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UPS/IBT pension funding
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<blockquote data-quote="Inthegame" data-source="post: 2053220" data-attributes="member: 37112"><p>Good catch 35years. This Congress doesn't give Unions any "loopholes". This business friendly change applies to the funding of pensions which is derived from <u>employer</u> contributions. UPS can now assume an unrealistic 8.75% per year ROI over a 25yr projection to claim a 104% funding pct. Fortunately (for now) the funding formula also takes into account experience along with the age demographic and still requires the minimum funding necessary to fulfill the benefit obligation.</p><p></p><p>It's a numbers game that frees up single employer plans from additional cash outlays. A few years back UPS lobbied for a scheme in which they could substitute assets for cash. <em>See that airplane, there's your pension.</em> (BTW Teamster DRIVE money fought that back for those of you who believe all DRIVE money goes to Democrats.) Anyway, the big danger here is it makes companies with large cash reserves (like UPS) more prone to pay off withdrawal liabilities from all multi-employer plans.</p><p> </p><p>So this is far from a bone thrown to unions unless you consider a bone full of rat poison to be tasty.</p></blockquote><p></p>
[QUOTE="Inthegame, post: 2053220, member: 37112"] Good catch 35years. This Congress doesn't give Unions any "loopholes". This business friendly change applies to the funding of pensions which is derived from [U]employer[/U] contributions. UPS can now assume an unrealistic 8.75% per year ROI over a 25yr projection to claim a 104% funding pct. Fortunately (for now) the funding formula also takes into account experience along with the age demographic and still requires the minimum funding necessary to fulfill the benefit obligation. It's a numbers game that frees up single employer plans from additional cash outlays. A few years back UPS lobbied for a scheme in which they could substitute assets for cash. [I]See that airplane, there's your pension.[/I] (BTW Teamster DRIVE money fought that back for those of you who believe all DRIVE money goes to Democrats.) Anyway, the big danger here is it makes companies with large cash reserves (like UPS) more prone to pay off withdrawal liabilities from all multi-employer plans. So this is far from a bone thrown to unions unless you consider a bone full of rat poison to be tasty. [/QUOTE]
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