Re: 804 Pension
I love this analogy. Yes, it's true, UPS now has representation of one seat on most pension boards. However, that wasn't always the case. The board is 1/2 company reps (all companies not just UPS) and 1/2 Teamster officials. So how is it that the Teamsters don't get at least 1/2 the blame? I know you won't believe me since I'm in managment, but do this. Bring to your financial planner what UPS has put in for your retirement over the years. Then ask him based on this amount of savings how much you should be able to get in an annuity from this money. I believe you will find it is way way way more then what you will be receiving from the Teamsters pension fund. If UPS put in all that money for your pension and you are not receiving what your financial planner says is a reasonable return from that money. You should ask yourself where did the money go. I'll give you a hint. UPS didn't take the money back.
You're making the same financial error that almost everyone else is when it comes to evaluating the return UPSers should get on the money UPS contributes to the Teamsters-sponsored pension plans. You are assuming the money is automatically the property of the UPSers in whose name it was contributed. In fact, it isn't. At least not until each UPSer "earns" it by qualifying under the various plan provisions.
In effect, UPSers must earn their pension benefits twice. First, they earn the money as part of their total compensation package, and UPS contributes the money to the fund based on hours worked. But the contributions have strings attached. So secondly, the UPSer must qualify under the various rules of the pension plan and "earn" the right to claim those funds as his own in the form of a future pension benefit. The many UPSers who never achieve Vesting Status, for example, may have had up to $50.000 (very rough estimate) contributed on their behalf, but not a single penny of it is theirs, because they failed to "earn" the five years of Vesting Status that is necessary to claim the funds. Other UPSers will for various reasons fail to qualify for Early Retirement or Disability Retirement, or Thirty-And-Out Retirement, etc. because they didn't last long enough at UPS to pass the necessary milestones. All monies not "earned" in the second sense are forfeited to the fund. Period.
For all I know, the pension funds may get the same rate of return on their money as the financial advisor you mention. Maybe they both use the same, or a comparable, Wall Street firm. But if the UPSer's money in the pension fund has strings attached, the UPser may have to settle for only a portion of the money, or none at all.
It's like when a rich uncle promises to remember you in his will. He invests "your" money wisely during his lifetime but then you discover at the Reading Of The Will that you only get the money if you marry a redhead, or move to a certain State, or go into a specific line of business. Some scholarships have various non-academic requirements attached to them as well. If you don't qualify, you don't qualify. You forfeit the money. Period. When you, or UPS, knowingly forfeit money, it's not appropriate to carry on as if the money was somehow wrongly taken from you.
It's unfair to compare an unrestricted sum of money to a restricted sum of money. Rightly or wrongly, UPS knowingly sent the money to a fund with serious restrictions attached. You can't just ignore those restrictions and pretend the money is yours to take out and invest on your own.
Incidently, regardless of how many UPS executives are Trustees of the various pension plans, all Employer Trustees are endorsed by UPS (and by every other participating employer as well.) Read the pension article in each regional supplement and you will see that UPS ratifies the Employer Trustees as their own, and ratifies all legal actions taken by them, past and future. Here in New England it's Supplement Article 69 - Pension Fund, (and likewise for Article 68 - Health & Welfare.)
