Discussion in 'UPS Retirement Topics' started by rd0127, May 11, 2005.
Does this scare anyone else but me?
Delta employees as this airlines will file bankruptcy soon. I don't see UPS filing bankruptcy although some of the management folks would poor mouth like we're on the verge of it. LOL! Not IBT and CS might be another matter however.
I think its more likely the pension funds themselves will go under before UPS has a chance to withdraw. Although I do feel for the poor folks in the airline industry, as United Airline's competitors have already said that letting them shed their pension liability would give them an extra competitive edge. I see other airlines following suit, and more airline employees losing out big time.
I'm just hoping it doesn't become a trend with the rest of corporate America.
Watch General Motors going forward. Although not directly pension in itself, it's medical costs for current and retired employees is huge. There is more medical costs for current and retired employees built in a GM car than there is the cost of the steel to build it and it's growing. Couple that with the Japanese automakers who enjoy a nationalized health system over in Japan as you could say the Japanese makes may enjoy a kind of competitive edge similar to what DHL enjoys backed by the German Post Office. In the 90's when nationalizing our health system was being batted around it was reported GM got real wide eyed about this as they looked at their bottomline and saw a huge positive direct impact on earnings if this area was taken over by the gov't and funded with tax dollars. Can't remember the specifics now but it was huge as in like overnight GM stock would be like an internet high flyer but with real earnings to drive it instead of a promised concept. That has to be tempting to any business owner or manager when they see that. State of Georgia I believe is imposing a $40 per month premium on State employees who smoke for their health insurance coverage. Watch for more of this as the costs will begin to shift towards those who pose the biggest risks. I beleive healthcare costs are what is draining funds like Central States for example and maybe even United Airlines situation although I don't know their specifics. The dynamo stock market of the 90's help offset the growing problem but now the chickens have come home to roost. The answer?
Let me know when you find it!
It sounds like this <u>should be a concern</u> for the UPS pilots in their current contract negotiations. Something tells me, however, that they won't see it that way.
"...as the costs will begin to shift to those who pose the biggest risks".
If alcohol and tobacco were discovered today....they would be controlled substances. Have I ever smoked? Yes. I found the strength to quit even in the face of irrefutable evidence that smoking is bad for your health. There is nothing good about smoking and drinking. I got to watch my mom die of lung cancer that spread to her brain. Of course, she started smoking when it looked cool and was popular and the advertisements promoted it as a social grace.
I agree....those who indulge in unhealthy lifestyles should bear the costs of the consequences. Obesity, smoking and drinking can injure and/or kill.
(Message edited by trickpony1 on May 12, 2005)
What about the union pensions? I realize it is not exactly the same, but are they at risk? I am not union, but I know the teamsters have had some troubles in the past few years. Could they possibly get out of paying retirement to it's members through the court system?
In regards to United, I believe the pensions for all affected employees, regardless of job classification, are in the lap of the PBGC. Hard to tell for sure with all the complex wrangling going on at the present time.
If the CSPF were to default, from what I understand the PBGC would step in. An excerpt from the GAO's "Report to Congressional Requesters," on private pensions from March 2004, titled "Multiemployer Plans Face Short- and Long-Term Challenges" (GAO-04-423) states on pages 17 and 18:
"Agency officials told us that troubled plans often solicit their technical assistance since under the multiemployer framework, affected parties have a vested interest in a plan's survival. Occaisionally, PBGC is asked to serve as a facilitator where the agency works with all the parties associated with the troubled plan to improve its financial status. Examples of such assistance by PBGC include facilitating the merger of troubled plans into one stronger plan and the "orderly shutdown" of plans, allowing the affected employers to continue to operate and pay benefits until all liabilities are paid."
Furthermore, the "PBGC does not take over the administration of multiemployer plans, but instead, upon application, provides financial assistance in the form of loans when plans become insolvent and are unable to pay benefits at PBGC-guaranteed levels."
Having said all of the above however, I wouldn't be surprised if there are other multiple layers of complexity involved.
The PBGC did take over United's pension. The retirees and those planning to retire from United are looking at about one-third of their pension being cut now that the PBGC has it.
Look out Central States!
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