided to retire. It is only been recently that I became aware of the issue regarding liability after the age of 65.

One thing that definitely cannot be disputed is that there should not be any question about such a simple matter. The lack of support and knowldge I received from HR, when going through the retirment process was stunning. Just one example was vacation payoff--everyone I spoke with had a different answer. It was like I was the first one ever to retire from UPS; and I have heard others say the same.

 

[GameCockFan]

I've seen you post this several times. You're mistaken or not understanding it. If there is a reduction(there will definitely be one in the future), the reduction will not be included in the offset.

Q24: If the CSPF reduced the benefit I am receiving, would UPS make up the difference in my retirement benefit?
A: Yes.

The only time you would receive a benefit from CSPF is after normal retirement age. 65 or in some cases 62.