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UPS Union Issues
New England Fund Plan Changes
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<blockquote data-quote="my2cents" data-source="post: 57308"><p>After chatting with a few co-workers about these plan changes this week, most didn't understand how the freeze would work, as outlined in Example #1 A in the notice. The contibution rates are from the New England Supplement (Article 69) and the Monthly Accrural Values are from <a href="http://www.nettipf.com/table17.htm" target="_blank">Table 17</a> found on the New England Fund's website. </p><p> </p><p><table border=1><tr><td></TD><TD>Contract Year</TD><TD>Contribution Rate</TD><TD>Monthly Accrural Value </TD></TR><TR><TD>August 1st</TD><TD>2004</TD><TD>$4.66</TD><TD>$248 </TD></TR><TR><TD>August 1st</TD><TD>2005</TD><TD>$4.86</TD><TD>$256 </TD></TR><TR><TD>August 1st</TD><TD>2006</TD><TD>$5.06</TD><TD>$264 </TD></TR><TR><TD>August 1st</TD><TD>2007</TD><TD>$5.26</TD><TD>$272</td></tr></table> </p><p> </p><p>In effect, on August 1st of this year, the $248 monthly accrural value will be the value used for at least the next 3 years - $248 x 3 = $744. Normally, the monthly accrural value will rise with the corresponding contribution rate, instead of being frozen - $256 + $264 + $272 = $792. The resulting difference between $792 and $744 meets and exceeds the annual 5% maintenance of benefits obligation. Once the collective bargaining agreement expires on July 31, 2008, the contribution rates will have to be greater than 5% in order for the participant to start accruing an increased benefit level. In short, the 20 cent increases each year will be used to shore up the funding level of the plan, instead of accruing a benefit for the participant.</p></blockquote><p></p>
[QUOTE="my2cents, post: 57308"] After chatting with a few co-workers about these plan changes this week, most didn't understand how the freeze would work, as outlined in Example #1 A in the notice. The contibution rates are from the New England Supplement (Article 69) and the Monthly Accrural Values are from [url="http://www.nettipf.com/table17.htm"]Table 17[/url] found on the New England Fund's website. <table border=1><tr><td></TD><TD>Contract Year</TD><TD>Contribution Rate</TD><TD>Monthly Accrural Value </TD></TR><TR><TD>August 1st</TD><TD>2004</TD><TD>$4.66</TD><TD>$248 </TD></TR><TR><TD>August 1st</TD><TD>2005</TD><TD>$4.86</TD><TD>$256 </TD></TR><TR><TD>August 1st</TD><TD>2006</TD><TD>$5.06</TD><TD>$264 </TD></TR><TR><TD>August 1st</TD><TD>2007</TD><TD>$5.26</TD><TD>$272</td></tr></table> In effect, on August 1st of this year, the $248 monthly accrural value will be the value used for at least the next 3 years - $248 x 3 = $744. Normally, the monthly accrural value will rise with the corresponding contribution rate, instead of being frozen - $256 + $264 + $272 = $792. The resulting difference between $792 and $744 meets and exceeds the annual 5% maintenance of benefits obligation. Once the collective bargaining agreement expires on July 31, 2008, the contribution rates will have to be greater than 5% in order for the participant to start accruing an increased benefit level. In short, the 20 cent increases each year will be used to shore up the funding level of the plan, instead of accruing a benefit for the participant. [/QUOTE]
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