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<blockquote data-quote="Ricochet1a" data-source="post: 578329" data-attributes="member: 22880"><p>To clarify all of the confusion...</p><p> </p><p>Everyone that was vested in the traditional plan as of May 31, 2008 will receive what they would've had they actually terminated their employment with Express on May 31, 2008. That plan ended on May 31, 2008 for everyone though, including all salaried employees excluding senior executives and aircrew under contract. </p><p> </p><p>This means that an employee that had say 17.43 years of service as of that date will receive 17.43 times 2% times the average of the high years of service as a pension at age 60. That is currently locked in - currently. What happened is that everyone was forced into the PPP which only contributes 5% of annual gross into an "account" which FedEx holds and the employee cannot invest on their own. This is the gradual erosion of the pension for all employees that had less than 25 years of service as of May 31, 2008. Every year an employee that has less than 25 years of service as of 5/31/08 stays with FedEx, their "final" pension (DBPP + PPP annuity) will decrease compared to what would've been paid under the DBPP accumulating additional years of service. So that employee that had 17.43 years of service as of 5/31/08 will NOT accumulate additional years of service for calculation of the pension.</p><p> </p><p>If that employee "retires" at 25 years of service, their pension at age 60 will be calculated in 2 parts. The first part will be for those 17.43 years of service times 2% times average of high years - THE HIGH YEARS AT THAT TIME, not the average of high years at the 25 year point. To this 34.86% of the average high at 17.43 years of service, will be added either an annuity from the PPP or a one-time payout to a "retirement" fund of the employee's choice.</p><p> </p><p>Further complicating the issue are the employees that had 25 years + as of 5/31/08. They will receive 50% of the average of high years gross, PLUS whatever they accumulate under the PPP. So for these employee who are "double dipping" they are actually getting a larger benefit.</p><p> </p><p>One might ask why would FedEx allow these employees to double dip. Because the PPP is such a lousy plan, that within a few years FedEx will actually begin to pay out less overall, FedEx will experience a NET savings. That employee that hired in after 5/31/08 and does a 25 year sentence with FedEx will only receive about one-third what they would've received under the the DBPP.</p><p> </p><p>The retirement plan model I constructed a few days ago is good. Those that retired May 31,2008 received full amount under the traditional plan. Since the PPP is only about one-third as "large" as the DBPP, each month an employee continues to work with FedEx, their pension loses ground compared to what they would've received under the DBPP. Those that had more than 25 years when the switch happened actually have incentive to say with FedEx until they can no longer move, since they are accumulating more in the PPP along with their position under the traditional plan (maxed out). </p><p> </p><p>This means that employees that are at the mid point in their "career" are in a bind. They have whatever existed 5/31/08; but they are only accumulating about one-third what would've been accumulated under the old plan. In otherwords, they don't have a pension upon which they can retire on, they have something that will cover utility payments and maybe a little more. Forget about purchasing the FedEx medical coverage for retirees, this would cost more than the "pension" would pay out each month. </p><p> </p><p>This is part of the deliberate and planned narrowing of compensation levels between Express and other FedEx operating companies. It is going to continue. This is why barring the RLA classification being changed (which looks near impossible at this point), all of FedEx wages will begin a narrowing of difference between the operating companies. After all, if Fred can pay a Ground driver $13 an hour to deliver packages, why pay an Express driver $22 and hour plus benefits.</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 578329, member: 22880"] To clarify all of the confusion... Everyone that was vested in the traditional plan as of May 31, 2008 will receive what they would've had they actually terminated their employment with Express on May 31, 2008. That plan ended on May 31, 2008 for everyone though, including all salaried employees excluding senior executives and aircrew under contract. This means that an employee that had say 17.43 years of service as of that date will receive 17.43 times 2% times the average of the high years of service as a pension at age 60. That is currently locked in - currently. What happened is that everyone was forced into the PPP which only contributes 5% of annual gross into an "account" which FedEx holds and the employee cannot invest on their own. This is the gradual erosion of the pension for all employees that had less than 25 years of service as of May 31, 2008. Every year an employee that has less than 25 years of service as of 5/31/08 stays with FedEx, their "final" pension (DBPP + PPP annuity) will decrease compared to what would've been paid under the DBPP accumulating additional years of service. So that employee that had 17.43 years of service as of 5/31/08 will NOT accumulate additional years of service for calculation of the pension. If that employee "retires" at 25 years of service, their pension at age 60 will be calculated in 2 parts. The first part will be for those 17.43 years of service times 2% times average of high years - THE HIGH YEARS AT THAT TIME, not the average of high years at the 25 year point. To this 34.86% of the average high at 17.43 years of service, will be added either an annuity from the PPP or a one-time payout to a "retirement" fund of the employee's choice. Further complicating the issue are the employees that had 25 years + as of 5/31/08. They will receive 50% of the average of high years gross, PLUS whatever they accumulate under the PPP. So for these employee who are "double dipping" they are actually getting a larger benefit. One might ask why would FedEx allow these employees to double dip. Because the PPP is such a lousy plan, that within a few years FedEx will actually begin to pay out less overall, FedEx will experience a NET savings. That employee that hired in after 5/31/08 and does a 25 year sentence with FedEx will only receive about one-third what they would've received under the the DBPP. The retirement plan model I constructed a few days ago is good. Those that retired May 31,2008 received full amount under the traditional plan. Since the PPP is only about one-third as "large" as the DBPP, each month an employee continues to work with FedEx, their pension loses ground compared to what they would've received under the DBPP. Those that had more than 25 years when the switch happened actually have incentive to say with FedEx until they can no longer move, since they are accumulating more in the PPP along with their position under the traditional plan (maxed out). This means that employees that are at the mid point in their "career" are in a bind. They have whatever existed 5/31/08; but they are only accumulating about one-third what would've been accumulated under the old plan. In otherwords, they don't have a pension upon which they can retire on, they have something that will cover utility payments and maybe a little more. Forget about purchasing the FedEx medical coverage for retirees, this would cost more than the "pension" would pay out each month. This is part of the deliberate and planned narrowing of compensation levels between Express and other FedEx operating companies. It is going to continue. This is why barring the RLA classification being changed (which looks near impossible at this point), all of FedEx wages will begin a narrowing of difference between the operating companies. After all, if Fred can pay a Ground driver $13 an hour to deliver packages, why pay an Express driver $22 and hour plus benefits. [/QUOTE]
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