Regarding the differing (lower) contribution rates to to the IAMNPF, they may also be receiving contributions to a Local pension fund. Apparently that's the case where I am.
I wondered why certain areas had such a low contribution rate. This may explain it. Two separate pensions?
And that's why multiplying is inaccurate as opposed to adding. Len would receive $6428.70 if we took 30 X $214.29.
You took Len's highest contribution rate in your example. I agreed that someone with 30 years in may not get the current benefit multiplied by 30 because most previous years were most likely a little lower. And I know that each years benefit amount needs to be added, but we don't know the exact amount of the previous years.
But when the mechanics get their yearly statements, it calculated those previous years contribution rates, and estimates the future years rates.
Back to Len. As I stated earlier, someone with say, 15 years in, multiplying the current rate by 30 is a close estimate of what the 30 year pension should be, if the yearly increases are pretty consistent, which they have historically been.
At 15 years, halfway into his career, Len's contribution rate was $142.43. I would estimate his 30 year pension to be 30 time $142.43, or $4273/mo. A darn pretty close estimate to his actual pension of $4452/mo.
This will work every time if the contributions rates are uniformly increased every year, or every 3 years, as in Len's case.
The best predictor of future behavior is past behavior as long as past behavior has been pretty consistent.
And in Len's case it is close. However, it is inaccurate to state the future projected amount as something that is occuring now.
Not necessarily. If we feel that we can predict the future contribution amount, we know exactly what his pension will be. I agree things could take a downturn, the sun may not rise tomorrow, all that doom and gloom. But looking at the historical performance of the IAMNPF, they can predict, not guarantee, future benefits based on predicted future contribution rates.
Mechanics who already have 30 years in and retire this year will (not may) be (more than a little) less due to lower rates of the past.
Not necessarily. The previous rates may have actually been higher, and the contribution rates may have been decreasing every year.
I know, this is most likely not the case, but we are not 100% sure. So I said "may" be lower or most likely.
Realistic to a point. That may be a true statement, and if the benefit rates continue to increase, in less than thirty years. Otherwise it may happen thirty years from now, if the plan survives future events.
In any case, it's not happening now.
The best predictor of future behavior is past behavior as long as past behavior has been pretty consistent. But nobody is 100% sure, we are only estimating or guessing.
And I never said it was happening now. I believe, in another post, I was asked what the current retirees are getting. My response was "Dunno."
The point is, current mechanics in parts of the country with 15 to 20 years in, based on historical contribution rates and moderate yearly increases, as estimated from past increases, can expect an estimated $9000/mo pension after 30 years, a $12000/mo pension if they stick around for 40 years..........that is, of course, contingent upon the sun rising tomorrow.
