UPS Special Pension Buyout Offer - December 2016

[ColtLester45]

I'm just wondering if everyone that is looking at the value of their lump sum is taking into account the fact that they are offering this much earlier than if you wait until retirement age. That generally means that UPS is going to reduce the amount offered to "do us a favor" and give us the money now. I could totally see them offering everyone about $5,000 to buyout a pension that has a NPV of $50,000 at age 65. If I remember correctly, that is the philosophy UPS usually took when it comes to payment.

 

[UpstateNYUPSer(Ret)]

If this is good for the company then chances are it's not good for the employee.

Yes and no.

 

[UpstateNYUPSer(Ret)]

I'm just wondering if everyone that is looking at the value of their lump sum is taking into account the fact that they are offering this much earlier than if you wait until retirement age. That generally means that UPS is going to reduce the amount offered to "do us a favor" and give us the money now. I could totally see them offering everyone about $5,000 to buyout a pension that has a NPV of $50,000 at age 65. If I remember correctly, that is the philosophy UPS usually took when it comes to payment.

95% reduction is far too drastic.

I would guess they would cut 30 to as much as 40%.

 

[1989]

In the case of real estate, you would most likely have to pay tax and penalties if there are any, on the lump sum, which could be significant.

If you take the lump sum and roll it into an IRA or 401k, then you would not have to pay any tax or penalties, but you would be free to make investment choices within your IRA or 401k.

In either case it's a gamble, you may or may not out-perform what it would have done if you left it alone.

You can put real estate in an IRA. Wish I knew 25 years ago what a piece of crap the UPS 401K is.

 

[doug]

Currently drawing $2,000 a month for the rest of my life, I am 50. If I live until age 85 and hopefully more at $2,000 a month that equals $840,000.00 by age 85 . We have a great pension I would advise to look at the offer very carefully. And seek advise from a financial planer and tax adviser.

 

[UpstateNYUPSer(Ret)]

Currently drawing $2,000 a month for the rest of my life, I am 50. If I live until age 85 and hopefully more at $2,000 a month that equals $840,000.00 by age 85 . We have a great pension I would advise to look at the offer very carefully.

$2K/month is not a great pension.

 

[doug]

$2K/month is not a great pension.

At age 50 its not bad at all. We planned for retiring at this age and with other things we have going on we are enjoying life outside of the Brown machine. Planning is how its done and with a buyout planning better be looked at very carefully.

 

[Ms.PacMan]

I am receiving 766 per month. Gone into another profession. If I am offered a considerable amount I will take it and pay my mortgage off. No doubt about it. Might have to pay some taxes but the mortgage will be gone.

Currently drawing $2,000 a month for the rest of my life, I am 50. If I live until age 85 and hopefully more at $2,000 a month that equals $840,000.00 by age 85 . We have a great pension I would advise to look at the offer very carefully. And seek advise from a financial planer and tax adviser.

Have either of you received a postcard?

IIRC the IRS made (or maybe will make) pension buy out offers illegal to people already collecting their pensions.

 

[Ms.PacMan]

You can put real estate in an IRA. Wish I knew 25 years ago what a piece of crap the UPS 401K is.

Our 401k is great. Index funds + ultra low fees.

 

[Ms.PacMan]

$2K/month is not a great pension.

The $5500/mo fantasy pension that includes wage contributions, a 30% haircut and an uncertain future is better?

 

[doug]

Yes I received the post card yesterday.

 

[PiedmontSteward]

I received the same UPS Special Pension Payment Offer Card a few days ago.
I worked for UPS a total of 16 years part time. I became disabled in 2006 so I had to resigned. I'm eligible for my pension at age 55. Still have 5 years to go. Does anyone know what the offer will be or how it will be calculated?

According to the SPD, you're eligible for 70% of your PT pension if you become permanently disabled. That would likely be better for you than the lump sum offer.

You may have difficulties with the "timely application" to the plan administrator, but its worth a shot if you weren't already aware.

From the SPD:

If You Become Disabled

If you have at least 10 years of Vesting Credit and become permanently and totally disabled while actively engaged in Covered Employment, you may be eligible to receive a disability benefit from the Plan. You are considered totally and permanently disabled if you qualify for disability benefits under the Social Security Act. The amount of your disability benefit is: 1) Your Accrued Benefit in the Plan, based on your years of Service Credit completed before you became disabled (up to 20 years) times 2) 70%. Your disability benefit will begin as of the first day of the latest of the:
• Seventh month after your last day of active employment due to your disability
• Month after you apply for a disability benefit from the Plan or
• Month after you file with the Social Security Administration for disability benefits under Social Security.

Your disability benefit will be paid as a Single Life Only Annuity (whether you are single or married) until your Normal Retirement Date (or the date you elect to have your Early Retirement Benefit or Service Benefit begin), your disability ends or you die. You must make a timely application to the Plan Administrator to receive a disability benefit. When you reach your Early Retirement Date or if you are eligible for a Service Benefit, you can apply to begin receiving your retirement benefit, if desired. Unless you elect an Early Retirement Benefit or a Service Benefit, your retirement benefit will begin at your Normal Retirement Date. Your retirement benefit will be paid in the normal form or an optional form.

 

[PiedmontSteward]

This "offer" is only being sent to folks that have separated from the company (voluntarily or otherwise) that were vested in the PT pension plan. There are likely ten of thousands of former PT'ers with "some" vested credit (worked at least five years and quit) in the plan that are in the "liability" column even if they're only owed a $500 or so a month payment upon retirement.

Something to keep in mind is the "fiduciary duty" of the trustees of the plan. They're only going to cut a check for a lump sum if its in the best financial interest of the plan -- not necessarily the individual participant. I did the math with a member who voluntarily separated from the company recently; he would be owed approximately $900/month after age 65. Assuming he lives AT LEAST 20 years post-retirement (likely more as this would be in the 2050's/2060's and life expectancy has typically been rising but just trying to ballpark it) that's roughly $216,000 (granted, that'll be in 2050's dollars and cost of living/inflation go hand in hand with life expectancy.)

There's no way in hell the plan is going to cut a check for $216k, but it'd be interesting to see what formula they use for this "one-time offer." Admittedly, I'm a little suspicious as "one-time offers" are phrased that way in order to generate a sense of urgency so more member chomp at the bit. I'm also a little irritated that the "union trustees" of the plan haven't been able to filter any information down to the UPS BA's and stewards as the numbers are already set (they wouldn't send out the postcards if the actuaries hadn't already ran the numbers) as I have quite a few former employees that I'm in touch with that want as much time as possible to figure out their options.

 

[1989]

Our 401k is great. Index funds + ultra low fees.

I wish it was great, but I'm stuck with this POS until separation.

 

[eladio]

This "offer" is only being sent to folks that have separated from the company (voluntarily or otherwise) that were vested in the PT pension plan. There are likely ten of thousands of former PT'ers with "some" vested credit (worked at least five years and quit) in the plan that are in the "liability" column even if they're only owed a $500 or so a month payment upon retirement.

Something to keep in mind is the "fiduciary duty" of the trustees of the plan. They're only going to cut a check for a lump sum if its in the best financial interest of the plan -- not necessarily the individual participant. I did the math with a member who

This "offer" is only being sent to folks that have separated from the company (voluntarily or otherwise) that were vested in the PT pension plan. There are likely ten of thousands of former PT'ers with "some" vested credit (worked at least five years and quit) in the plan that are in the "liability" column even if they're only owed a $500 or so a month payment upon retirement.

Something to keep in mind is the "fiduciary duty" of the trustees of the plan. They're only going to cut a check for a lump sum if its in the best financial interest of the plan -- not necessarily the individual participant. I did the math with a member who voluntarily separated from the company recently; he would be owed approximately $900/month after age 65. Assuming he lives AT LEAST 20 years post-retirement (likely more as this would be in the 2050's/2060's and life expectancy has typically been rising but just trying to ballpark it) that's roughly $216,000 (granted, that'll be in 2050's dollars and cost of living/inflation go hand in hand with life expectancy.)

There's no way in hell the plan is going to cut a check for $216k, but it'd be interesting to see what formula they use for this "one-time offer." Admittedly, I'm a little suspicious as "one-time offers" are phrased that way in order to generate a sense of urgency so more member chomp at the bit. I'm also a little irritated that the "union trustees" of the plan haven't been able to filter any information down to the UPS BA's and stewards as the numbers are already set (they wouldn't send out the postcards if the actuaries hadn't already ran the numbers) as I have quite a few former employees that I'm in touch with that want as much time as possible to figure out their options.

voluntarily separated from the company recently; he would be owed approximately $900/month after age 65. Assuming he lives AT LEAST 20 years post-retirement (likely more as this would be in the 2050's/2060's and life expectancy has typically been rising but just trying to ballpark it) that's roughly $216,000 (granted, that'll be in 2050's dollars and cost of living/inflation go hand in hand with life expectancy.)

There's no way in hell the plan is going to cut a check for $216k, but it'd be interesting to see what formula they use for this "one-time offer." Admittedly, I'm a little suspicious as "one-time offers" are phrased that way in order to generate a sense of urgency so more member chomp at the bit. I'm also a little irritated that the "union trustees" of the plan haven't been able to filter any information down to the UPS BA's and stewards as the numbers are already set (they wouldn't send out the postcards if the actuaries hadn't already ran the numbers) as I have quite a few former employees that I'm in touch with that want as much time as possible to figure out their options.

Just rec'd my postcard and after speaking with someone in the know, found out that the offer packets will be going out the end of next week...Don't be surprised by the generous amounts offered. I will be rolling over 2/3 and paying my 20% Federal w/h tax on the balance in cash payout.

 

[UpstateNYUPSer(Ret)]

I wish it was great, but I'm stuck with this POS until separation.

What changes, additions or deletions would you like to see made?

 

[1989]

What changes, additions or deletions would you like to see made?

Physical assets. Real Estate, coins, etc. The 401k should not have any fees. Am not a fan of derivatives any longer. Would like to see all my monies decoupled from SEC control. The SEC is a POS.

 

[IVE GOTTA PACKAGE 4U]

This "offer" is only being sent to folks that have separated from the company (voluntarily or otherwise) that were vested in the PT pension plan. There are likely ten of thousands of former PT'ers with "some" vested credit (worked at least five years and quit) in the plan that are in the "liability" column even if they're only owed a $500 or so a month payment upon retirement.

Something to keep in mind is the "fiduciary duty" of the trustees of the plan. They're only going to cut a check for a lump sum if its in the best financial interest of the plan -- not necessarily the individual participant. I did the math with a member who voluntarily separated from the company recently; he would be owed approximately $900/month after age 65. Assuming he lives AT LEAST 20 years post-retirement (likely more as this would be in the 2050's/2060's and life expectancy has typically been rising but just trying to ballpark it) that's roughly $216,000 (granted, that'll be in 2050's dollars and cost of living/inflation go hand in hand with life expectancy.)

There's no way in hell the plan is going to cut a check for $216k, but it'd be interesting to see what formula they use for this "one-time offer." Admittedly, I'm a little suspicious as "one-time offers" are phrased that way in order to generate a sense of urgency so more member chomp at the bit. I'm also a little irritated that the "union trustees" of the plan haven't been able to filter any information down to the UPS BA's and stewards as the numbers are already set (they wouldn't send out the postcards if the actuaries hadn't already ran the numbers) as I have quite a few former employees that I'm in touch with that want as much time as possible to figure out their options.

With interest rates being so low, they will get a much better lump sum payment.

 

[UpstateNYUPSer(Ret)]

Physical assets. Real Estate, coins, etc. The 401k should not have any fees. Am not a fan of derivatives any longer. Would like to see all my monies decoupled from SEC control. The SEC is a POS.

Fees are paid by the company.

I thought REIT's involved real estate-----I have never looked in to them as I have no interest in investing in them.

 

[1989]

Fees are paid by the company.

I thought REIT's involved real estate-----I have never looked in to them as I have no interest in investing in them.

Haven't looked at my statement in a while, but I believe there are fees for all categories. S and P, horizon funds, etc. reits are derivatives or real estate. I want physical assets.