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Did I just discover that I will not get or accrue a pension at Frito Lay?

RamBigHorn

RamBigHorn

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I was on the mypepsico website and was reading the various retirement plans and the the pension information says no further plan participants after Jan 2011. If I understand, any retirement monies paid from that point forward will be in the form of 401K matches. Am I losing my mind? A multi-billion dollar, Fortune 60 multinational conglomerate can't afford(or doesn't want to) to pay a traditional pension? I do believe I may have made a mistake in coming here to work. Someone talk me back from the edge!
 
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That was helpful! I should've thought of that! Pretty sure I did cover that in my interview. I had a feeling this was going to be a thread I'd regret starting.
 
I can't speak for PepsiCo/Frito Lay, but it seems to be the way a lot of places are going. About this time last year Sysco froze pensions nationwide except for the opco's that are union. Cheaper for them to administer, and they won't have to worry about funding shortfalls in the future cause the burden's on us.

My conspiracy hat on: Encouraging the masses to put money in the market by freezing pensions will cause it to rise just based on the volume of dollars there. Then the big shots with some real skin in the game make a TON of money on their investments and don't have to worry about shoring up our retirement.
 
I guess the shareholders deserve more of a return on their investment, so the people who spent their lives producing those returns can just go to hell. We're all supposed to take it and like it and cheer for our flag while we're at it. Oh, and let's not forget our bootstraps!
 
RamBigHorn said:
I was on the mypepsico website and was reading the various retirement plans and the the pension information says no further plan participants after Jan 2011. If I understand, any retirement monies paid from that point forward will be in the form of 401K matches. Am I losing my mind? A multi-billion dollar, Fortune 60 multinational conglomerate can't afford(or doesn't want to) to pay a traditional pension? I do believe I may have made a mistake in coming here to work. Someone talk me back from the edge!
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As a former Frito driver and 25+year Teamster, I will try to talk you back from the edge. While a traditional defined benefit pension is "generally" more secure, it is not always better and they are increasingly disappearing. I am assuming that Frito will do a match and if you earn the typical pay $80,000-$100,000 a year, you should be able to eventually max out your 401k which is currently $17,500 a year. If you are investing in 3-4 different mutual funds you can expect to earn between 8-12 percent on average. Some years will be more and some will be less, but the stock market has averaged over 10 percent for the last 100 years. When you retire the entire pot of money is yours and when you die, your family gets the money. With a pension you generally only have the monthly payout. Try listening to Dave Ramsey on the radio and he will help ease your mind on subjects like this. Some people will dis-agree with my statement, but investing in mutual funds when looked at for LONG TERM results, is very consistent with 10-12 percent or better returns. I would be a hypocrite if I didn't tell you that I will get a Teamster pension in a few years, but at $3,000 a month it will be much smaller than what my 401k will pay me. This is only my opinion and it may be worth what you paid for it, which is nothing!!! Frito Lay is still a great job, compared to most trucking jobs. I hope I succeeded in bringing you back from the edge. Lol.
 
Yeah, thank you for the reply. I have contacted my HR rep and she explained that I'm in the ARC retirement plan. It works similar to 401k but doesn't require my contribution. Frito pays a percentage of my annual earnings and over time the percentage increases. When I choose to contribute, they also will match a percentage of that as well. So all in all, I think I can make a good nest egg from Frito to add to my Teamster pension and it will work out fine. My Teamster plan is two-fold, both a defined benefit and a cash balance.

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I know we can't cash out of the pension .. but both 401 and pension should be what we get or am I wrong ?


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2. Automatic Retirement Contribution (ARC)

PepsiCo provides you with an Automatic Retirement Contribution, or ARC. The amount you

receive is based on your age plus years of service. Contributions range from 2% of pay for age

and service less than 35, to 9% of pay for age and service 65 or greater. This benefit is completely

funded by PepsiCo and is automatically deposited into your 401(k) account – you do not need to

contribute to the 401(k) to be eligible. You will need to make a separate investment election for

ARC. You will vest in the ARC after three years of service with the Company.



This is the retirement plan which is different than the 401K Plan.
 
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