Managers and other salaried office staff were offered a buyout of their work contract because FedEx was overstaffed and was eliminating costs. If they allowed them to leave early without affecting their pensions, would still get a full pension if they chose to, that was an incentive to get them to take the cash lump sum to leave the company. Not the same thing as those today with traditional pensions being offered a lump sum instead of taking payments for the rest of their lives. Those at 52 15 years ago got a lump sum to leave, based on years of service, but they weren't getting their pensions until at least 55 if they chose to take them early.
Early Retirement Payout
- Thread starter NonyaBiznes
- Start date
Oldfart
Well-Known Member
The people I knew 15 years ago took a lump sum pay severance and began drawing their traditional as a 60 year old. I knew nobody that took a lump sum pension payment. I believe you might be getting confused. 52 year olds DID start their pension right then. They were given 8 years and retired as a 60 year old and were immediately eligible for their traditional payments. I believe 50 was the youngest you could be to retire as a 60 year old but I could be wrong. I had several siblings that did that buyout and I saw their paperwork.
Oldfart
Well-Known Member
Overstaffing was just part of the equation. The pension fund was way overfunded due to the fact that very few people had retired back then. Changes had to be made and funds had to be dispersed. The buyout was the answer.
If you Google "FedEx Offers Buyouts Journal of Commerce 2003" you'll see that there was a early retirement program for salaried employees who were at least 50 with at least 5 years. And there was a voluntary severance program which gave a lump sum offered to all salaried employees that gave a lump sum plus extra payments based on years of service. And all of this was a cost cutting measure according to FedEx because Express was overstaffed. So you were right on part of it, however what happened then is not the same as offering a lump sum option on the traditional pension now. What's happening now is FedEx retirees with a traditional pension now have the option of taking a lump sum payment. Considering many 55-60 year olds may live to 80 or more it would be a huge advantage to the company to have anyone elect that option.
Oldfart
Well-Known Member
I didn't say the 2 actions were similar. I just stated that the buyout 15 years ago was a result of a pension fund balance that was inflated. The latest offer is a benefit to the company because it saves them money. It is a benefit to SOME employees because the lump sum option benefits them. Continuing monthly payments benefits others. It is a win win situation in my opinion. I would not take a lump sum but every situation is different.
Well yeah, you did say they were similar. But hey, getting old myself, can't remember things like I used to.
Oldfart
Well-Known Member
LOL. Please brush up on your reading. I said the reason for the new offer might be a result of a rule or legislation change. I also said that was a reason for the previous buyout. The government agency that regulated pensions and retirements said the fund needed to make some payments. I NEVER said the lump sum offers were the same because there was no lump sum offer 15 years ago, just salary lump sum benefits. I also said everyone I knew in 2003 took their traditional as a monthly and their severance pay lump sum. You can spin it and twist it any way you want. You really don't know what you are talking about and you have twisted what I said just to make an argument. That's fine, do what you feel like you need to do.
UpstateNYUPSer(Ret)
Well-Known Member
The more recent pension buyout was the result of actuarial changes in the way pensions are calculated.
No chief, there's nothing out there about the pension being over funded. FedEx wanted to reduce it's workforce. I remember clearly them announcing that and everything online says that. The big thing that shocked them was how many jumped at the chance to leave. They had never laid off anyone, and at the time it was thought that if not enough people took them up on their offer they'd have to finally resort to a layoff. Ended up more than triple what they projected jumped at the chance and many stations ended up with not enough mgrs.
Oldfart
Well-Known Member
Whatever you say squaw. As usual you think you know what you are talking about but most of the time you have a slither of the facts. I will just let you keep believing you are right and I am wrong.
Online for anyone to see. I know it hurts to be wrong but you're going to have to accept you lived a sheltered existence all these years believing the pablum they fed you. At least when I'm shown I'm wrong I admit it. You were right about the early retirement part, but you just aren't aware of the rest.
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