Catatonic
Nine Lives
About 50% less than you think it should ... seriously!
UPS Special Pension Buyout Offer - December 2016
- Thread starter JMR07168
- Start date
UPSandy36109
Active Member
I am 46(Friday), half decent at math, and I still can't understand UPS' actuarial formulation.
I am 16 years away from their early retirement. I have 5 years in, was pensioned out for medical disability. To be more clear, I would start receiving checks of 225, plus or minus, at 62.
The odds are in UPS' favor that-being a single-none with no beneficiary-I could kick the bucket before I get my pension in 16 years. I've seen all kind of estimates, including 1 33 year old where, even after all opinions, would receive around 30K, according to the members of this thread.
Let's do the math here: UPS is a publicly traded company, therefore accountable to their shareholders. I remember pre-BK, GM had to make a 1 time lump sum pension payout of 60 Billion, and that plummeted their share price.If 1 poster opines that he should get 100K, and another 60K here....first of all, if there are actuaries better than me, what should I get with the numbers provided?
But, my more telling question, and point: UPS would be on the hook for almost the same amount, at those rates, as GM was. It would not benefit the company, even if it was only a one-time charge, to pay out that kind of cash. UPS should play the numbers and see how many of us die off before our pension kicks in.
I don't see how it would make good business sense for the company to be throwing all these tremendous amounts to those who are so far away from retirement-like myself and the 33 year old on here, for instance.
I'll be the first one to say I won't turn it down, if it's more than 10K. But according to some on here, it would be more than that. Point is, how does it behoove the company to go ahead and 'purge' the pensioners at billions upon billions of cost to them when they have quarterly growth, and shareholders, to answer to?
brownmonster
Man of Great Wisdom
Look for buyout numbers in the 5 to 10k amount and most people will take it. There will be no surprise generosity.
UpstateNYUPSer(Ret)
Well-Known Member
Will there option be available to roll it over to avoid the tax hit?
brownmonster
Man of Great Wisdom
You would think so. Will be interesting to get the final numbers.
Jaco Williams
Active Member
There's rules put in place by the IRS that stops a company from low balling the actual lump sum. They can low ball your pension amount with interest rates & what not but not the lump sum.
But the be honest - I really don't know. This financial
is hard to understand. I was in aircraft maintenance!!! Lol
For me - non union - my pension is based on the average of my last 5yrs salary. Which was around $72k. Per the company's Retirement plan - I'm to get around $1400 per month until I croak.
The IRS says lumps sums are to be calculated to 81yrs old.
The part I don't know is if it's calculated from when I'm 55 or 65. I am eligible for early retirement due to being with UPS for over 10yrs.
Anyhow - $1400 x 312 months (55yrs to 81yrs) = $400k+...
What my pension will be worth -- approximately....
My lump sum will be based some where off of that $400k...
Subtract taxes, fees, interest rates, penalties, bla-blah....
Who gives a? Cut me a check & shut up big brown. You were nothing but a pain in my ass anyways!
This will cut all ties I have with that place...!! Yes!!
But the be honest - I really don't know. This financial
is hard to understand. I was in aircraft maintenance!!! LolFor me - non union - my pension is based on the average of my last 5yrs salary. Which was around $72k. Per the company's Retirement plan - I'm to get around $1400 per month until I croak.
The IRS says lumps sums are to be calculated to 81yrs old.
The part I don't know is if it's calculated from when I'm 55 or 65. I am eligible for early retirement due to being with UPS for over 10yrs.
Anyhow - $1400 x 312 months (55yrs to 81yrs) = $400k+...
What my pension will be worth -- approximately....
My lump sum will be based some where off of that $400k...
Subtract taxes, fees, interest rates, penalties, bla-blah....
Who gives a
? Cut me a check & shut up big brown. You were nothing but a pain in my ass anyways!This will cut all ties I have with that place...!! Yes!!
1989
Well-Known Member
UPS want to wash their hands of this. There is a always an option to roll over qualified accounts. My question would be. Why take a fractional payout today, just to roll it into another account that has similar rules?
There's rules put in place by the IRS that stops a company from low balling the actual lump sum. They can low ball your pension amount with interest rates & what not but not the lump sum.
But the be honest - I really don't know. This financial
For me - non union - my pension is based on the average of my last 5yrs salary. Which was around $72k. Per the company's Retirement plan - I'm to get around $1400 per month until I croak.
The IRS says lumps sums are to be calculated to 81yrs old.
The part I don't know is if it's calculated from when I'm 55 or 65. I am eligible for early retirement due to being with UPS for over 10yrs.
Anyhow - $1400 x 312 months (55yrs to 81yrs) = $400k+...
What my pension will be worth -- approximately....
My lump sum will be based some where off of that $400k...
Subtract taxes, fees, interest rates, penalties, bla-blah....
Who gives a
This will cut all ties I have with that place...!! Yes!!
JMR07168
Member
Exactly. Something easy to access and that you can borrow against if you want.
You'll ALWAYS have the option to cash out!
1989
Well-Known Member
This sounds like a poor mans option.
JMR07168
Member
Im talking investments, mainly real estate.
I received mine last week. I worked for Supply Chain Solutions and vested for 5 years fulltime. I will be taking whatever my lump sum payout is.
Post Trippin
Member
No. Looks like all walks of life are getting this offer
Catatonic
Nine Lives
I am 46(Friday), half decent at math, and I still can't understand UPS' actuarial formulation.
I am 16 years away from their early retirement. I have 5 years in, was pensioned out for medical disability. To be more clear, I would start receiving checks of 225, plus or minus, at 62.
The odds are in UPS' favor that-being a single-none with no beneficiary-I could kick the bucket before I get my pension in 16 years. I've seen all kind of estimates, including 1 33 year old where, even after all opinions, would receive around 30K, according to the members of this thread.
Let's do the math here: UPS is a publicly traded company, therefore accountable to their shareholders. I remember pre-BK, GM had to make a 1 time lump sum pension payout of 60 Billion, and that plummeted their share price.If 1 poster opines that he should get 100K, and another 60K here....first of all, if there are actuaries better than me, what should I get with the numbers provided?
But, my more telling question, and point: UPS would be on the hook for almost the same amount, at those rates, as GM was. It would not benefit the company, even if it was only a one-time charge, to pay out that kind of cash. UPS should play the numbers and see how many of us die off before our pension kicks in.
I don't see how it would make good business sense for the company to be throwing all these tremendous amounts to those who are so far away from retirement-like myself and the 33 year old on here, for instance.
I'll be the first one to say I won't turn it down, if it's more than 10K. But according to some on here, it would be more than that. Point is, how does it behoove the company to go ahead and 'purge' the pensioners at billions upon billions of cost to them when they have quarterly growth, and shareholders, to answer to?
Brownmonster is right ... expect on the low end.
I have been through 2 buyouts and it is definitely low-ball.
The retirement payout will be based on the amount you would get at full retirement age (normally 65).
It will be actuarially calculated on pay out from age 65 - 81 (most likely). I will call this Act Amt.
The payout will be in today's dollars accounting for the time value of money.
For instance a 35 year old with 10 years in will receive not much ... maybe 20% of the Act Amt.
A 60 year old will receive probably 85% of the Act Amt.
A 55 year old 70% (figure 3% per year before full retirement age down to 40% at age 45 at which point it will flatten out but still trend downward as a total percent
Most likely, management and Non-union cannot be rolled over or deposited in a tax-deferred program. That was the case in the 2 previous buyouts.
Union pension ... hopefully it can be deposited into a tax-deferred program but I don't know.
Depending on how the current pension language is structured, it cannot be rolled into a tax-deferred program.
Pension payouts are usually used to get older active employees to early-retire (age 50 or later).
This Special Offer is a bit unusual and is driven by Wall St analysts wanting UPS to get rid of long-term debt obligations.
This will be a good-show effort by UPS with a reasonable actuarial pay-out.
You may not think it reasonable but the numbers do work out.
However, with interest rates being what they are, you will only be able to replace probably 40% with an annuity paying out the same as your pension at age 65.
Note: The above is based on my personal experience with UPS and investigation into pension payouts with AT&T, IBM and a few other Fortune 500 companies.
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Catatonic
Nine Lives
H
The lump sum UPS will offer will most likely be around 40% of that cost of buying an annuity if you are age 65.
In your case, the total annuity would be $163,000.
If you bought that annuity in cash at age 35, the cost would be around $101,000 based on 6% ROI.
UPS will most likely offer you around $40,000.
Go on the internet and find an annuity that will pay $1073.61 per month for life beginning at age 65.
The lump sum UPS will offer will most likely be around 40% of that cost of buying an annuity if you are age 65.
In your case, the total annuity would be $163,000.
If you bought that annuity in cash at age 35, the cost would be around $101,000 based on 6% ROI.
UPS will most likely offer you around $40,000.
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