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UPS Retirement Topics
Is Central States pension fund ready to go under?
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<blockquote data-quote="JonFrum" data-source="post: 230783"><p>I'm not sure I can unravel these confusions you just created but I'll try.</p><p></p><p>UPS is not obligated to pay for 100% of the Plan's obligations, ($33 billion, to use your number,) as if it were the only contributing employer. It only must pay the *unpaid* portion of Consolidated Freightway's Withdrawal Liability. The total liability is only $318.7 million and it is being reduced every time a recovery is made in Bankruptcy Court. $45 million so far, more to follow.</p><p></p><p>The fund has a pool of assets of about $21 billion. That pool pays all current retirees and will pay all future retirees for some years to come. However, actuaries determine that at some *future* date a theoretical funding deficiency will occur if nothing is done, and so steps must be taken now to avoid that future deficiency. </p><p></p><p>No one is contributing a dollar but only withdrawing 63 cents, because the fund is only 63% funded. This just isn't how a pension plan works. This one of yours is too confusing to untangle. Sorry.</p><p></p><p>Incidently, as the plan recovers, benefit cuts may be gradually restored. Don't assume the cuts are permanent. Time will tell. Maybe the 2nd Quarter Report will give us a hint. Otherwise we will have to wait until the end of the year.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 230783"] I'm not sure I can unravel these confusions you just created but I'll try. UPS is not obligated to pay for 100% of the Plan's obligations, ($33 billion, to use your number,) as if it were the only contributing employer. It only must pay the *unpaid* portion of Consolidated Freightway's Withdrawal Liability. The total liability is only $318.7 million and it is being reduced every time a recovery is made in Bankruptcy Court. $45 million so far, more to follow. The fund has a pool of assets of about $21 billion. That pool pays all current retirees and will pay all future retirees for some years to come. However, actuaries determine that at some *future* date a theoretical funding deficiency will occur if nothing is done, and so steps must be taken now to avoid that future deficiency. No one is contributing a dollar but only withdrawing 63 cents, because the fund is only 63% funded. This just isn't how a pension plan works. This one of yours is too confusing to untangle. Sorry. Incidently, as the plan recovers, benefit cuts may be gradually restored. Don't assume the cuts are permanent. Time will tell. Maybe the 2nd Quarter Report will give us a hint. Otherwise we will have to wait until the end of the year. [/QUOTE]
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Is Central States pension fund ready to go under?
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