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UPS subsidizing non ups pensions
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<blockquote data-quote="JonFrum" data-source="post: 133820"><p>I don't deny that Central States has dug itself into a deep hole, but I'm not sure I understand why 100,000 retirees that "lack a contributing employer" must consume nearly all the contributions of the entire current employer group. Didn't these retirees have a contributing employer all along who contributed on their behalf. Isn't that how they earned the right to a pension, by having their contributing employer do what contributing employers do, namely, contribute? Can't those "orphan" retirees also use the funds contributed in years' past by their contributing employers on behalf of the many fellow employees who never achieved Vesting Status and so their contributions were forfeited and retained by the fund? Wasn't the benefit amount of some of these retirees frozen at a low rate years ago and hasn't it been eaten by inflation up until the time they were finally able to start collecting? Haven't the contributed funds been earning investment income all these years (other than the recent loss years, of course?) </p><p></p><p>I'd like to know more about the definition of the phrase, "lack a contributing employer." If a retiree works for several different employers throughout his, say, thirty year career, are all of them said to be out of business, or only one, or what? It seems to me that a thirty year man with thirty years of employer contributions, from more than one employer, is not really different than a thirty year man with thirty years of contributions from one employer. </p><p></p><p>Remember, any current contributions from a retirees' employer are not for the retiree, they are for the current, "Active" employees who are earning their way to their own thirty year pension. In effect, all retirees are without a contributing employer regardless of weather the employer still is in business and contributing or not, because all current contributions are contributed for the benefit of individual, current (Active) employees, not retirees. Retirees draw on past contributions. Active employees have individual Pension Credit accounts funded by current contributions as recorded in the individual account statement the fund sends you every year. </p><p></p><p>It may be that if a fund looses a ton of money then the retirees may, if they as a group live long enough, exhaust the portion of the general fund's assets to which their Pension Credits entitle them, and then, well, the money has to come from somewhere. Maybe the fund would start redirecting current employer contributions away from their intended purpose and into the benefit checks of orphaned retirees. Again, I've been asking someone to explain how this works, if in fact they claim this is what's happening. But all I ever see are repeated general statements that 60% of UPS contributions are being consumed by other companies' retirees, without any details or proof. And now I'm told that nearly 100% of all employer's contributions, not just UPS', are being sucked into this retiree Black Hole. Wow! At this rate the entire state of Illinois has probably been sucked in, and surrounding states are being drawn toward the rim even as we speak.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 133820"] I don't deny that Central States has dug itself into a deep hole, but I'm not sure I understand why 100,000 retirees that "lack a contributing employer" must consume nearly all the contributions of the entire current employer group. Didn't these retirees have a contributing employer all along who contributed on their behalf. Isn't that how they earned the right to a pension, by having their contributing employer do what contributing employers do, namely, contribute? Can't those "orphan" retirees also use the funds contributed in years' past by their contributing employers on behalf of the many fellow employees who never achieved Vesting Status and so their contributions were forfeited and retained by the fund? Wasn't the benefit amount of some of these retirees frozen at a low rate years ago and hasn't it been eaten by inflation up until the time they were finally able to start collecting? Haven't the contributed funds been earning investment income all these years (other than the recent loss years, of course?) I'd like to know more about the definition of the phrase, "lack a contributing employer." If a retiree works for several different employers throughout his, say, thirty year career, are all of them said to be out of business, or only one, or what? It seems to me that a thirty year man with thirty years of employer contributions, from more than one employer, is not really different than a thirty year man with thirty years of contributions from one employer. Remember, any current contributions from a retirees' employer are not for the retiree, they are for the current, "Active" employees who are earning their way to their own thirty year pension. In effect, all retirees are without a contributing employer regardless of weather the employer still is in business and contributing or not, because all current contributions are contributed for the benefit of individual, current (Active) employees, not retirees. Retirees draw on past contributions. Active employees have individual Pension Credit accounts funded by current contributions as recorded in the individual account statement the fund sends you every year. It may be that if a fund looses a ton of money then the retirees may, if they as a group live long enough, exhaust the portion of the general fund's assets to which their Pension Credits entitle them, and then, well, the money has to come from somewhere. Maybe the fund would start redirecting current employer contributions away from their intended purpose and into the benefit checks of orphaned retirees. Again, I've been asking someone to explain how this works, if in fact they claim this is what's happening. But all I ever see are repeated general statements that 60% of UPS contributions are being consumed by other companies' retirees, without any details or proof. And now I'm told that nearly 100% of all employer's contributions, not just UPS', are being sucked into this retiree Black Hole. Wow! At this rate the entire state of Illinois has probably been sucked in, and surrounding states are being drawn toward the rim even as we speak. [/QUOTE]
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