Management Buy-out and Pension cut


Pension... Cut

In the next two weeks UPS will announce a buy-out for Corporate and Region management (Division Managers and higher) who are 50 or older. Take the money and run, or be forced to stay until 59 (new retirement age.) Managers < 50 will have their pension cut and be given a one time payout of 20% of their future estimated. Cost-cutting time!


Well-Known Member
Great. That means getting rid of more of the management people that have actually done this job and filling their slots with more IE and staff types.


i'd certainly like to see something to back this claim up--- are u a manager? -currently employed? -at corporate?

and what about >50 managers that are below div mgr level?


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There are a number of rampant rumors running around right now concerning this. One I heard from a Corp. management person was that anyone 50 of above on the day of announcement is set in stone under the old retirement conditions. Any management person under 50 will have to work until 62 years old to get retirement no matter how many years service. When this rumor was running it was also alledged to be announced at any moment and then all of a sudden put on hold.

I think the "put on hold" classification comes into play when the rumor fails to materialize.

Regardless of what happens, there is one truth at the heart of all of this. Many and I mean many management folks are starting to question their longterm security which in years past was never a part of the mindset at all. As an hourly I have no say or in one sense, no stake in what UPS does in this area. However, not having a stake is really no true either because as UPS continues it's path away from the basic principles of Jim Casey, I see the ranks of management becoming less and less attractive to the best people and in time this will affect the company and it's future results. 20 years ago we began a process towards bottom pulling from the labor pool for our PT hourly ranks which in turn feed our future driver and management ranks. Now it seems this process may have begun with the management ranks itself.

One person here suggested management retirement changes are needed to pay for the union pension crisis and although I think it's remote UPS would do such a thing, it's also been proven over the last few years that UPS leadership has developed a good habit of doing the unthinkable in how they run this company so that claim at the end of the day may have merit.

If we continue the course, the music for next year's 100th anniversay celebration will be an intro to our own funeral dirge performed in


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Hey Anonymous, this post seems to have holes in it. There is no way the company could offer a buy out to just division manager levels and above. This would most likely result in a discrimination law suit. It would have to be open to everyone in that age group.

I know all this talk is rumor as a result of the article written in the Atlanta newspaper back in November. I think it is becoming clear that something is going to happen with the management retirement age, the pension and some type of downsizing.

I would anticipate something happening early next year, but your guess is as good as mine.


If the plan is to eliminate the pension. How will the pension buy-out amount be determined. Years of service? (years that UPS paid into the existing plan on your behalf?) Age - (The younger you are the more time you have to let compound interest work on your behalf.) Combination of both??


heard the announcement will be next will only affect Div Mgr and up...strictly a buyout, no pension change at this point in time...

formula is RUMORED to be:

length of service x monthly salary x 23 x .20



length of service x monthly salary x 23 x .20

I doubt that formula is correct. Try plugging in some numbers:

Length of service: 25 years
Monthly salary: $9,000

You get 25 x 9000 x 23 x .20 = $1,035,000

If this is the offer it will definately "clean out the closet" in a big hurry.


update---only affects those with a combined factor of 80 (years worked + age) AND IT INCLUDES MEDICAL--- it's basically your opportunity to cash out and invest on your own...


Industrial Slob
ahhh rumors. this sounds about right for SCS (which UPS is trying to trim) but sounds fishy for UPS small package.


:crying: :ohmy: :confused:1
The rumors are running wild. The latest is the announcement will be made Monday. Can't wait for the truth, some of the this stuff is crazy!
Everyone is saying grade 18 and above, the age varies, and the future pension plan? also the age going to 57?
Stay tuned.


Beat the rush and start worrying now!
If you have not feathered your nest and made plans for adversity, then worrying about rumors make a sort of perverse sense. Wait until the facts are presented and act from that point. I am just a driver, but that is the way I deal with my job.


Well-Known Member
I wish I had their worries if I had 25 plus years management with their stock, salary, perks and bonuses. If the rumors are true with the grades being district managers and above, they will be well taken care of. In other words the prospect of them having to get a job at Walmart is less than their hourly counterparts, if you get my drift. This happened before in the mid nineties, so if true it is nothing new. Maybe targeting the higher salary people now, in the last one alot of the younger management took the buy out in search of greener pastures. Can see them raising the retirement ages for the less seniority management team, kick it up to the medicad/medicare age requirement of 62. Makes financial sense, savings with not providing health and welfare coverages for their retirees.

Somebody did bring up the discrimination involved in just offering the higher ups the early retirement package, guessing that the offer will include those below the grade if you do have the 80 year age and service requirement to prevent any problems. Good news is that your UPS Retirement Plan is overfunded, so at least the federal government is not involved with it. As far as eliminating the fund, study the federal ERISA laws and see that any vested time is guaranteed. In other words it is not going to change from your best five year formula, they can stop putting monies into your trust, but it may be well over 100 percent vested by now. For the novice that means that you may not have to put any new monetary contributions into the trust to cover the their retirees, just living off the interest from the plans' investments.

Guess you guys will find out Monday, if the rumors have merit. Otherwise somebody is just pulling your chains, lousy time of the season for it:cool:


A reduction of management is a certainty. I have overheard/seen portions of the reduction plan, including the specific number of jobs in two areas.

Based upon the number of people planned, it cannot only include grade 18s and higher because there are not that many in the area (s).

Here are some things to consider
1) MIP restrictions and reductions – quit, lay off you loose it. Retirement you still get it.
2) Recent pension reform backed by UPS included specific 401k changes
3) 401k restrictions on UPS stock investment was recently lifted
4) Management was restructured recently – added ops manager and eng manager, dist manager became a customer service/pr role. Ops and eng run the districts now.
5) Most staff departments had a reduction in 18s. Staff reductions only partially achieved.
6) Grade 18s reduced, no higher levels reduced, now less reports to higher levels – backwards??
7) Operations had no reductions in 18s
8) Technology (pkg flow) reduces needs for hourly and management knowledge and reduces need for management planners. Sorry IE
9) Recent public announcement of reduction specifically says there will be reductions through lay off, attrition and early retirement.
10) UPS is smart enough to get around the age discrimination. A lay off with a severance package could easily achieve the reductions needed. Seniority and age don’t have to count.


Well-Known Member

When do you anticipate these changes coming about? Is it strictly a reduction process or is there going to be real changes to the whole pension/retirement plan as we know it today.
The way you speak, it doesn't appear that it is going to be a very appealing offer. You make it almost sound like they just want numbers to go away, doesn;t matter who or what level! Correct me if I'm reading into your post too much.
Do you have any specifics as to how many they are looking to lose overall? Have you seen any of the details to this planned buyout? Anything else you can share would be great!