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<blockquote data-quote="Ricochet1a" data-source="post: 574605" data-attributes="member: 22880"><p>I wrote off the pension when the Defined Benefit Pension Plan (DBPP) was gutted. But what did strike me is that FedEx is only "giving" 5% of annual gross as a contribution to the PPP. This is outrageous. Without getting into minutia of finance, 5% of annual gross times 25 years of service equates to a balance of about 125% of a year's pay as a balance at retirement at 25 years. One can basically buy a new car at retirement to get back and forth to that door greeter job at the local mega-mart. </p><p> </p><p>They're only paying 1% quarterly on the balance. That is marginally above T-Bill rates; and only a couple of percentage points above annual inflation rate. In other words, marginally better that stuffing a mattress. The real kicker is that FedEx is holding the balance, NOT a third party. If FedEx ever goes belly up, guess what, your pot of money is gone too. </p><p> </p><p>Folks, this ISN'T a pension, it is an end of career payout. With a return on "investment" of only 4%, there isn't going to much growth in the balance over inflation. When I looked at the "straight life annuity" and compared that amount to what the DBPP was, I'm only getting about 20% of what I would've gotten under the DBPP. </p><p> </p><p>To make a rough comparison between the trash plan that is in effect and the old DBPP, do the following:</p><p> </p><p>Take your years of service and multiply that by 2% (multiply the "Benefit Accrual Service" number on the front of the page by 2%).</p><p> </p><p>Multiply this by your average annual gross $$$ over the past five years, then divide by 12.</p><p> </p><p>This would've been your monthly payment under the old DBPP. </p><p> </p><p>Compare this number you just calculated with the number that appears at the bottom right of the chart on the back of the form "straight life annuity". </p><p> </p><p>I'll end this post so you can pick your jaw up from the floor.</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 574605, member: 22880"] I wrote off the pension when the Defined Benefit Pension Plan (DBPP) was gutted. But what did strike me is that FedEx is only "giving" 5% of annual gross as a contribution to the PPP. This is outrageous. Without getting into minutia of finance, 5% of annual gross times 25 years of service equates to a balance of about 125% of a year's pay as a balance at retirement at 25 years. One can basically buy a new car at retirement to get back and forth to that door greeter job at the local mega-mart. They're only paying 1% quarterly on the balance. That is marginally above T-Bill rates; and only a couple of percentage points above annual inflation rate. In other words, marginally better that stuffing a mattress. The real kicker is that FedEx is holding the balance, NOT a third party. If FedEx ever goes belly up, guess what, your pot of money is gone too. Folks, this ISN'T a pension, it is an end of career payout. With a return on "investment" of only 4%, there isn't going to much growth in the balance over inflation. When I looked at the "straight life annuity" and compared that amount to what the DBPP was, I'm only getting about 20% of what I would've gotten under the DBPP. To make a rough comparison between the trash plan that is in effect and the old DBPP, do the following: Take your years of service and multiply that by 2% (multiply the "Benefit Accrual Service" number on the front of the page by 2%). Multiply this by your average annual gross $$$ over the past five years, then divide by 12. This would've been your monthly payment under the old DBPP. Compare this number you just calculated with the number that appears at the bottom right of the chart on the back of the form "straight life annuity". I'll end this post so you can pick your jaw up from the floor. [/QUOTE]
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