Originally Posted by
Tuck
I followed up today and talked to the folks at R&I. The post-Medicare VEBA I guess is okay but I don't really see how it's that necessary. Right now at age 65 your Medicare payments are about $115/person/month. A very nice supplement package that will provide you with better care than our active pilot buy-up plan will cost you about $115/month/person in addition to that Medicare charge. This is what the VEBA is used for. So for summary, prior to VEBA your annual cost for post-Medicare coverage and supplement for you and your spouse was about $6000/yr. After VEBA it's about $3000/yr - both seem insanely cheap to me. So for young guys that have at least 20 years of working until they retire, they'll be contributing about $10,000 into this VEBA account and will get out of it about $3000/yr as long as they live (or their spouse lives). Doesn't really sound that great to me.
Tuck,
I guess I don't quite understand your above (underlined and bolded statement. As well, your comment, which I highlighted in red, also doesn't seem to ring true.
Are you saying that over the course of a 20 year FedEx career, a guy will contribute about $10,000 into the VEBA fund, and then when he retires, he'll only get about $3000 worth of benefit from it, for each year he lives after retirement? And you're saying (your statement in red) that that really makes little sense? If that's what you're saying, I tend to disagree, because $3k a year in benefit, far outweighs what you could make if you had bought an annuity for that same $10,000. I'd expect that you'd see less than $1K per year on the $10K.
Veba seems to be a good deal, if you live long enough to actually use it. As well, I don't ever remember it being created as an incentive to get older guys to retire earlier. But then again, as I get older, I find myself suffering from that dreaded disease, CRS (can't remember sh!t.)
JJ