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FedEx 'Modernizing' Pension Plan
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<blockquote data-quote="Current FedEx Employee" data-source="post: 170431"><p>As a FedEx employee, I am upset that there is a capping of the existing pension plan as of May 31, 2008. The current plan takes the average of the 5 highest years salary multiplied times 2% per year of service. A 25 year vet gets 50% of their salary as a pension. To the company, this is an undefined benefit since they don't know how much they'll pay me when I retire since I could live 1 year or 20 years.</p><p>The new Portable Pension Account means the company will contribute a percentage of my salary (based on years of service + age) to an account every 3 months. I can choose how it's invested. It creates a fixed-benefit account that I can take as an annuity or lump-sum at retirement. I can roll it to another company if I leave FedEx. Bad part is I could outlive the PPA. I can't outlive the old pension plan.</p><p>Also, 401(k) matching increases from $500 (50% on 1st $1000) to 3.5% match to employee's 6% contribution.</p><p>Hope this helps explain things better.</p></blockquote><p></p>
[QUOTE="Current FedEx Employee, post: 170431"] As a FedEx employee, I am upset that there is a capping of the existing pension plan as of May 31, 2008. The current plan takes the average of the 5 highest years salary multiplied times 2% per year of service. A 25 year vet gets 50% of their salary as a pension. To the company, this is an undefined benefit since they don't know how much they'll pay me when I retire since I could live 1 year or 20 years. The new Portable Pension Account means the company will contribute a percentage of my salary (based on years of service + age) to an account every 3 months. I can choose how it's invested. It creates a fixed-benefit account that I can take as an annuity or lump-sum at retirement. I can roll it to another company if I leave FedEx. Bad part is I could outlive the PPA. I can't outlive the old pension plan. Also, 401(k) matching increases from $500 (50% on 1st $1000) to 3.5% match to employee's 6% contribution. Hope this helps explain things better. [/QUOTE]
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