Quote:
Originally Posted by Hacker15e
The way it has been explained more than once is that it is a variable benefit with a defined floor which it will never be less than (and which is roughly equal to the current A-plan value).
It varies in how high above that floor it will go in any given year.
I have to respond to this. There is NO floor, unless you have already made your high 5 and 25 yos. Then you have earned the max of the current plan and it is frozen so it can't ever go less. ANYTHING you acquire under the new plan will be a benefit increase.
For the rest of us, who will never be able to reach the high 5 or 25 yos, there is no floor, except for the current benefit we have accrued and will be frozen.
The variable plan does NOT have a floor. Yes, they envision the plan using mythical excess returns to create a superfund (think SS lockbox maybe) that will be used to offset years when returns aren't so good to maintain a certain level of benefit. A kind of hydraulic accumulator as KB likes to describe it at the meetings. Yet, when asked point blank if there is a guaranteed minimum benefit, he has to answer NO. Because there isn't one, and nobody can guarantee that the market will never go down.
He hemmed and hawed and almost screwed himself into the ground trying to explain away that fact and how awful the world would have to be in order for that to happen, you know dogs sleeping with cats, end of the world scenario for that to even maybe ever ever possibly maybe could but probably never would happen.
And remember, IF it did (the market were to decline), you could always defer your retirement until the market rebounded.
On the other hand, he acts like the company going out of business is so likely that we are fools to even consider the option of keeping our A plan as is with the company shouldering all the risk.
Someone asked him how many times the market has declined since 1973 compared to the number of times FedEx has gone bankrupt and he had no answer for that.
This is folly to consider giving up our current A plan benefit. Shame on these guys for trying to sell this plan as an improvement for all of us, its a pipe dream of the super senior guys trying to grab some more cash on their way out the door at the expense of those who haven't and can't get 25 yos and their high 5.