UPS Management Retirement Pay out next year?

[Old Man Jingles]

There has been some rumors from the Corporate Finance group that there are plans for UPS to buy out the retirement of management that has not retired in 2013. Several of the oldtimers are extremely worried because the value that UPS has in their Total Rewards is less than 1/3 of the amount of cash it would take to buy an annuity to replace their monthly pension payments. The two I heard talking about this turn 55 in 2013 and early 2014. My buyout would be a joke. These two guys said that just about all retirement funding is once a person turns 50. I have never thought about this or looked into this before. I have not heard anything about the Health Plan for retirees.

Has anyone else heard anything about this?

 

[UPS1907]

I think with the portable 401k's for the younger workers and the new salary bands, the pension is safe for now. IMO I don't think they start to look at pensions yet. They still have the MIP to screw with. For anyone in the 50 range it's like a race to 55. The fact that a majority of people won't be getting raises after 50 should reduce costs. Throw a couple of low MIP's and there's some savings.

On a broader level, how can you sit back and look yourself in the mirror and not give management a defined pension benefit when all the drivers get one, then again, I don't think there are a lot of mirrors at the corporate offices in Atlanta.

 

[UpstateNYUPSer(Ret)]

On a broader level, how can you sit back and look yourself in the mirror and not give management a defined pension benefit when all the drivers get one, then again, I don't think there are a lot of mirrors at the corporate offices in Atlanta.

This is a generalization but I would think that someone in a management position would be more capable of handling a 401K rather than the majority of drivers for whom the defined pension benefit is their best option. Left to the their own devices many drivers would end up penniless in retirement.

 

[Catatonic]

This is a generalization but I would think that someone in a management position would be more capable of handling a 401K rather than the majority of drivers for whom the defined pension benefit is their best option. Left to the their own devices many drivers would end up penniless in retirement.

You have a distorted view of management ... at least the ones 45 and older.
They were simply drivers that were promoted into management.
The key to effectively managing a 401k is to select a low cost fund and stick it out for the long term.
People who take risks, like going from driver to management, don't do well in 401k.

 

[UPS1907]

On a broader level, how can you sit back and look yourself in the mirror and not give management a defined pension benefit when all the drivers get one, then again, I don't think there are a lot of mirrors at the corporate offices in Atlanta.

This is a generalization but I would think that someone in a management position would be more capable of handling a 401K rather than the majority of drivers for whom the defined pension benefit is their best option. Left to the their own devices many drivers would end up penniless in retirement.[/QUOTE]

That sounds like a generalization. I'm sure some drivers are better with $$ than management. Some certainly have more..

 

[Jones]

This is a generalization but I would think that someone in a management position would be more capable of handling a 401K rather than the majority of drivers for whom the defined pension benefit is their best option. Left to the their own devices many drivers would end up penniless in retirement.

That's a huge (and incorrect imho) generalization. There is one manager in my building who is an investing guru and knows the market inside out, the kind of guy who subscribes to specialty newsletters and listens to investment talkshows on the radio and stuff like that. He's my go-to if I have any questions or just want to talk about stocks and investing generally. The rest of them? Fuggedaboudit. Clueless. They can't even figure out how to put a bulk stop RDL instead of section 1, I sure as hell wouldn't trust them to make investment decisions that have real consequences.

Btw the investment guru also has the smoothest running group in the division (not just the center). Probably not a coincidence.

 

[UpstateNYUPSer(Ret)]

How many of your co-workers would you want handling your investments? How many of them would be far better off with a defined benefit pension plan rather than a 401k?

 

[FracusBrown]

Rumor not sure, but actions over the last 10 are pretty clear. Anything that can be cut to save costs is being cut. It is interesting that the "value" of the pension is now posted on the total rewards statement. The value is much lower than I would have expected. Divided by 15 years, mine is worth about 10,000 per year of retirement from age 55 to age 70.

 

[Catatonic]

How many of your co-workers would you want handling your investments? How many of them would be far better off with a defined benefit pension plan rather than a 401k?

Probably 99% would be better off with a defined benefit pension plan - both hourly and salaried.

 

[Jones]

How many of your co-workers would you want handling your investments? How many of them would be far better off with a defined benefit pension plan rather than a 401k?

I don't trust anybody to handle my investments, but that's not what I was addressing. You suggested that management would be better at making their own investment decisions than drivers and I don't see it.

 

[Catatonic]

There has been some rumors from the Corporate Finance group that there are plans for UPS to buy out the retirement of management that has not retired in 2013. Several of the oldtimers are extremely worried because the value that UPS has in their Total Rewards is less than 1/3 of the amount of cash it would take to buy an annuity to replace their monthly pension payments. The two I heard talking about this turn 55 in 2013 and early 2014. My buyout would be a joke. These two guys said that just about all retirement funding is once a person turns 50. I have never thought about this or looked into this before. I have not heard anything about the Health Plan for retirees.

Has anyone else heard anything about this?

I have not heard anything within UPS but my Financial Adviser and I have been trying to figure out what the Value listed on Total Rewards means.
He thinks it is a buyout figure and has determined it is at best 40% of the money it would take to buy an annuity to replace the defined benefits of my UPS pension.

Note: I am over 55 with over 35 years in so I am fully funded so that is why I have around 40% compared to your associates that are not 55 yet who say it is less than 33%.

This is a common topic amongst many people getting close to retirement.

 

[UpstateNYUPSer(Ret)]

I don't trust anybody to handle my investments, but that's not what I was addressing. You suggested that management would be better at making their own investment decisions than drivers and I don't see it.

I made the generalization that someone who is able to hold a management position would be better at making their own investment decisions than a majority of the drivers.

 

[Catatonic]

I made the generalization that someone who is able to hold a management position would be better at making their own investment decisions than a majority of the drivers.

I could make the generalization that the typical management person would do worse than the typical driver.
Drivers do not go into management because they don't want the risk and the hassle.
401k investing is about not taking risks (adverse to just about what every investor will tell you).
401k is your future and if you see it as a replacement for your pension, you should not be taking risks with it.
Put it in Index funds that cover a broad part of a market.
Most management people I know have a false sense of their abilities and start investing in risky investments and invariably lose.
Many of them go into individual stocks trying to compete against investment companies with hundreds of analysts on their payroll.
Not exactly good odds.

 

[bones]

There have been rumors for almost 10 years, I believe it will happen one day, we will go to a defined contribution vs. defined benifit. I think the value may have been put in the total rewards so that when there is a buy out it will be higher than what you see making people think it is a good deal. Many will not look and see that number is still much lower than what you should have had in there. Also, nothing will be said about health care benifits for retirees, you just won't have them and there will be nothing to compensate for that. I believe it was GM that announced last week changes to their salaried workers pensions plan, going from defined benifit to defined contribution. All companies should probably do this as rates of return and life spans are too difficult to calculate with markets and advances in medical treatments. UPS will just use this to reduce management compensation and try to "sell" it as a good thing (remind you of anything?)

 

[texan]

There have been rumors for almost 10 years, I believe it will happen one day, we will go to a defined contribution vs. defined benifit. I think the value may have been put in the total rewards so that when there is a buy out it will be higher than what you see making people think it is a good deal. Many will not look and see that number is still much lower than what you should have had in there. Also, nothing will be said about health care benifits for retirees, you just won't have them and there will be nothing to compensate for that. I believe it was GM that announced last week changes to their salaried workers pensions plan, going from defined benifit to defined contribution. All companies should probably do this as rates of return and life spans are too difficult to calculate with markets and advances in medical treatments. UPS will just use this to reduce management compensation and try to "sell" it as a good thing (remind you of anything?)

Time and things of yesterday are changing for all.
Military, Government / State, and Corporations pensions are all drawing back.

The new trend—frozen pension plans. Two mainstays of corporate America, General Motors and Bank of America, recently
announced they were freezing their pension plans. When a company freezes its pension plan, they generally don't shut
it down completely. Instead, they stop contributing for current employees, don't accept new employees into the plan, or both.
Members are still able to receive the pension plan benefits they have earned, they just won't accrue additional benefits.
To make the bitter pill easier to swallow, some companies will increase their 401(k) plan contributions when they
freeze their pension plans, as was the case for GM and Bank of America.

America's Dying Corporate Pension System - On Retirement (usnews.com)

 

[Jackburton]

Either way I contribute the max into my 401k Roth of 17000 this year. If they decide to stop contributing to my pension and do a 401k match of some sort, it wouldn't be the end of the world for my retirement plans. My 401k is potatoes, pension and SSI are gravy.

 

[airops]

Judging by the way the merit increase system worked this year. Announced 2 weeks before it went into affect and after we had our QPR's submitted. I would guess the retirement program will be changed for each of us after we announce we will be retiring. There is one thing you can bank on. If it involves UPS and a change that affects front line management, it's not going to be good. Is there any wonder why there are unions? We would be out of business if the Teamster's allowed us to treat the hourly's the way we treat ourselves.

 

[UPS1907]

Judging by the way the merit increase system worked this year. Announced 2 weeks before it went into affect and after we had our QPR's submitted. I would guess the retirement program will be changed for each of us after we announce we will be retiring. There is one thing you can bank on. If it involves UPS and a change that affects front line management, it's not going to be good. Is there any wonder why there are unions? We would be out of business if the Teamster's allowed us to treat the hourly's the way we treat ourselves.

Well said.

 

[hangin455]

DITTO!

 

[Mainmast]

My financial advisor took one look at the payout on my Total Rewards Statement and advised me to get out as soon as possible. He believes changes will take place. After 35 years with UPS,the last 20 in management,I am going to retire in August of this year.