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Brown Cafe UPS Forum
UPS Retirement Topics
Retirement buyout
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<blockquote data-quote="overnite" data-source="post: 4244226" data-attributes="member: 78504"><p>I wouldn't factor whether UPS stays in business into your decision making on whether to take the lump. First, UPS as company appears to be doing pretty well, certainly as well or better than the broad US economy. Second, Pension plan is about 80% funded, and with it closed to new entrants, and being frozen entirely in a couple of years, any funding gap should go down. Thus, even if UP ceased to exist, there would still be funds available to pay the pension.</p><p></p><p>Third, your pension benefit is fully insured by the Pension Benefit Guarantee Fund. If your benefit is less than $5,000 or so (it varies by age and other factors) you'e fully covered.</p><p></p><p>Forth, and most importantly, nothing is completely risk free. If you took the money and invested it yourself, i'd wager your risk that your risk of losing money in the market is greater than the risk that 1) UPS will go bankrupt, 2) the funding set aside for the pension, as required by federal statute, vanishes , and the PBGF goes away.</p><p></p><p>All 3 things have to happen for you to lose your pension and its extremely unlikely.</p></blockquote><p></p>
[QUOTE="overnite, post: 4244226, member: 78504"] I wouldn't factor whether UPS stays in business into your decision making on whether to take the lump. First, UPS as company appears to be doing pretty well, certainly as well or better than the broad US economy. Second, Pension plan is about 80% funded, and with it closed to new entrants, and being frozen entirely in a couple of years, any funding gap should go down. Thus, even if UP ceased to exist, there would still be funds available to pay the pension. Third, your pension benefit is fully insured by the Pension Benefit Guarantee Fund. If your benefit is less than $5,000 or so (it varies by age and other factors) you'e fully covered. Forth, and most importantly, nothing is completely risk free. If you took the money and invested it yourself, i'd wager your risk that your risk of losing money in the market is greater than the risk that 1) UPS will go bankrupt, 2) the funding set aside for the pension, as required by federal statute, vanishes , and the PBGF goes away. All 3 things have to happen for you to lose your pension and its extremely unlikely. [/QUOTE]
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