Partial Service Pension

[BigUnionGuy]

I believe that the IBT/UPS and the UPS Pension plans have a 6 % penalty for every year prior to the normal retirement age of 65.

I do not believe that the 6 % penalty is exempt with both plans once you hit 30 years of combined service, it would be great if it was true....

I am not the pension expert.... but, I believe that's the case with any Taft-Hartley plan.

@Inthegame is more knowledgeable about these issues.

 

[GameCockFan]

Ok, this is how it works. If you take a "years of service pension", it's not subject to the 6% reduction, but it generally is a lesser amount. If you go with the "defined benefit pension", you will be penalized 6% per year you retire early. It's actually .005 X number of months early. Ups will figure your pension both ways, compare them and give you the higher of the two amounts. On the retirement calculator on Upsers.com, go to single scenario calculation and put in the date you want to retire and the date you want benefits to begin. After its calculated you will see a yellow box under your full time pension amount (on the left) that says "Calculation Details" Click that box. Another browser window will open, click the link in that window and a pdf will download. Open it and it will show the calculations they used to find your pension amount.

I've attached mine for retiring September 2020 and the second is for retiring at 60. I can go through it if you have any questions. But $3500-$3700 sounds about right for 28 full, 4 pt. There going to ding you for using the part time years as credit. As you see on mine without using the part time I only qualify for the 25 and out and being under 55 knocks it down to $2200. Using the pt years gets me 4.5/27.5 or .86094 X $4000. or $3443 + part time of $130. Which is much more than the defined benefit amount of $1300 because they docked me half a percent per month for the 132 months early I would be retiring. Last part at bottom just shows the two amounts and you get the greater of the two.

 

[DELACROIX]

A couple of years ago we had a 22.3 retire with 30 combined service years, he had 20 years P/T and 10 years friend/T under the IBT/UPS formula in the Central and retired around the age of 55.

He discovered that if he would of stayed P/T under the UPS Pension Plan formula under Article 34...
he could of left with a better monetary benefit than if he would of by going Full Time. When he retired he was subject to that 6 % penalty prior to age 65 for his vested time under both pension plans...His monetary benefits where reduced 60% for his P/T years and 60% for his friend/T years..

 

[Overpaid Union Thug]

Ok, this is how it works. If you take a "years of service pension", it's not subject to the 6% reduction, but it generally is a lesser amount. If you go with the "defined benefit pension", you will be penalized 6% per year you retire early. It's actually .005 X number of months early. Ups will figure your pension both ways, compare them and give you the higher of the two amounts. On the retirement calculator on Upsers.com, go to single scenario calculation and put in the date you want to retire and the date you want benefits to begin. After its calculated you will see a yellow box under your full time pension amount (on the left) that says "Calculation Details" Click that box. Another browser window will open, click the link in that window and a pdf will download. Open it and it will show the calculations they used to find your pension amount.

I've attached mine for retiring September 2020 and the second is for retiring at 60. I can go through it if you have any questions. But $3500-$3700 sounds about right for 28 full, 4 pt. There going to ding you for using the part time years as credit. As you see on mine without using the part time I only qualify for the 25 and out and being under 55 knocks it down to $2200. Using the pt years gets me 4.5/27.5 or .86094 X $4000. or $3443 + part time of $130. Which is much more than the defined benefit amount of $1300 because they docked me half a percent per month for the 132 months early I would be retiring. Last part at bottom just shows the two amounts and you get the greater of the two.

A lot of people I work with went straight for the multi scenario calculator and freaked out because it does not include their part time years. I said you have to go to the single scenario calculator to see both so you can add them together. Otherwise you would only get the calculation of less than 30 years.

 

[GameCockFan]

A couple of years ago we had a 22.3 retire with 30 combined service years, he had 20 years P/T and 10 years friend/T under the IBT/UPS formula in the Central and retired around the age of 55.

He discovered that if he would of stayed P/T under the UPS Pension Plan formula under Article 34...
he could of left with a better monetary benefit than if he would of by going Full Time. When he retired he was subject to that 6 % penalty prior to age 65 for his vested time under both pension plans...His monetary benefits where reduced 60% for his P/T years and 60% for his friend/T years..

There isn't a 6% reduction for a years of service pension. It's well covered in the SPD. Now he faced a large reduction for the large number of pt years and I don't doubt he would have been better off with a full time pt pension. 10/30 is .333 of what $3500? a couple years ago? 1,166 plus the part time (complete guess 20/30ths of a 1000 pt is 667).

 

[oldngray]

There isn't a 6% reduction for a years of service pension. It's well covered in the SPD. Now he faced a large reduction for the large number of pt years and I don't doubt he would have been better off with a full time pt pension. 10/30 is .333 of what $3500? a couple years ago? 1,166 plus the part time (complete guess 20/30ths of a 1000 pt is 667).

When I checked I think the break even point between the 2 ways of calculating was around age 58 or so. With all the differences between locals it is almost pointless to ask HR. All they will do is read from their one size fits all script and will be clueless about real questions.

 

[BrownScully]

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[DELACROIX]

There isn't a 6% reduction for a years of service pension. It's well covered in the SPD. Now he faced a large reduction for the large number of pt years and I don't doubt he would have been better off with a full time pt pension. 10/30 is .333 of what $3500? a couple years ago? 1,166 plus the part time (complete guess 20/30ths of a 1000 pt is 667).

The years of service pension benefit only applies to the plans that you have vested time in..For those in the Central and Southern most of us have two separate pension plans...One for our Part Time years and another for our Full Time years..If for example you have 25 yrs P/T when you retire you are eligible for that plans listed benefit, if you do not that 6% penalty is applied.

Same with your Full Time years..I know it is not right and should of been negotiated back in 2007 when most of us left Central States..but it didn’t..

Management’s retirement plan only reduces their early retirement benefits by 3%.

 

[GameCockFan]

The years of service pension benefit only applies to the plans that you have vested time in..For those in the Central and Southern most of us have two separate pension plans...One for our Part Time years and another for our Full Time years..If for example you have 25 yrs P/T when you retire you are eligible for that plans listed benefit, if you do not that 6% penalty is applied.

Same with your Full Time years..I know it is not right and should of been negotiated back in 2007 when most of us left Central States..but it didn’t..

Management’s retirement plan only reduces their early retirement benefits by 3%.

Maybe were just misunderstanding each other in some way. I to, am in separate plans, 3 to be exact. A PT plan, Central States, and IBT/UPS after 2008. If you have 25 in a pt plan you're vested, if you add in 5 in a full time plan you're vested in that plan as well. There is NOT a 6% reduction for a years of service pension except for people under 57 with 20 years of service, 6% reduction under 57 down to a minimum age of 50. Now, a closer reading does seem to say that the part time years must be in the UPS part time pension, which covers the majority of part timers.

 

[DELACROIX]

The example given with Eric on your attachments clearly states that he retired at age 65. There is no penalty when you reach your Normal Retirement age of 65. A couple of sentences below does state there is a 6 % penalty prior to age 65.

The service retirement would not be subject to the 6 percent penalty.. But you still have to have the vested years in each plan required to collect those totals.

It would be great if anybody else can jump on this question and verify our interpretations on these pension plans. We both can be wrong..

 

[BrownScully]

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[PT Car Washer]

Read the SPD more carefully, it says payable from the age of 50 to 65 because it is based on a pro-rata portion of the 30yr Service Pension. When he turns 65 (as GC fan pointed it out with the three cks comment) he will get cks from UPS/IBT-CSPF and UPS Pension Plan. As GCfan has shown us from his estimate on the UPSers website. The 6% you are reading is from a Deferred Vested Benefit.

Isn't the Deferred Vested Benefit what he will be receiving if he wants to collect before he turns 65? I have to agree with DELACROIX on this one. That is the way I had always understood the Pension if you try and combine the 2 Pensions without meeting the minimum years for either one.

 

[Overpaid Union Thug]

Maybe were just misunderstanding each other in some way. I to, am in separate plans, 3 to be exact. A PT plan, Central States, and IBT/UPS after 2008. If you have 25 in a pt plan you're vested, if you add in 5 in a full time plan you're vested in that plan as well. There is NOT a 6% reduction for a years of service pension except for people under 57 with 20 years of service, 6% reduction under 57 down to a minimum age of 50. Now, a closer reading does seem to say that the part time years must be in the UPS part time pension, which covers the majority of part timers.

My calculation details.

 

[Jones]

And I thought my pension was complicated, sweet jesus.

 

[DELACROIX]

If you think that is complicated you ought to read the ERISA act dealing with pension plans.

Bottom line is that the company and the union leadership do not want you to retire early. With regards to the Central and Southern it would benefit the company if you waited to retire at age 65, your vested time under Central States would reduce their liability costs under the IBT/UPS plan currently in place.

The union leadership wants you to retire at 65 also, once you qualify for Medicare as a retiree you are automatically dropped from Team Care. This saves the Health and Welfare provider the costs of paying for non contributing retirees.

Those years vested as a part timer under the UPS Pension Plan are permanently locked in place according to how many years you have credited and when you became full time. Those years are subject to that 6% penalty prior to again age 65..Again another carrot on a stick to make you work longer than you want.

 

[BrownScully]

Content deleted by poster's request.

 

[GameCockFan]

It's really not complicated at all. There are two types of full time pensions:

1.) Defined benefit.
You get an accrual amount based on the year you worked. During the life of this contract it's $175.
If you go through and add up the accrual amounts for the years you worked you will receive that monthly when you retire. For example, years 93-97 it was 135. 1998-2003 it was 160. (I'm just making these up but you can look back thru contracts and get the actual figures. $175 is the actual figure for this contract. Older contracts it wasn't a flat amount it increased yearly) Add all those up 130+160+175+xxx for all the years you worked .Lets just say it comes to $5700. Then UPS will look at your age, are you at normal retirement age? (which is a different number depending on when you started, mine is age 62 not 65) If yes you get the full amount. If no then follow the formula listed in the attachments I uploaded. It's [1-((a)* .005))] where (a) is the number of months before your normal retirement age. Example you retire 12 months early, It's 1 -(12*.005), 1-.06, .94 Multiply that by $5700 you get $5358. That's your penalty.

2) Years of service pension.
You work X number of years you get X amount of money. There is an exception for people with 20-25 years and ages 50-57. Once you reach 30 years you will receive $3800 per month +100/yr of service after that REGARDLESS OF THE AGE OF THE RETIRING EMPLOYEE. At 35 years it's $4300 per month/regardless of age but no extra for going past 35 years. THERE IS NO 6% REDUCTION IN THIS TYPE OF PENSION. Hence the name it's commonly referred to as 30 and out, 35 and out. I attached a screen shot of the language from the Atlantic Area Supplement.

Starting with this contract you can combine pt and full time years to qualify for a years of service pension. However, you have to divide the actual ft years by the combined years 28/32 = 0.875 Thats the prorated amount (penalty if you will) that you will receive for combining the years of service. S0 32 years is 4000 * 0.875 =3500. Once again there isn't a 6% reduction in any service pension because as it states it's payable at any age (unless your 50-57 and have 20-25 years, and thats clearly covered) after you have 30 years or more. UPS will run both scenarios and determine the amounts your eligible for, compare the two amounts and you will receive the higher of the two amounts.

Now there will be different checks, from pt plan/central states/UPS after age 65 and all from UPS before 65. Don't let that confuse you. UPS will also make up the difference if CS doesn't pay their share. (which they won't, it just a matter of time till they're bankrupt) It's my guess that UPS offer you a buyout of the CS portion to reduce they're liability and get it off there books. But as each year passes and people retire they're exposure to the CS liability becomes less and less.

 

[GameCockFan]

Overpaid's calculation is the same as GCfan except they are shorting him or her(whichever it may be) on the Partial Service Pension on the part-time because under the new contract the amount for a 30yr service pension is $1950. So his PT amount should be 1950x9=17550/30=$585. Under the guidelines of the Partial Service Pension there is no penalty for being under the age of 65 if you have 30 or more years of service credit. Delacriox makes a some very good points why they don't what you to retire early. It's all about the coin! I can't imagine anyone hired in the last 5 yrs even making it to 20 the way they work them! I'm pretty sure the union and the company would like see us old timers out because a lot of newbies do not know the phrase "A fair days work for a fair days pay"

I don't think he's being shorted though. He did say 28 full 4 pt? So 4/32 of his pt pension of 1950. 4/32= 0.125 * 1950 = $243.75

 

[DELACROIX]

Your formula about the P/T Pension of 1,950 is based on if you left under the current contract, but let us say you left the Part Timer position and went Full Time you will be starting anew under a whole new pension plan. We have to remember that there were some (not much) contractual increases with the Part Time Pension over the years, so if you left in l987 your part time years will be a certain percentage of what that plan was paying for a standard 30 year pension under that Article 34 contract language.

 

[Overpaid Union Thug]

I don't think he's being shorted though. He did say 28 full 4 pt? So 4/32 of his pt pension of 1950. 4/32= 0.125 * 1950 = $243.75

Mine will be 21 years full time and 9 years part time. 2028 would be my last peak and I’d be on vacation the first seven weeks of 2029. My 30 year anniversary would hit under my vacation time and I’d come back and work one day and then retire. That’s the plan anyway.