Dreaded Pension Funding Level Letter

[klein]

SSI will still be there but will not be there for my children. I consider SSI to be my "fun money".

All it takes is China to be like the EU, (in regards to Greece), and tell the US, unless you cut this and that, there won't be anymore money.
It can happen so quickly.

Besides all that. You really think the US government will still keep handing out a full SSI, until it's totally gone, or will they just reduce it, so everyone can still have a little of it?

 

[moreluck]

If Obama. Pelosi & Reid are still in place, they'll just print more money and have Barney Frank drop it like confetti from a helicopter !!

 

[hellfire]

this topic DISGUSTS ME BEYOND WORDS im ready to punch my monitor %$%^#$$%^ WHY do teamsters doing the same $%^$^job DESERVE more more money per month?????? Im in central states and i get crap after 30 yrs...........im freaking disgusted

 

[klein]

this topic DISGUSTS ME BEYOND WORDS im ready to punch my monitor %$%^#$$%^ WHY do teamsters doing the same $%^$^job DESERVE more more money per month?????? Im in central states and i get crap after 30 yrs...........im freaking disgusted

Same here, your not alone. And it's just not compnay pensions, but government ones, too.
Handing it all out now, and nothing will be left for the rest of workers/people.

 

[1989]

this topic DISGUSTS ME BEYOND WORDS im ready to punch my monitor %$%^#$$%^ WHY do teamsters doing the same $%^$^job DESERVE more more money per month?????? Im in central states and i get crap after 30 yrs...........im freaking disgusted

scams...Stanford and Madoff were merely executing pension and SS concepts.

 

[Jones]

this topic DISGUSTS ME BEYOND WORDS im ready to punch my monitor %$%^#$$%^ WHY do teamsters doing the same $%^$^job DESERVE more more money per month?????? Im in central states and i get crap after 30 yrs...........im freaking disgusted

Nobody "deserves" anything, some locals just did a better job managing their funds (a little good luck probably didn't hurt either). We get paid darn a good wage, if you're halfway competent with your money you should be fine even without a pension.

 

[TechGrrl]

this topic DISGUSTS ME BEYOND WORDS im ready to punch my monitor %$%^#$$%^ WHY do teamsters doing the same $%^$^job DESERVE more more money per month?????? Im in central states and i get crap after 30 yrs...........im freaking disgusted

Dude, YOUR UNION administers your pension fund. Except UPS paid $6 billion to buy itself out of Central States, and take care of UPS employees only. Otherwise, your pension would be in even more trouble, because the fund management at Central States sucked. Now, you get the same fund management that UPS top management pensions gets. Which is still no guarantee of anything, because the stock market is a crap shoot, rigged for the insiders at the banks. The rest of us are just along for window dressing at the tables. But at least if your boat sinks, it's got Scott Davis' pension in it, too.

 

[hellfire]

Nobody "deserves" anything, some locals just did a better job managing their funds (a little good luck probably didn't hurt either). We get paid darn a good wage, if you're halfway competent with your money you should be fine even without a pension.

let me guess, your not in central states

 

[UpstateNYUPSer(Ret)]

let me guess, your not in central states

Nothing gets by you.

If you know that your pension is crap then you must supplement it with other retirement investments.

 

[JonFrum]

Dude, YOUR UNION administers your pension fund. Except UPS paid $6 billion to buy itself out of Central States, and take care of UPS employees only. Otherwise, your pension would be in even more trouble, because the fund management at Central States sucked. Now, you get the same fund management that UPS top management pensions gets. Which is still no guarantee of anything, because the stock market is a crap shoot, rigged for the insiders at the banks. The rest of us are just along for window dressing at the tables. But at least if your boat sinks, it's got Scott Davis' pension in it, too.

Believe it or not, for decades the assets of the Central States Pension Fund have been managed by reputable investment firms under the watchful eye of a Judge by Court Decree.

When UPS pulled out of Central States, it left the fund, and its retirees, (including orphened UPSers,) worse off.

All pension funds use investment managers drawn from the same pool of big-name firms. When you switch from Central States to the new plan for Central State Full-timers, you are probably just switching from one branch of Goldman Sachs to another, or from one interchangeable Wall Street firm to another down The Street.

You are also switching from a fund run by a board of trustees that is half Teamster officials, to one that is, well, half Teamster officials.

And now every detail of the new plan is up for renegotiation with each new labor contract, greatly complicating an already complicated situation.

 

[hellfire]

Believe it or not, for decades the assets of the Central States Pension Fund have been managed by reputable investment firms under the watchful eye of a Judge by Court Decree.

When UPS pulled out of Central States, it left the fund, and its retirees, (including orphened UPSers,) worse off.

All pension funds use investment managers drawn from the same pool of big-name firms. When you switch from Central States to the new plan for Central State Full-timers, you are probably just switching from one branch of Goldman Sachs to another, or from one interchangeable Wall Street firm to another down The Street.

You are also switching from a fund run by a board of trustees that is half Teamster officials, to one that is, well, half Teamster officials.

And now every detail of the new plan is up for renegotiation with each new labor contract, greatly complicating an already complicated situation.

jon,, why then are Central States members getting less?

 

[JonFrum]

Central States has been hurt by the same market downturns as all other funds, but it is in worse shape than most. This is mostly because Central States has a huge pool of retirees drawing benefits relative to a smaller pool of actively working contributing participants. Made worse by UPS withdrawing 44,000 active participants.

The Central States retirees probably contributed suficient funds during their working years to fund their own retirement in full. Unfortunately, the stock market has sunk several times since and so the assets to pay retirees are no longer all there. This shortfall must be made up by skimming money from the contributions of participants who are still working. So current members earn relatively less future pension benefits for their relatively high contributions.

Bad luck in investing also played a part. Any fund that was heavily invested in stocks when stocks dropped was hit harder than a fund who's portfolio wasn't so heavily weighted with stocks at those times.

UPS paid $6.1 billion in a Withdrawal Liability payment to Central States, which didn't get any UPSer any additional benefits at all. Had they made comparable payments in the form of contributions, imagine what pension increases such a sum could have bought.

UPS paid $1.7 billion just to initially fund their new pension plan's feature that restored UPSers right to collect benefits before age 65. If that money had been given to Central States instead, Central States could have restored UPSers right to collect benefits before age 65.

From Central States point of view UPS chose to make a bad situation worse.

 

[hellfire]

Nothing gets by you.

If you know that your pension is crap then you must supplement it with other retirement investments.

i will be a adult movie star, for extra cash, when i retire. Problem solved

 

[1989]

Central States has been hurt by the same market downturns as all other funds, but it is in worse shape than most. This is mostly because Central States has a huge pool of retirees drawing benefits relative to a smaller pool of actively working contributing participants. Made worse by UPS withdrawing 44,000 active participants.

The Central States retirees probably contributed suficient funds during their working years to fund their own retirement in full. Unfortunately, the stock market has sunk several times since and so the assets to pay retirees are no longer all there. This shortfall must be made up by skimming money from the contributions of participants who are still working. So current members earn relatively less future pension benefits for their relatively high contributions.

Bad luck in investing also played a part. Any fund that was heavily invested in stocks when stocks dropped was hit harder than a fund who's portfolio wasn't so heavily weighted with stocks at those times.

UPS paid $6.1 billion in a Withdrawal Liability payment to Central States, which didn't get any UPSer any additional benefits at all. Had they made comparable payments in the form of contributions, imagine what pension increases such a sum could have bought.

UPS paid $1.7 billion just to initially fund their new pension plan's feature that restored UPSers right to collect benefits before age 65. If that money had been given to Central States instead, Central States could have restored UPSers right to collect benefits before age 65.

From Central States point of view UPS chose to make a bad situation worse.

The central states got initially a ten year lump sum contribution for those 44,000 upsers that were withdrawn and have 44,000 less liabilities for it. You can't keep throwing good money at bad money. Just how long has CS had to clean up their books? Looks like it was a good move for UPS but a better move for UPS employees. Has congress looked into their books lately?

 

[JonFrum]

Most union pension funds were well funded during the '90s. The huge Western Conference Fund was fully funded until just a few years ago. But things went south in 2000 and beyond with the stock market crashes.

Both the Central States SE and SW Areas Pension Plan and the seperate Central States SE and SW Areas Health & Welfare Plan have been monitored by the Court since 1982. A Court appointed monitor oversees every aspect of the operations and reports to the Judge quarterly.

Annual fund financial reports are available free (email registration required) here . . .
http://freeerisa.benefitspro.com/

Annual H&W financial reports are available free (email registration required) here . . .
http://www.guidestar.org

Annual actuarial information is available free here . . .
http://askebsa.dol.gov

Annual Endangered and Critical Status Notices are available free here . . .
http://www.dol.gov

TDU has articles and reports as well . . .
http://www.tdu.org

 

[TechGrrl]

Central States has been hurt by the same market downturns as all other funds, but it is in worse shape than most. This is mostly because Central States has a huge pool of retirees drawing benefits relative to a smaller pool of actively working contributing participants. Made worse by UPS withdrawing 44,000 active participants.

But, see, the real problem with Central States, as with all other multi-employer funds, was that there were a huge number of trucking companies that went out of business, leaving UPS holding the bag for not only UPS drivers, but all those other drivers retired from the dead trucking companies. Multi-employer funds may have made sense before trucking deregulation, but once deregulation hit, and a whole bunch of companies couldn't compete, the writing was on the wall.

The Central States retirees probably contributed suficient funds during their working years to fund their own retirement in full. Unfortunately, the stock market has sunk several times since and so the assets to pay retirees are no longer all there. This shortfall must be made up by skimming money from the contributions of participants who are still working. So current members earn relatively less future pension benefits for their relatively high contributions.

Bad luck in investing also played a part. Any fund that was heavily invested in stocks when stocks dropped was hit harder than a fund who's portfolio wasn't so heavily weighted with stocks at those times.

You pay your fund managers to balance the mix of assets to get the return you need, while minimizing risk. They have actuaries to forecast how much money they need next year, the year after, the year after that, and so on. The assets to pay off next year's liabilities needs to be in highly liquid cash equivalents, with low risk. The further out the obligation, the riskier (i.e. stocks) the asset can be, since you have more time to ride out the business cycle and recover from down markets.

UPS paid $6.1 billion in a Withdrawal Liability payment to Central States, which didn't get any UPSer any additional benefits at all. Had they made comparable payments in the form of contributions, imagine what pension increases such a sum could have bought.

No increases at all; that money represented UPS' obligation to the OTHER retirees from OTHER companies. What UPS bought with that money was freedom from further drain on UPS teamsters' pensions by OTHER COMPANIES RETIREES.

UPS paid $1.7 billion just to initially fund their new pension plan's feature that restored UPSers right to collect benefits before age 65. If that money had been given to Central States instead, Central States could have restored UPSers right to collect benefits before age 65.

From Central States point of view UPS chose to make a bad situation worse.

UPS didn't choose anything; it NEGOTIATED with Central States to do this deal. Two sides to every deal, man. From UPS retirees' point of view, UPS bought them free of the obligation to fund retirees from dead companies. Dude, TANSTAAFL!

 

[JonFrum]

If a multi-employer fund is fully funded, as the Western Conference Fund was until a few years ago, and as some other funds were in the past, then UPS would not owe any money to the fund for retirees of dead companies. It's only if the fund's assets drop, that UPS and other currently contributing employers must make up the shortfall. That's the built-in insurance feature of multi-employer funds that UPS agreed to.

UPS chose to pull out of Central States at a time when its assets had fallen significantly, and so it owed a huge Withdrawal Liability payment. Kind of like getting out of the stock market by selling your stock after the market has hit bottom.

There is no negotiating in determining the amount of Withdrawal Liability. UPS owed the debt, and when Central States was informed of UPS' intention to withdraw, they calculated the amount and sent UPS the bill as the law requires.

I know how tempting it is to think that a professional money manager should be able to manage money and make a healthy rate of return, but apparently it just isn't that simple. Lots of professionals make only a small return, or even loose money. Of course, if the stock and bond and money markets all go bad at the same time, even the best investment managers will probably loose money. A falling tide lowers all boats.

Usually employers and employer trustees try to avoid contributing enough money to fund the plan 100%. So when the markets drop, it suddenly generates a financial crisis as the fund's funding level drops even further. If employers had fully funded the plan in the first place, or better still, over-funded it, there wouldn't be such a crisis. (Unions and union trustees may favor underfunding as well.) The law allows such underfunding in multi-employer funds.

In single employer funds, the law requires companies like UPS to contribute as much money as necessary every year to achieve full funding, or something very close to it. UPS has no choice, and so UPS quietly contributes the money, without any comotion.

UPS has been fully aware of the rules of multi-employer funds, and the dynamics of how they operate since they joined in the 1950s. Why do you suppose they choose to join in the first place, and stay for so long even in Central States, and agree to continue in all the other multi-employer funds into the future?

Techgrrl, is Tieguy your father? This pension stuff seems familiar.

 

[Old International]

Central States was badly hurt by several trucking companies that went belly up. Carolina, Mclean, just to name a few. When the companies died, central states was on the hook for the pensions, but didn't have the died companies providing for the input to the plan. To make things worse, UPS drivers make a fair more then other companies, so our contribution is larger. These two facts, along with bad decisions in the 2003? contract, have doomed central states.

 

[JonFrum]

Central States was also hurt when they were pressured to lowered the Vesting requirement from ten years to five. It was a nice thing to do, but it made a lot more people eligible for retirement benefits, and cost the fund a fortune.

 

[TechGrrl]

If a multi-employer fund is fully funded, as the Western Conference Fund was until a few years ago, and as some other funds were in the past, then UPS would not owe any money to the fund for retirees of dead companies. It's only if the fund's assets drop, that UPS and other currently contributing employers must make up the shortfall. That's the built-in insurance feature of multi-employer funds that UPS agreed to.

UPS chose to pull out of Central States at a time when its assets had fallen significantly, and so it owed a huge Withdrawal Liability payment. Kind of like getting out of the stock market by selling your stock after the market has hit bottom.

There is no negotiating in determining the amount of Withdrawal Liability. UPS owed the debt, and when Central States was informed of UPS' intention to withdraw, they calculated the amount and sent UPS the bill as the law requires.

I know how tempting it is to think that a professional money manager should be able to manage money and make a healthy rate of return, but apparently it just isn't that simple. Lots of professionals make only a small return, or even loose money. Of course, if the stock and bond and money markets all go bad at the same time, even the best investment managers will probably loose money. A falling tide lowers all boats.

Usually employers and employer trustees try to avoid contributing enough money to fund the plan 100%. So when the markets drop, it suddenly generates a financial crisis as the fund's funding level drops even further. If employers had fully funded the plan in the first place, or better still, over-funded it, there wouldn't be such a crisis. (Unions and union trustees may favor underfunding as well.) The law allows such underfunding in multi-employer funds.

In single employer funds, the law requires companies like UPS to contribute as much money as necessary every year to achieve full funding, or something very close to it. UPS has no choice, and so UPS quietly contributes the money, without any comotion.

UPS has been fully aware of the rules of multi-employer funds, and the dynamics of how they operate since they joined in the 1950s. Why do you suppose they choose to join in the first place, and stay for so long even in Central States, and agree to continue in all the other multi-employer funds into the future?

Techgrrl, is Tieguy your father? This pension stuff seems familiar.

The negotiations came in the 2003 contract. Calculating the amount was more or less determined, but my understanding was that UPS could not have withdrawn from Central States without Teamster Agreement. This was one of the main sticking points in the 1997 strike: UPS proposed the deal back then, but Ron Carey and the leadership of the union wouldn't agree to it. UPS could not unilaterally withdraw from Central States, no matter how much they paid.

And I understand exactly how money managers are supposed to manage pension funds. It didn't seem apparent that you did. Go back to my statement about how multi-employer pension funds made sense in a regulated world, and lost viability in the 80's. The history of the misuse of the Central States funds are well documented. It wasn't just bad luck in the market.