Rumor Has It

[nothumbleenough]

Yes you are all correct. ABF did offer to buy out of the pension plans. They did not want to offer a defined plan. They were willing to offer a 410k type of plan. We must keep in mind that this attempt to buy out was for the benefit of ABF not us.

Our capitalistic economy requires companies to always act in their best interests. Many times companies will confuse the two and opt for short-term benefits rather than long term. Yet, ABF making more money only benefits its employees considering they are the ones making the contributions to our retirement and not to mention paying our paycheck. A defined pension plan is simply a promise to pay a benefit in the future. The money will be put into the market in areas like stocks, bonds and treasuries and then they will subtract out the expenses to run such a fund. A401k is also in the market, but allows the individual to select what he or she thinks is the best instrument for investment. Almost all mutual fund companies would charge fees less than what the pension is charged as a percentage. Vanguard and Fidelity are very resonable with their pricing and have a great record of investment success.

As for TJ negotiating the buyout. I don't trust him either. But this negotiation is about perfecting a legal transaction that would involve tax attorneys, not truck drivers. He cannot make a special deal for his local (which is what my sources said he got in hot water over) at the detriment to all other locals.

[TurnCoat]

Yes you are all correct. ABF did offer to buy out of the pension plans. They did not want to offer a defined plan. They were willing to offer a 410k type of plan. We must keep in mind that this attempt to buy out was for the benefit of ABF not us.

I would love to see MY PENSION rolled into a 401K that I CONTROLLED the investments it was placed in, then a matching contribution by the employer as ABF showed a profit. It would give me more of a sense of ownership in my retirement as well as the prosperity of my employer. It would also give me another vehicle to invest my money rather than send it to Washington in the form of TAXES! I saw my pension literally get cut in half at YRC, so trust me, anything can happen! That was the highest motivating factor for me to leave them and come to ABF, but ABF has proven to be a much better outfit completely. I know a pension buyout would greatly benefit the company, but I believe that would benefit all of us in the long run! And once those 401k accounts are legally distributed into the employees name, it belongs to the EMPLOYEE. If you leave the company, or the company leaves you, doesn't matter, it's your account, you own it! And at 59 and 1/2 you can start taking distributions from it without a tax penalty, you just pay regular income tax on it as you take it out, but you deducted the amount you put in while you were working reducing your taxes while you were contributing. It's a good deal if they can ever make it happen!
The Central States Pension Fund used to be a strong solvent fund, but it is no longer a place you want to invest money, so sad, but true. And now, YRCW has gotten this 25% contribution rate, and ABF is the only one paying the full bill. I can definitely see ABF's point of view, and personally agree with it.

[ABFer]

In its day our pension plan was righteous If you left one company for any reason you would pick it right up where it left off. Today there is almost nowhere else to go. I would tend to agree that a move into another type of pension could be attractive but as Muler has put it, "the right break away pension plan" would be imperative. As compared to a self directed 401K our union pension managers are supposed to be better at financial planning than we are and they should be able to attain higher returns. The pension funds are also broader based than an individual 401K and therefore should be more stable. Did the fund I'm in take a dive along with the rest of them? Sure did! But would I have done better on my own? I'm not so sure about that so I don't point a finger of blame at them. I think the folks at 25 Louisiana Ave. are getting our message. Let us see how things go in the near future.

[TurnCoat]

In its day our pension plan was righteous If you left one company for any reason you would pick it right up where it left off. Today there is almost nowhere else to go. I would tend to agree that a move into another type of pension could be attractive but as Muler has put it, "the right break away pension plan" would be imperative. As compared to a self directed 401K our union pension managers are supposed to be better at financial planning than we are and they should be able to attain higher returns. The pension funds are also broader based than an individual 401K and therefore should be more stable. Did the fund I'm in take a dive along with the rest of them? Sure did! But would I have done better on my own? I'm not so sure about that so I don't point a finger of blame at them. I think the folks at 25 Louisiana Ave. are getting our message. Let us see how things go in the near future.

Point well taken, I am certainly no financial genius, but if you do a little research, and invest in good mutual funds with a long track record of outperforming the overall market and stay away from individual stocks, and gimmicks like gold you will have some money, IN YOUR ACCOUNT,and if you don't spend it all you can give it to your kids or favorite charity in your will. Hell, now that I'm currently still under the YRCW MOD plan, and dropped dead, my wife can't even draw a dime off those 23.5 years that are paid on me! That is BS. Hopefully after 12 months at ABF I will snap back. I have some life insurance, that would keep her up just fine, but If I die in the mean time, all that was paid in is history. Thanks, Billy Z. I hope you choke on that 7 million severance they paid you for your orchestration of the "out of court bankruptcy" In my opinion, I would rather control my pension, if I had the option, rather than it being tied up in a volitale pension fund. I hope we eventually get some reasonable options to look at.

[teambro]

Why do you some people honestly believe that a 401K will serve them better than a defined benefit plan? Please watch the program on the website Frontline called "can you afford to retire". After watching this program please respond back with your insights. Why have all company's gone to 401k instead of a defined benefit? Well its real simple, its better for the employer than the employee. If you are so anxious to get a 401K well go ahead and open one up. You can get one and still leave my pension alone.

[Stoney]

Why do you some people honestly believe that a 401K will serve them better than a defined benefit plan? Please watch the program on the website Frontline called "can you afford to retire". After watching this program please respond back with your insights. Why have all company's gone to 401k instead of a defined benefit? Well its real simple, its better for the employer than the employee. If you are so anxious to get a 401K well go ahead and open one up. You can get one and still leave my pension alone.

Problem with pensions is the defined benefit. No matter how well or bad the the pension does, we are guaranteed a certain amount.

So of the pension is on trouble, not making enough money, it slowly goes broke.

And its a different world today, than 30 years ago. Not enough are paying into these pensions to keep them fully funded.
Like it or not, we have to adapt to the times.

I think the best way to go, is to ease off the pension plans. Something like new employees won't get a pension, they go straight to a 401k. And anyone already vested in the pension stays with it.

401ks are not bad vehicles in the long run.

[ABFer]

Problem with pensions is the defined benefit. No matter how well or bad the the pension does, we are guaranteed a certain amount.

So of the pension is on trouble, not making enough money, it slowly goes broke.

And its a different world today, than 30 years ago. Not enough are paying into these pensions to keep them fully funded.
Like it or not, we have to adapt to the times.

I think the best way to go, is to ease off the pension plans. Something like new employees won't get a pension, they go straight to a 401k. And anyone already vested in the pension stays with it.

401ks are not bad vehicles in the long run.

As much as it kills me I agree with you here. I love my defined benefit plan but I see the reality of the times. If ABF put the $12,000 per year into a 401K in my name and I could add to it at a rate that worked for me it could be a good thing. No unfunded liability for ABF and $240,000 plus growth after 20 years would be fine with me.

BUT a 401K with my contributions being the primary contribution and a secondary of up to say, $3000 by my employer... not good enough.

[Muler]

Our capitalistic economy requires companies to always act in their best interests. Many times companies will confuse the two and opt for short-term benefits rather than long term. Yet, ABF making more money only benefits its employees considering they are the ones making the contributions to our retirement and not to mention paying our paycheck. A defined pension plan is simply a promise to pay a benefit in the future. The money will be put into the market in areas like stocks, bonds and treasuries and then they will subtract out the expenses to run such a fund. A401k is also in the market, but allows the individual to select what he or she thinks is the best instrument for investment. Almost all mutual fund companies would charge fees less than what the pension is charged as a percentage. Vanguard and Fidelity are very resonable with their pricing and have a great record of investment success.

As for TJ negotiating the buyout. I don't trust him either. But this negotiation is about perfecting a legal transaction that would involve tax attorneys, not truck drivers. He cannot make a special deal for his local (which is what my sources said he got in hot water over) at the detriment to all other locals.

Interesting on the TJ trouble for taking care of his boy's. Tell me more! YOUR ALL EARS BROTHER ALWAYS!

[nothumbleenough]

As much as it kills me I agree with you here. I love my defined benefit plan but I see the reality of the times. If ABF put the $12,000 per year into a 401K in my name and I could add to it at a rate that worked for me it could be a good thing. No unfunded liability for ABF and $240,000 plus growth after 20 years would be fine with me.

BUT a 401K with my contributions being the primary contribution and a secondary of up to say, $3000 by my employer... not good enough.

Most of that $12,000 per contribution goes to pay currently retired teamsters. In the scenario of a pension withdrawl, two seperate and distinct columns will have to be established. One column is for the individual to reap the benefits of his labor by establishing his own individual retirement account whereby he manages how it is invested by choosing the appropriate risk vehicle like stocks, bonds, or securities. Secondly, we as teamsters must recognize the solidarity we have of those teamsters currently retired. The math is complex considering the current assets of the pension and future benefits we will have to make for this second column. Additionally, those that have contributed for a number of years but are still a long way from retirement. I will relate something close to what I have in mind, but claim having no real insight to exact numbers. I have 10 years paid into the pension, last time I checked, my retirement benefit was around $1200 at age 65. As you mentioned, ABF paid around $12000 into the pension in my name in 2011.

So lets say ABF continues with our normal wage progression tied closely to cost of living adjustments. Meaning we don't do the YRC giveback on wages. But the retirement portion of our contract is limited to say $10000 per individual. This will represent a cost savings of $2000 per employee. However, since they are having the added benefit of losing the contingent liability of the pension, (which I estimate to be around $1Billion plus or minus a few hundred million) they will be getting a second significant benefit from getting out from the liability. They have to establish a fund that pays yearly in real money, not company stock to those currently retired. If the next contract goes 5 years, I would estimate ABF will have contributed close to 100 million to said fund, and once the 5 year contract ends, so do the contributions from ABF to this teamster fund but they continue to make at least the $10000 yearly contribution for current employees.

The information above is the framework for a deal to get done. The following is what can be adjusted either up or down to make certain everyone comes out as fair as possible. Using the $10000 cap, 50% goes to the individuals own account, the other 50% to the teamster fund for the length of the contract with the understanding, that when the contract ends, so does the contributions from us for the teamster column. Secondly, come up with a workable solution that gives us who have paid in for a number of years but agree to a significantly reduced pension. In my instance, eventhough my future benefit is suppose to be $1200, I would take much less if you allow me the time to make up the difference. Since I have over 20 years to retire, a figure like $500 is not unreasonable. Now if I was closer to retirement, (less time to make up the difference) that figure would not be so low, maybe $850. Even the currently retired teamsters would recieve some sort of haircut. I would speculate on an exact figure, but no less than a 10% cut.

It is important to realize this entire idea operates with the philosophy that we as teamsters realize a haircut must be made by everyone i.e., current employees, those retired and in turn, the company will survive longterm. If you look at the situation and think ABF will survive no matter if a deal is struck regarding its pension obligation and therefore crazy to entertain such conversations please state your reasons why you think they will not go the way of every other union LTL. Meaning provide you logic and reasoning.

[bad slavin]

Thanks ,docker and r-14 for the help with my post. Sorry about the delay on getting back to you guys, my wife had distracted me away from what she calls those "damn trucking boards". she has no idea !!! This is our outlet! Over 20years of this abnormal lifestyle,i finally get an outlet with people who understand, and she is bustin' my b$lls !!!! It's a good thing i love her !