Originally Posted by
kronan
Thanks for the Fix pinseeker
Newoldguy,
the Money is NEVER in our hands, until the Pension checks are cut.
Whether it's our current A plan or the VB plan. The Company is the sponsor and the $$ just isn't in our hands until after retirement. The Only retirement money that's in our hands is the B plan.
The VB plan is a Pension plan. Covered by ERISA and PBGC.
In the event of a long, or dramatic market down turn, FedEx is still obligated to meet Pension obligations. Barring bankruptcy, and even in Bankruptcy it Still takes Govt agreement to terminate a Pension plan.
I understand that but what you fail to understand is that with the new program the VB plan becomes the bank account for “guaranteeing” the floor. Currently FEdex is the guarantor. In other words if Fedex doesn’t get the returns on the investment it hopes for, they have to make it whole to guarantee the current A plan payouts. Under the new program if the VB doesn’t get the returns on investments it needs to pay the floor Fedex doesn’t put more money in, the Money comes from within the VB plan to pay the floor guarantee. That’s what makes it a pyramid scheme. That’s what is attractive to Fedex is it becomes a fixed cost for them. That’s just one of the things that should be a red flag for us. Because if the market downturns, say for 5 years and doesn’t return enough to pay those guarantees, it comes from the fund capital. Which in turn lowers the re-investment capital (in an already down turned market) which reduces compounding gains putting the growth and guarantees at risk at some future point even though Fedex and the PBGC remain compliant. But you can’t get money from a fund which has exhausted itself. I believe (and this is only one of the many faults with this plan) you fail to see the Forrest for the trees in this case.
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