I'm a 44yo Single Guy that worked 8years part time and 6 Years Full Time...My monthly pension is supposed to be like $815per month...Im praying that I can clear $125K after taxes...I can pay off my mortgages and Bills..Im Young enough that I can start saving $1K Per month..Especially after not having any bills...i wonder how many years will they try to pau us for
UPS Special Pension Buyout Offer - December 2016
- Thread starter JMR07168
- Start date
Catatonic
Nine Lives
It would be highly unusual if UPS did NOT use a 3rd party.
Catatonic
Nine Lives
I bet you did a great job!
Catatonic
Nine Lives
Same for me!
I get close to 7k a month and never even paid any Union dues ... RTW.
How much you get?
UpstateNYUPSer(Ret)
Well-Known Member
Sorry to burst your bubble but it turns out the offer is only for your part time pension.
UPSandy36109
Active Member
N
Not even close to you. LOL.
Billy Ray
God, help us all.....
12.5 years PT, interested in the offer
I have already decided my (will consider) amount
Billy Ray
God, help us all.....
UPSandy36109
Active Member
That reply made absolutely no sense whatsoever
JMR07168
Member
Yes lol. It is. Thanks
He was referring to the wood in the photo of my original post.
So happy I'm gone
New Member
Is it true that this offer is only for part time years?
Jaco Williams
Active Member
I never worked part time...
I was full time non union on the airline side since day 1. Worked in aircraft maintenance for the big brown titty for 16yrs...
I got the offer 2 weeks ago..
I was full time non union on the airline side since day 1. Worked in aircraft maintenance for the big brown titty for 16yrs...
I got the offer 2 weeks ago..
Bagels
Family Leave Fridays!!!
I hate to be the party pooper but...
I'll make this simple. UPS is making this offer because beginning January 1, the IRS is adapting longer average life expectancy (which increases the per-person pension liability) and providing limited governance on discount (interest) rates being used in pension buyout calculations.
The latter is of extreme importance here: basically, UPS is offering the present value of your future annuity payments. There's two major factors here: time and discount (interest) rate. Consider the time factor -- two employees left UPS after about 15 years, accruing a $900/month benefit. One employee is only 33, the other is 64 -- even though on paper both employees have the same liability, because one has only 1 year to wait to collect whereas the other has 32 years, the older employee will receive a much larger offer, because $900/month will have more purchasing power next year than it will 32 years from now.
The discount (interest) rate is more critical. Right now, that interest rate is largely up to the employer. Most large companies offering buyouts are using discount rates in the high 7s - 10%, which makes the buyout a really, really bad idea. In other words, whatever amount offered to you today would need to earn 7%-10% annually to equate the amount you would've otherwise earned in the payouts. That's likely not going to happen. (The discount rates also means that most of you are dreaming given the amounts you've listed).
Reality is, UPS's offer will not be favorable. If you received this offer, you're in a pension whose full value is guaranteed by the government. Taking the buyout is a really bad idea unless you or your family has a history of health problems and you think you'll perish long before the IRS assumes you will (83 for men, IIRC). Buyouts are such a bad idea that the government will soon begin somewhat policing them, which is why you received this offer when you did to begin with.
That said, many of you will be tempted by the lump sum amounts and will take the offer, anyway. If you do, note that if the amount is directly rolled over into a retirement account, you will not be impacted by taxes. If the amount is directly paid to you, 20% will be withheld for taxes. If you deposit the entire amount (including the taxes that were withheld -- you need to come up with extra cash in other words) into a retirement account within 60 days, you will not be subject to any taxes. Withholdings are simply deposits toward your tax liability, which isn't calculated until you actually file your taxes. If you don't deposit the money into a retirement account, it'll be subject to a 10% penalty + taxes (which may be more or less what was withheld, depending on your liability).
BTW, according to my recent plan notice, there are 197,313 participants at 12/31/15, of which 9,883 were collecting benefits, 39,219 had vested but left the company and 148,211 were still employed. So if you received this notice, you're one of the 39,219
.
I'll make this simple. UPS is making this offer because beginning January 1, the IRS is adapting longer average life expectancy (which increases the per-person pension liability) and providing limited governance on discount (interest) rates being used in pension buyout calculations.
The latter is of extreme importance here: basically, UPS is offering the present value of your future annuity payments. There's two major factors here: time and discount (interest) rate. Consider the time factor -- two employees left UPS after about 15 years, accruing a $900/month benefit. One employee is only 33, the other is 64 -- even though on paper both employees have the same liability, because one has only 1 year to wait to collect whereas the other has 32 years, the older employee will receive a much larger offer, because $900/month will have more purchasing power next year than it will 32 years from now.
The discount (interest) rate is more critical. Right now, that interest rate is largely up to the employer. Most large companies offering buyouts are using discount rates in the high 7s - 10%, which makes the buyout a really, really bad idea. In other words, whatever amount offered to you today would need to earn 7%-10% annually to equate the amount you would've otherwise earned in the payouts. That's likely not going to happen. (The discount rates also means that most of you are dreaming given the amounts you've listed).
Reality is, UPS's offer will not be favorable. If you received this offer, you're in a pension whose full value is guaranteed by the government. Taking the buyout is a really bad idea unless you or your family has a history of health problems and you think you'll perish long before the IRS assumes you will (83 for men, IIRC). Buyouts are such a bad idea that the government will soon begin somewhat policing them, which is why you received this offer when you did to begin with.
That said, many of you will be tempted by the lump sum amounts and will take the offer, anyway. If you do, note that if the amount is directly rolled over into a retirement account, you will not be impacted by taxes. If the amount is directly paid to you, 20% will be withheld for taxes. If you deposit the entire amount (including the taxes that were withheld -- you need to come up with extra cash in other words) into a retirement account within 60 days, you will not be subject to any taxes. Withholdings are simply deposits toward your tax liability, which isn't calculated until you actually file your taxes. If you don't deposit the money into a retirement account, it'll be subject to a 10% penalty + taxes (which may be more or less what was withheld, depending on your liability).
BTW, according to my recent plan notice, there are 197,313 participants at 12/31/15, of which 9,883 were collecting benefits, 39,219 had vested but left the company and 148,211 were still employed. So if you received this notice, you're one of the 39,219
.Post Trippin
Member
Im ready to laugh at the offers already...this is gonna be great
retiredTxfeeder
cap'n crunch
Todd Oatman
Member
When I called the 800 number provided here I was told it's only for PT years I have a mix 7.5 pt and 19 FT ...As for Bagels comment they can't just decide to offer buyout at 7-!0% by law they have to go by todays rates which is 3-4%making the buyout larger and to the employees advantage....I know it's tough but packets were mailed Friday we should have them by no later than wed Oct 5th
Todd Oatman
Member
Yes that's what I was told Friday when I called The 800#
UpstateNYUPSer(Ret)
Well-Known Member
Are you curious as to whether you'll be dining al fresco or el drive thru?
Bagels
Family Leave Fridays!!!
You're wrong.
First off, the offer applies to a pair of company-sponsored plans, of which most participants are PTers and management. Most FTers are covered by Teamster-sponsored (and joint Teamster/company-sponsored) plans, but some may be covered by these two plans (I really don't know). And there's also a plethora of FTers like yourself with significant credit from their PT years in these company-sponsored plans.
Secondly, the law enables companies to tie the discount to an arbitrary corporate bonds discount rate. Here's an article from the WSJ discussion the near-8% discount rates calculated in pension buyout offers:
Tax Policies Spur Companies to Offer Pension Buyouts
Bottom line: unless you're in poor health, or have a family history of poor health, the pension buyout will not be a good deal. A conservative portfolio will not come close to achieving a return equal to the discount rate and there's a 50% chance you'll live past 83 (a number that keeps increasing).
Like I said, I recognize that most people will take the offer (and many will blow it within months rather than saving it toward retirement). That doesn't make it a good deal.
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