Posted on 05/08/2016 8:24:07 AM PDT by Rusty0604
UPS, and roughly 270,000 retired truck drivers, construction workers, and other service workers can breathe a collective sigh of relief... for now. As we previously reported, the Central States Pension Fund had submitted a plan to Treasury that if approved would have cut member benefits, and triggered UPS to take an estimated $3.8 billion charge.
As the WSJ reports, Kenneth Feinberg (who was appointed by the Treasury to review all such applications) rejected the plan presented by the CSPF. Feinberg cited a few reasons for his decision, one being that it imposed cuts in a disproportionate manner, another was that the notifications sent to participants were too technical to be understood, but namely Feinberg didn't agree with the assumption that the fund would achieve 7.5% yearly investment returns going forward. Those returns "were too optimistic and unreasonable" Feinberg said.
"You get to breathe again, you get to exhale. Our life was on hold." said Bill Orms, a 69 year-old retired truck driver from Akron, Ohio who would have seen his $2,400 a month benefit cut in half had the proposal been accepted.
Absent an injection of funds or benefit cuts, the fund which pays out $2.8 billion in benefits a year will be insolvent within ten years according to Thomas Nyhan, the plan's executive director. Nyhan added that he was "disappointed" by the Treasury's decision. According to the WSJ, the fund currently has $16.8 billion in assets against $35 billion in liabilities, and has roughly one active worker contributing to the fund for every four retirees that draw from it.
So we're now back to where we started. The Central States Pension Fund will by its own estimates be insolvent within ten years, and the government safety net, the Pension Benefit Guaranty Corp cannot be counted on to pick up the benefits because it too is well on its way to insolvency.
If the Treasury won't allow any pension cuts, and the government created safety net won't be there to keep the benefits flowing, how will the cash continue to flow to members? With the precedent now set by the Treasury that no cuts will be allowed, the answer will likely come in the form of a massive bailout.
If you're breathing and not arranging your life to live on less than $1200 a month from this pension and whatever other funds you're receiving, it will be even worse when the real chopping happens. It was rejected because they'll just have to cut it again in a couple years. Every check you receive higher than $1200 should go straight into your savings as a cushion for the real cuts.
Assuming ongoing Democrat control of the fedgov, I’d think any pension system consisting primarily of union workers is as solid as the US government.
Now you can debate how solid the US government is fiscally, but they’ll get at least that level of backing.
Just like the state budgets of places like California, Illinois, and New York eventually get US Treasury backed state bonds.
Next up is 401Ks, IRAs, and other accounts. I am not joking.
Exactly. But if you’re non-union, watch out. Look what they did at GM.
I put 10% of my pay away for retirement, but social security and my pension plan combine for another 10%. A means testing of social security or the subsequent collapse of the system will really tick me off. I could probably live off my 401k and military pension alone, but it wouldn’t be as fun.
I think that a $50k limit on all government pensions is more than enough. Raise the age to 60.
SS is back door means tested.
https://www.ced.org/blog/entry/why-arent-social-security-and-medicare-means-tested
I know about that. I mean straight up not giving benefits to those with an income over $70k, or some other number.
I did similar for my last 8 years of active duty. Then, put 10% in my TSP as a civilian with 5% matching.
My wife and I are both retired now and are comfortable with her retirement from the State of MS, my military retirement, small DOD Civilian retirement and both our social security payments.
We could have planned more aggressively but it seems we are still in the minority for having done as well as we have.
Good luck and God Bless for your service.
You picked a good state to retire into.
Did my last 12 years active duty here and wife loves being on the coast and away from the colder climes. I wanted to move a bit north, but she asked me to reconsider. No regrets - got to spend an extra 15 years working with military as a civilian - add that to my 24 years in uniform and I have 39 years - you seem to be closing in on that.
The positive response would be overwhelming and then the House and Senate would be on notice.
Talk about a grab the popcorn moment...
My intended term of service was 4 years but I enjoyed jump status and the guys I served with, that led to a career. As an aside, I’ve never met anyone who finished up 20+ and regretted the time served. It’s good to do while you’re young.
Same here for the most part. I enlisted to try a change of venue before I got in real trouble due to all the rebelliousness/wildness I was prone to and found a home that I could relate to. Some very interesting assignments in the security world and the folks I worked with sealed the deal. It treated me better than I deserved at first and i tried to repay that debt by being the best Airman/NCO I could and mentored some folks that started out similarly but who had some obvious potential.
I ended up with some bosses I would crawl through a hundred yards of broken glass for and some that i wouldn't pee on if they were on fire - the good ones made up for all the bad ones. I ended up with troops that would take the crawl for me and was humbled as they made it clear that they honored me with their loyalty.
My last stint was running a SCIF that developed training for NSA and other acronym intelligence agencies and I had Army, Navy, Air Force, and a civilian working for me and they got together and made my retirement a mixture of the 3 services - I get misty eyed when I remember it - don't let them know that ;-)
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