Originally Posted by
kronan
The problem lies in Guarantee\per year.
As I understand the premise of a VB, There IS a built in Guarantee, and what that Guarantee Level is would depend upon what We negotiate. What level of Investment Risk We collectively decide we could tolerate. Minimal Risk could likely equate to a Guarantee near or At the 130k, but that would mean minimal Reward above the 130k level as well.
And Anyone with even a resemblance of fiduciary duty will pretty much never use the word Guarantee anywhere near any Investment...and I would recommend Running, not Walking, from any Advisor that Does Guarantee a return.
I can Guarantee that Stocks historically return better than Bonds and better than Cash, but there have been periods of time where the Reverse is true as well.
But I know where I want to place my Chips
The point being stressed was that if you don't have your high 5 and 25 years of service yet, and your current benefit is say, $100K per year. IF left alone you could get your high 5 and 25 and have a benefit of $130K and it WOULD be guaranteed (short of bankruptcy or being negotiated away (imagine that!)). Question was could they guarantee that you would be able to make at least $130K guaranteed in the new system of combining your current frozen $100K and the new variable benefit amount (which would be subject to market forces).
The answer was clearly NO, but it was painful to watch KB struggle with his inability to admit this and instead tell us how it almost, nearly 99%, all but guaranteed, the market always goes up, dogs would have to sleep with cats, end of the world type stuff only could prevent you from getting $130K.
Yet they claim they are not selling this plan. His claim is that our risk of losing the current A plan due to FedEx going bankrupt is orders of magnitude greater than the risk of the market ever declining. BUT, in the unlikely event it ever did, especially just before you were forced to retire at age 65, you could always defer your retirement a few years while the market recovered and then start your benefits. So we would have that going for us, which is good.
