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UPS subsidizing non ups pensions
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<blockquote data-quote="JonFrum" data-source="post: 118857"><p>I hope everyone understands that most non-UPS pension fund participants either don't qualify for any benefits at all, or only qualify for a small, or limited benefit amount. Those who do qualify, weather for small or large benefits, draw upon contributions made by their own employer, or successive employers, on their behalf, as well as the unclaimed contributions made by those companies on behalf of employees who never worked long enough under covered employment to get vested and earn a right to a future pension, plus the investment income made by the fund over the many, many years the monies were sitting in the fund's coffers. Thus, any subsidy by UPS and UPSers, must be rather limited, especially since many companies contributed at a lesser hourly rate that UPS, and thus their retirees only qualify for a proportionatly smaller monthly pension benefit anyway. Note also that any contribution shortfall, such as happens when a company files for bankruptcy and can't pay its final debt to the pension fund, is absorbed by the fund as a whole, not just UPS. If, say, UPS contributes 20% of the fund's employer contributions anually, then UPS would be responsible for covering 20% of the uncollectable portion of the debt, not the entire debt. Of course, any company that stops contributing because of bankruptcy or simple withdrawal, also stops its employees from accumulating further pension credits. Their future benefit levels are prematurely frozen, unless they obtain work with another employer who continues contributing on their behalf. </p><p>- - - - -</p><p>Many people are aware of the sorry state of Social Security and have read how its financial troubles are the result of its "pay as you go" design and how growing numbers of retirees are living off the contributions of a dwindling number of young , working contributors. They then assume that financially troubled Teamsters-sponsered pension plans must be in financial trouble for the same reasons. But Teamsters plans are not "pay as you go." Teamsters plans, despite all their faults, require each employee to have contributions made on his behalf by his employer(s) and his eventual benefit is based on these contributions, with appropriate adjustments for the size and duration of the contributions made. It's not a personal savings account, but the process is somewhat similar. Everyone earns their retirement individually by having hourly contributions made in their name, in lieu of wages. We all, in effect, settle for less hourly wages, and instead, direct our employer to contribute the money to the pension fund. There should be a nest egg waiting for each of us at retirement time, one we each built up ourselves over the years. </p><p></p><p>Social Security is an inherently unsound intergenerational (Ponzi?) scheme that requires each successive younger generation to be drafted into the system to finance the retirement of the older generation. Significantly, the first generation to retire contributed very little to the system, so the system was broke from the start. Ida Mae Fuller, the first Social Security recipient, contributed for only a few months, and at a miniscule rate, then promptly retired and spent many years collecting benefit checks. She liked Social Security just fine. </p><p></p><p>The Social Security scheme would be illegal, and land its operators in jail if it were run by any one other than the U S Government. Teamsters funds, while far from perfect, are simply not organized as unsoundly and standard criticisms of Social Security don't apply. They are completely different arrangements.</p><p>- - - - -</p><p>It is also wrong to make too much of a "Our Company vs. The Rest of the Companies" analysis. That's because contributions are made on an individual basis, hour by hour, not company by company. It really makes little difference how many other employees also work for your same company, or how many work for various other companies. Nor does it matter much how many employers or employees there are in the fund or weather their numbers are growing or dwindling. Or even what the ratio of retirees to active contributors is, or weather the retirees' ranks are growing relative to actives. All these statistics are worth looking at, but all that really matters is that you, as an individual, contributed all those years, and eventually it will be time to withdraw your money. Even if the fund's active members dwindle and the number of contributing employers shrinks to the single digit range (very unlikely), all this means is that the fund is smaller, not that you lost any money. (I'm not talking here about bonehead trustees investing the funds' assets in a "down" stock market and sitting on their hands for several years as they watch the carnage slowly unfold. That does mean you lost money.) If the fund shrinks further, the trustees or sponsors may shut down the fund in an orderly way by cashing everyone out if it isn't worth operating the fund for such a small number of people. Or the fund could be merged with a larger fund. Think of it like having a long term savings account at your local bank to which you contribute regularly. It doesn't matter much what others do. They may save just like you, or they may save at a higher or lower rate, or for shorter or longer periods. They may work for the same employer as you or a different one. So what? Your account is seperate from theirs, even though all monies are commingled. It doesn't matter if they withdraw their money. Or if your bank is large or small. Any analytical lumping of your account with others is artifical and of limited usefulness. Someone who works in your UPS building on a different shift may be a total stranger to you, while someone from another company may be your best friend. It doesn't matter. Many surviving spouses and dependants who live off a UPSers' pension checks as beneficiaries have never worked a day for UPS, just like all those non-UPSers we're supose to resent. </p><p></p><p>Again, Teamsters pension funds are not exactly like bank savings accounts, but they are roughly similar, at least once you get vested, and very different from the Social (In)Security System. The latter requires a constant influx of fresh, young sheep to be sheared to pay benefits to the older generation of current retirees, some of whom have spent their lives voting themselves ever higher levels of benefits. There is no trust fund (to speak of) to provide benefits. The Teamsters-sponsored funds, are designed under the Taft-Hartley law and requires each participant to contribute into a trust fund through his employer(s) so there will be money available when he retires. Ultimate benefit levels are set with the help of actuaries who take into account the individual participant's age, hourly contribution rate, hours worked per year, years of service, etc. There is undoubtedly some limited subsidies built into the formulas, but it is what you would expect in any group arrangement, not a theft of 60% of your retirement funds. </p><p>- - - - - </p><p>The UPS retirement plan that the company proposed during the 1997 contract negotiations was presented to us during The Strike in the form of a professionally produced booklet designed like a Summary Plan Description, but intended to sell us on the benefits of a UPSers only plan. I still have the brochure, (and the Health & Welfare one as well,) and I remember being shocked at what a terrible plan it was. I assumed at the time that UPS could handle money better than the Teamsters, until I read the details, and saw all the bad features of the plan. Dig out your copy if you still have it. And remember, this is a sales brochure intented to put the plan in the best possible light.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 118857"] I hope everyone understands that most non-UPS pension fund participants either don't qualify for any benefits at all, or only qualify for a small, or limited benefit amount. Those who do qualify, weather for small or large benefits, draw upon contributions made by their own employer, or successive employers, on their behalf, as well as the unclaimed contributions made by those companies on behalf of employees who never worked long enough under covered employment to get vested and earn a right to a future pension, plus the investment income made by the fund over the many, many years the monies were sitting in the fund's coffers. Thus, any subsidy by UPS and UPSers, must be rather limited, especially since many companies contributed at a lesser hourly rate that UPS, and thus their retirees only qualify for a proportionatly smaller monthly pension benefit anyway. Note also that any contribution shortfall, such as happens when a company files for bankruptcy and can't pay its final debt to the pension fund, is absorbed by the fund as a whole, not just UPS. If, say, UPS contributes 20% of the fund's employer contributions anually, then UPS would be responsible for covering 20% of the uncollectable portion of the debt, not the entire debt. Of course, any company that stops contributing because of bankruptcy or simple withdrawal, also stops its employees from accumulating further pension credits. Their future benefit levels are prematurely frozen, unless they obtain work with another employer who continues contributing on their behalf. - - - - - Many people are aware of the sorry state of Social Security and have read how its financial troubles are the result of its "pay as you go" design and how growing numbers of retirees are living off the contributions of a dwindling number of young , working contributors. They then assume that financially troubled Teamsters-sponsered pension plans must be in financial trouble for the same reasons. But Teamsters plans are not "pay as you go." Teamsters plans, despite all their faults, require each employee to have contributions made on his behalf by his employer(s) and his eventual benefit is based on these contributions, with appropriate adjustments for the size and duration of the contributions made. It's not a personal savings account, but the process is somewhat similar. Everyone earns their retirement individually by having hourly contributions made in their name, in lieu of wages. We all, in effect, settle for less hourly wages, and instead, direct our employer to contribute the money to the pension fund. There should be a nest egg waiting for each of us at retirement time, one we each built up ourselves over the years. Social Security is an inherently unsound intergenerational (Ponzi?) scheme that requires each successive younger generation to be drafted into the system to finance the retirement of the older generation. Significantly, the first generation to retire contributed very little to the system, so the system was broke from the start. Ida Mae Fuller, the first Social Security recipient, contributed for only a few months, and at a miniscule rate, then promptly retired and spent many years collecting benefit checks. She liked Social Security just fine. The Social Security scheme would be illegal, and land its operators in jail if it were run by any one other than the U S Government. Teamsters funds, while far from perfect, are simply not organized as unsoundly and standard criticisms of Social Security don't apply. They are completely different arrangements. - - - - - It is also wrong to make too much of a "Our Company vs. The Rest of the Companies" analysis. That's because contributions are made on an individual basis, hour by hour, not company by company. It really makes little difference how many other employees also work for your same company, or how many work for various other companies. Nor does it matter much how many employers or employees there are in the fund or weather their numbers are growing or dwindling. Or even what the ratio of retirees to active contributors is, or weather the retirees' ranks are growing relative to actives. All these statistics are worth looking at, but all that really matters is that you, as an individual, contributed all those years, and eventually it will be time to withdraw your money. Even if the fund's active members dwindle and the number of contributing employers shrinks to the single digit range (very unlikely), all this means is that the fund is smaller, not that you lost any money. (I'm not talking here about bonehead trustees investing the funds' assets in a "down" stock market and sitting on their hands for several years as they watch the carnage slowly unfold. That does mean you lost money.) If the fund shrinks further, the trustees or sponsors may shut down the fund in an orderly way by cashing everyone out if it isn't worth operating the fund for such a small number of people. Or the fund could be merged with a larger fund. Think of it like having a long term savings account at your local bank to which you contribute regularly. It doesn't matter much what others do. They may save just like you, or they may save at a higher or lower rate, or for shorter or longer periods. They may work for the same employer as you or a different one. So what? Your account is seperate from theirs, even though all monies are commingled. It doesn't matter if they withdraw their money. Or if your bank is large or small. Any analytical lumping of your account with others is artifical and of limited usefulness. Someone who works in your UPS building on a different shift may be a total stranger to you, while someone from another company may be your best friend. It doesn't matter. Many surviving spouses and dependants who live off a UPSers' pension checks as beneficiaries have never worked a day for UPS, just like all those non-UPSers we're supose to resent. Again, Teamsters pension funds are not exactly like bank savings accounts, but they are roughly similar, at least once you get vested, and very different from the Social (In)Security System. The latter requires a constant influx of fresh, young sheep to be sheared to pay benefits to the older generation of current retirees, some of whom have spent their lives voting themselves ever higher levels of benefits. There is no trust fund (to speak of) to provide benefits. The Teamsters-sponsored funds, are designed under the Taft-Hartley law and requires each participant to contribute into a trust fund through his employer(s) so there will be money available when he retires. Ultimate benefit levels are set with the help of actuaries who take into account the individual participant's age, hourly contribution rate, hours worked per year, years of service, etc. There is undoubtedly some limited subsidies built into the formulas, but it is what you would expect in any group arrangement, not a theft of 60% of your retirement funds. - - - - - The UPS retirement plan that the company proposed during the 1997 contract negotiations was presented to us during The Strike in the form of a professionally produced booklet designed like a Summary Plan Description, but intended to sell us on the benefits of a UPSers only plan. I still have the brochure, (and the Health & Welfare one as well,) and I remember being shocked at what a terrible plan it was. I assumed at the time that UPS could handle money better than the Teamsters, until I read the details, and saw all the bad features of the plan. Dig out your copy if you still have it. And remember, this is a sales brochure intented to put the plan in the best possible light. [/QUOTE]
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