Pension vs. 401(k)

[browniehound]

Let's face it. Defined benifit plans (pensions) are going the way of the dinosuars and that is extinct. For us guys under 40, we need to take a proactive approach to retirement. As the years go by we learn about pension plans from very reputable companies (GE comes to mind) being axed. Its only a matter of time that it happens at UPS.

On the bright side, the Teamster-UPS 401(k) plan offers 11 or 12 funds, plus a self-managed account in which you can choose stocks from all publicly traded companies plus thousands of mutual funds.

So here I am on my soap-box for the next contact. Let's get rid of the pension (its going to happen anyway, its just a matter of time) and go for a UPS match on our 401(k).

Think about it. If UPS could give us, teamster employees, a 401(k) match or bonus in the amount that they are pouring down the drain in pension contributions, we would all be living a great retirement.

Us under 40 guys and gals (not just UPS) are getting the stinky end of the stick. We're contributing to social security but will never collect it. UPS is contributing to the pension on our behalf and we will never collect. THAT either.

So I hope in the next contract we can get rid of the pension and the money from that was previously contributed, UPS will match in the 401(k)'s or maybe a traditional IRA or evan a Roth IRA contribution.

My 401k is kicking ass now that the market is doing well. If I could get help from UPS in the form of a match or a contribution to an IRA, I think it would be beneficial to both employee and employer(company wins because its not contributing to other companies' retiries and we win with a secure retiremient).

Problem is, the teamsters wouldn't allow anyone to get their hands on THEIR money. My vote is to get rid of the pension plan and instead match us in the 401K and pay us (perhaps) in bonuses that can only be contributed into a Roth or traditiona IRA.

When I turn 57 in 2030, I know my body is going to be on the brink. But if I invest early, smartly, and regularly, I will not need to be dependent on the teamster pension plan. So my approach is to plan as if that and SS and the teamster plan is not going to be there.

God bless everyone.

 

[DorkHead]

When I turn 57 in 2030, I know my body is going to be on the brink. But if I invest early, smartly, and regularly, I will not need to be dependent on the teamster pension plan. So my approach is to plan as if that and SS and the teamster plan is not going to be there.

So I take it your 27 yrs old and have 7 years invested in your career with UPS? It`s good you`re contributing to your 401k. Max out as much as you can. I have been in the 401k since it began.......but as for your idea, it is very selfcentered. What about all previous retirees? Don`t they deserve to keep getting what was promised to them? Or do you just cut them off because you don`t care. Campaign contributions to pro labor politicians to pass bills that favor us are extremely important and will benefit all labor including yourself! You`re smart to plan for your retirement relying on more than just your pension. I wish alot more of us upsers would. I just think you need to understand there are more issues involved that are equally important. Good luck and keep contributing to that 401k.

 

[browniehound]

[No Dorkhead, Prior retirees would have to get their promised beneifits. I'm talking about a certain cut-off date for us young workers. We are going to get screwed if things don't change with social security and our pensions. We are contributing OUR HARD EARNED money that will be pissed away by the time we reach 65 years old

quote=DorkHead;196928]When I turn 57 in 2030, I know my body is going to be on the brink. But if I invest early, smartly, and regularly, I will not need to be dependent on the teamster pension plan. So my approach is to plan as if that and SS and the teamster plan is not going to be there.

So I take it your 27 yrs old and have 7 years invested in your career with UPS? It`s good you`re contributing to your 401k. Max out as much as you can. I have been in the 401k since it began.......but as for your idea, it is very selfcentered. What about all previous retirees? Don`t they deserve to keep getting what was promised to them? Or do you just cut them off because you don`t care. Campaign contributions to pro labor politicians to pass bills that favor us are extremely important and will benefit all labor including yourself! You`re smart to plan for your retirement relying on more than just your pension. I wish alot more of us upsers would. I just think you need to understand there are more issues involved that are equally important. Good luck and keep contributing to that 401k.[/quote]

 

[DorkHead]

Funny how?

I`m sorry I don`t understand you`re reply "funny how" Cold you please explain?

 

[browniehound]

Funny how?

I`m sorry I don`t understand you`re reply "funny how" Cold you please explain?

Sure I'll explain. Joe Pesci in "Goodfellas" 'funny how?, like a clown? how am I funny? what the friend is so funny about me? 'I'm here to amuse you?

That was paraphrasing, but its a great scene you should rent it and see for yourself.

 

[browniehound]

Dorkhead wrote "but as for your idea, it is very selfcentered. What about all previous retirees? Don`t they deserve to keep getting what was promised to them? Or do you just cut them off because you don`t care"

Dorkhead,
No offense, but yes my retirement plan is selfcentered. It has to be. Its tough enough for me to plan for my retirement, why should I care about YOURS and anyone elses except for my wife? And why should I work hard every day to help YOU retire? Please tell me what I'm missing here?

 

[Anon Guy]

Dorkhead wrote "but as for your idea, it is very selfcentered. What about all previous retirees? Don`t they deserve to keep getting what was promised to them? Or do you just cut them off because you don`t care"

Dorkhead,
No offense, but yes my retirement plan is selfcentered. It has to be. Its tough enough for me to plan for my retirement, why should I care about YOURS and anyone elses except for my wife? And why should I work hard every day to help YOU retire? Please tell me what I'm missing here?

This thread is a great demonstration of the difference in attitudes towards retirement of the Gen-X and later folks vs. those raised under the 'old economy'.

In the past, much of the 'pro labor' movement has been of a collectivist bent. "We need to stick together to...protect our rights, protect our pension, pay etc.". In my opinion, the negative effect of that is a sense of entitlement that has no foundation in business realities. It also sets up benefits as a moral question (we DESERVE it!) instead of a market one, thus making the issue ripe for political exploitation at the peril of future stability.

The younger generation IMHO, who has in recent years seen how easily (and often) entitlement systems have been exploited, plus a marketplace changing so rapidly that there is no guarantee a company will be around in 30 years to make good on its promises, seeks a more direct and personally accountable system.

The positive aspects of this change seem to be; personal empowerment, a culture of ownership, and the alignment of personal goals with pro-business goals. The negative of course being; how to transition to such a system while still maintaining benefits already promised, how to retain the empowered workers, and how to help educate people to ensure they are adequately looking out for their own best interest (historically, not a good track record there).

How quickly and effectively things get sorted out, I think, will have a huge impact on how successful companies like UPS are. We have already seen in other threads the challenges faced by UPS in recruiting and retaining the best and brightest in the management ranks, I think the same issue exists in the Teamsters as well, just lagging by a few years.

There is probably going to be plenty of heated words and bad blood to go around before this is resolved, but it is a good thing that we can talk about it on forums like this as I feel it will help shape the opinions of decision makers on the way to making UPS a (hopefully) stronger company.

 

[sendagain]

Unfortunately, the unions have built a bad reputation over the years, and a lot of people who might benefit from union representation are frightened to unionize. Just look at how FedEx is abusing their ground employees and you can see how corporate America can take advantage of people. Do these people realize how bad they are being screwed, and is there any will to correct the situation? Their ability to hire, retain and increase a work force willing to do our job for less is going to have an adverse affect on us. We cannot maintain our level of benefits while these people will accept less. Our only hope is that they become educated about the wide differences in pay between our companies and do something about it. There does seem to be a lot of dumb people in America, and that is not a good thing.

 

[DorkHead]

No offense taken BH. But like it or not, you working hard everyday IS helping my retirement just like my working hard IS helping your retirement.

 

[tieguy]

something to add to the discussion in case you have not seen it.

May 10, 2007
http://www.teamster.org/07news/hn_070510_3.asp
The following is a statement from hall, Director of the Teamsters Parcel and Small Package Division and Co-Chairman of the National UPS Negotiating Committee
The Teamsters Union entered into early negotiations with UPS with the central objective of protecting our members’ pensions and health care.
The Negotiating Committee presented an economic proposal to UPS at the end of March, which included a demand for an increase in health and welfare and pension contributions of $2 per hour in the first year. Our proposal also included significant increases in wages and other economic conditions.
When National Master negotiations resumed after a break in which the supplemental committees met, United Parcel Service responded to our economic package with its own opening offer. What will capture the headlines is an offer to create a new, joint Teamsters-Company pension plan to cover full-time UPS employees who currently obtain their pension benefits from the Central States Fund.
In the past, the Company has attempted to create a Company plan that it would administer by itself. The current proposal would create a plan jointly administered by UPS and the International Brotherhood of Teamsters with an equal number of Teamster-appointed and Company trustees.
The Company also proposed increases in pension and health and welfare contributions for other benefit funds covering UPS members. While smaller than the Union's demands, the Company proposal is greater than the amounts contained in the 2002-2008 contract.
The Company proposes to pay in a lump sum the withdrawal liability owed to the Central States pension fund, an amount subject to negotiation between the Company and that Fund. The Company contends that depositing a large amount of money into the Fund will improve its stability and protect the Fund from some of the requirements of the Pension Protection Act of 2006, which will go into effect in 2008. These determinations require complicated economic calculations. The Teamsters Negotiating Committee has retained its own actuaries to examine the figures that have been received from Central States in order to independently determine the impact on the Fund if the Company withdrew.
I can assure you that the Negotiating Committee will not consider any plan that jeopardizes the benefits of members in Central States or members of any other Teamster fund. The Company’s proposal is not a negotiating tactic. It is a serious proposal that must be seriously evaluated and compared with the other options available for improving and protecting the pension benefits of our members.
The Company’s pension proposal is included in a wide range of contract changes which the Company wants to offset the cost of the new plan. These proposals are almost universally unacceptable. Most of them are too farfetched to even discuss at this point because the Negotiating Committee will never bring them back to the members or trade away these contract protections.

 

[browniehound]

Tie, Thanks for posting that information. Sometimes I think with us "rank and file" promblem is we lack all the information regarding the contract and negotiations Sometimes I feel we are "out of the loop" when it comes to the inner workings of how things are really done.

 

[Cementups]

When it comes down to it you should never have to rely on your employer or Union to be there when the time comes. If you plan out your retirement ahead of time on your own, without them, thenyou will havenothing to worry about. There are far better options out there than what UPS or the Teamsters offer.

Personal financial advi sors FTW