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Is Central States pension fund ready to go under?
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<blockquote data-quote="JonFrum" data-source="post: 231162"><p><span style="color: blue">I think I see the problem now you just don't understand simple finance. Let me splain it to you lucy. Fund per your number is 63 percent funded. Per others 49 but I'll use yours so we don't get sidetracked into more gobldy gook. K.</span></p><p>Actually I accept both numbers. The 49% funding level is from the 2005 Form 5500, based on the Fund's status on January 1, 2004. As such it is an old number. Even the 63% figure is getting old, but it is the most recent official number. My quess is the Fund is even better funded than 63% but that is just based on the rise in the stock market since the 63% figure was calculated. Ideally, we should use the most up-to-date number available.</p><p></p><p><span style="color: #0000ff">fund should be 100 percent funded. its 63 per your number.</span> </p><p>Actually, I believe the Fund should be 120 - 140% funded. As I've explained in the past, if 100% funding is the goal, you need to overfund so you are prepared for the inevitable rainy days and stock market crashes.</p><p></p><p><span style="color: #0000ff">Now UPS didn't shortchange the plan. They put in everything they are supposed to put in. Thus the example of putting in a dollar and checking the account to find 63 cents. Now try to focus on that for a minute instead of running off into another direction of misinformation. Who took the 37 cents we are missing per your number. </span></p><p>No one "took the 37 cents." UPS contributes what it is contractually obligated to contribute. You are deluded if you think that somehow equates to 100%. It doesn't. It's like buying a house with only 63% down, and the rest you'll pay later. You can't decide the following day to look into the seller's wallet and expect to see that your check for 63% of the cost of the house, has magically increased to 100% of the cost. What UPS contributes DOES NOT equal full funding. You're assuming it does, and you are wrong. The trustees set a benefit schedule, and, as a seperate matter, they set a contribution schedule. They usually set the benefit schedule higher than the contribution schedule. It's as if UPS is buying the full house, but puting less than the full purchase price down as a downpayment. The full funding level is the sum of UPS contributions *PLUS* UPS' Withdrawal Liability, not UPS' contributions alone. [ Note: the funding level varies daily as the market value of the Fund's assets ebb and flow, and as the fund's acturarial characteristics change. It wouldn't be a constant 63%, but I'll use 63% to keep things simple.]</p><p> </p><p><span style="color: #0000ff">Point two . The fund is 37 percent short per your number. </span></p><p>No. UPS just hasn't paid the remaining 37 cents that they owe yet. If they withdraw, the Law will compel them to. If they don't withdraw, they may pay it through higher contributions, or perhaps the stock market will soar and make up the shortfall for them. Or (prior to the passage of the pension reform act,) maybe the trustees would have just allowed the fund to remain less than 100% funded.</p><p></p><p></p><p><span style="color: #0000ff">That 37 percent would have paid for someones retirement money in the future. Instead its paying someones retirement today. Or someone today is short 37 percent in which case ups's money is paying for them. Anyway you add it up.</span></p><p>A dollar contributed today by UPS would have to wait its place in line behind the 21,000,000,000 other dollars that are already in line, waiting in the asset pool, to be paid out to current retirees and future retirees for some years to come. No one is shortchanged by 37 cents. No one is retireing from another company and receiving the 37 cents. At the risk of sounding like Morpheus, there is no 37 cents. It's all in your mind. The Matrix isn't real. </p><p> </p><p><span style="color: #0000ff">UPS is paying 100 percent of what they are obligated to pay today into the fund thus the dollar. </span></p><p>Yes, but that 100% is 100% of what the Contract says UPS must contribute. It may be only 63% of what Full Funding would demand. Hence the $6 billion *also* owed by UPS as Withdrawal Liability!!!!</p><p> </p><p><span style="color: #0000ff">But when they look at their bank statement they only had 63 percent in the account per your number. </span></p><p> Because that's all they "put down." If UPS (and every other Contributing Employer) wanted to contribute enough to bring Central States to Full Funding, they all should have made their usual contribution, and also paid their Withdrawal Liability in full ( with or without withdrawing.) Just like if you buy a house with 63% down and then toss in the other 37% as well. Now THAT'S 100% funding!!! </p><p></p><p><span style="color: #0000ff">Therefore either some retiree from some other company took the 37 cents or we are paying todays bills with tommorrows money. </span></p><p>Neither.</p><p> </p><p><span style="color: #0000ff">If you're going to try to promote yourself as a pension expert then you must learn to progress past simple math. </span></p><p>Never said I was a pension expert. This is just the latest instance of you putting words in my mouth and attributing attitudes and opinions to me.</p><p> </p><p><span style="color: #0000ff">Now when you answer this post try to focus on that point only. I don't need any assets or actuaries in the discussion. Keep it simple is it other retirees taking my 37 cents or are we paying todays bills with tommorrows money. </span></p><p>Neither. I'm afraid you're not ready. You're thinking is stuck in the Matrix. Try to understand; there is no 37 cents. Free your mind, CopperTop. Think outside the Parcel.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 231162"] [COLOR=blue]I think I see the problem now you just don't understand simple finance. Let me splain it to you lucy. Fund per your number is 63 percent funded. Per others 49 but I'll use yours so we don't get sidetracked into more gobldy gook. K.[/COLOR] Actually I accept both numbers. The 49% funding level is from the 2005 Form 5500, based on the Fund's status on January 1, 2004. As such it is an old number. Even the 63% figure is getting old, but it is the most recent official number. My quess is the Fund is even better funded than 63% but that is just based on the rise in the stock market since the 63% figure was calculated. Ideally, we should use the most up-to-date number available. [COLOR=#0000ff]fund should be 100 percent funded. its 63 per your number.[/COLOR] Actually, I believe the Fund should be 120 - 140% funded. As I've explained in the past, if 100% funding is the goal, you need to overfund so you are prepared for the inevitable rainy days and stock market crashes. [COLOR=#0000ff]Now UPS didn't shortchange the plan. They put in everything they are supposed to put in. Thus the example of putting in a dollar and checking the account to find 63 cents. Now try to focus on that for a minute instead of running off into another direction of misinformation. Who took the 37 cents we are missing per your number. [/COLOR] No one "took the 37 cents." UPS contributes what it is contractually obligated to contribute. You are deluded if you think that somehow equates to 100%. It doesn't. It's like buying a house with only 63% down, and the rest you'll pay later. You can't decide the following day to look into the seller's wallet and expect to see that your check for 63% of the cost of the house, has magically increased to 100% of the cost. What UPS contributes DOES NOT equal full funding. You're assuming it does, and you are wrong. The trustees set a benefit schedule, and, as a seperate matter, they set a contribution schedule. They usually set the benefit schedule higher than the contribution schedule. It's as if UPS is buying the full house, but puting less than the full purchase price down as a downpayment. The full funding level is the sum of UPS contributions *PLUS* UPS' Withdrawal Liability, not UPS' contributions alone. [ Note: the funding level varies daily as the market value of the Fund's assets ebb and flow, and as the fund's acturarial characteristics change. It wouldn't be a constant 63%, but I'll use 63% to keep things simple.] [COLOR=#0000ff]Point two . The fund is 37 percent short per your number. [/COLOR] No. UPS just hasn't paid the remaining 37 cents that they owe yet. If they withdraw, the Law will compel them to. If they don't withdraw, they may pay it through higher contributions, or perhaps the stock market will soar and make up the shortfall for them. Or (prior to the passage of the pension reform act,) maybe the trustees would have just allowed the fund to remain less than 100% funded. [COLOR=#0000ff]That 37 percent would have paid for someones retirement money in the future. Instead its paying someones retirement today. Or someone today is short 37 percent in which case ups's money is paying for them. Anyway you add it up.[/COLOR] A dollar contributed today by UPS would have to wait its place in line behind the 21,000,000,000 other dollars that are already in line, waiting in the asset pool, to be paid out to current retirees and future retirees for some years to come. No one is shortchanged by 37 cents. No one is retireing from another company and receiving the 37 cents. At the risk of sounding like Morpheus, there is no 37 cents. It's all in your mind. The Matrix isn't real. [COLOR=#0000ff]UPS is paying 100 percent of what they are obligated to pay today into the fund thus the dollar. [/COLOR] Yes, but that 100% is 100% of what the Contract says UPS must contribute. It may be only 63% of what Full Funding would demand. Hence the $6 billion *also* owed by UPS as Withdrawal Liability!!!! [COLOR=#0000ff]But when they look at their bank statement they only had 63 percent in the account per your number. [/COLOR] Because that's all they "put down." If UPS (and every other Contributing Employer) wanted to contribute enough to bring Central States to Full Funding, they all should have made their usual contribution, and also paid their Withdrawal Liability in full ( with or without withdrawing.) Just like if you buy a house with 63% down and then toss in the other 37% as well. Now THAT'S 100% funding!!! [COLOR=#0000ff]Therefore either some retiree from some other company took the 37 cents or we are paying todays bills with tommorrows money. [/COLOR] Neither. [COLOR=#0000ff]If you're going to try to promote yourself as a pension expert then you must learn to progress past simple math. [/COLOR] Never said I was a pension expert. This is just the latest instance of you putting words in my mouth and attributing attitudes and opinions to me. [COLOR=#0000ff]Now when you answer this post try to focus on that point only. I don't need any assets or actuaries in the discussion. Keep it simple is it other retirees taking my 37 cents or are we paying todays bills with tommorrows money. [/COLOR] Neither. I'm afraid you're not ready. You're thinking is stuck in the Matrix. Try to understand; there is no 37 cents. Free your mind, CopperTop. Think outside the Parcel. [/QUOTE]
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