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YRCW bankruptcy impact on UPS employee pensions
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<blockquote data-quote="JonFrum" data-source="post: 655684" data-attributes="member: 18044"><p>YRCW's employees stopped being active participants in the various Teamster multi-employer pension funds several months ago. Therefore those employees have not been gaining any further pension credits.</p><p> </p><p>If YRCW goes bankrupt, pension funds will benefit from employees who had less than the required five years of vesting. The funds get to keep those years of contributions and don't owe those employees a cent. </p><p> </p><p>Some vested employees will find they are "retireing" prematurely and have to settle for a reduced pension because they don't have sufficient age or pension credit to retire at the intended higher rates. The funds benefit anytime an employee is forced by circumstances to settle for a lesser pension amount, or is required to wait until a certain age, like 65, to begin collecting. (A 25-year old with the required five year's vesting, would be entitled to a trivial pension payable forty years from now!!! Imagine what inflation will do to the purchasing power of that already small amount.) The funds benefit from the erroding effects of inflation on all future benefit payments because pensions are not protected by a cost-of-living adjustment. </p><p> </p><p>Some employees will get other jobs covered by one or another Teamster pension plan, and will continue to acrue pension credits based on the contributions made by their new employers on their behalf. The ability to switch employers and still be covered by pension contributions is what multi-employer plans are all about.</p><p> </p><p>The pension plans will sue YRCW to collect the Withdrawal Liability owed and have a claim on whatever assets the bankrupt company may still have, if any. This is where the funds will loose money.</p><p> </p><p>The funds will have one less major contributing employer ($40 million per month) helping to keep the funds afloat. And one less major employee group earning entitlements to future benefits.</p><p> </p><p>The funds can not cut pension credits already earned by UPSers unless a fund is in dire financial straights. They can cut future benefit accrual rates if they feel it is necessary to prevent getting into dire straights.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 655684, member: 18044"] YRCW's employees stopped being active participants in the various Teamster multi-employer pension funds several months ago. Therefore those employees have not been gaining any further pension credits. If YRCW goes bankrupt, pension funds will benefit from employees who had less than the required five years of vesting. The funds get to keep those years of contributions and don't owe those employees a cent. Some vested employees will find they are "retireing" prematurely and have to settle for a reduced pension because they don't have sufficient age or pension credit to retire at the intended higher rates. The funds benefit anytime an employee is forced by circumstances to settle for a lesser pension amount, or is required to wait until a certain age, like 65, to begin collecting. (A 25-year old with the required five year's vesting, would be entitled to a trivial pension payable forty years from now!!! Imagine what inflation will do to the purchasing power of that already small amount.) The funds benefit from the erroding effects of inflation on all future benefit payments because pensions are not protected by a cost-of-living adjustment. Some employees will get other jobs covered by one or another Teamster pension plan, and will continue to acrue pension credits based on the contributions made by their new employers on their behalf. The ability to switch employers and still be covered by pension contributions is what multi-employer plans are all about. The pension plans will sue YRCW to collect the Withdrawal Liability owed and have a claim on whatever assets the bankrupt company may still have, if any. This is where the funds will loose money. The funds will have one less major contributing employer ($40 million per month) helping to keep the funds afloat. And one less major employee group earning entitlements to future benefits. The funds can not cut pension credits already earned by UPSers unless a fund is in dire financial straights. They can cut future benefit accrual rates if they feel it is necessary to prevent getting into dire straights. [/QUOTE]
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