Lane Chase, Vice President/A.B.A.
V.president@atu758.org
IS 100% EMPLOYER PAID LONG TERM DISIBILITY A BIG DEAL?
CHECK OUT JUST ONE REAL EXAMPLE BELOW!
Employment Phase 1
Recently, Isaac and I have been assisting a member of our local, with his OJI claim. His career at P. T. started out fine, and he planned on working out his career at Transit, after a number of years of hard work, he suffered an injury that would change his entire life. This member has been at P.T. more than five years, so is not eligible for Social Security Disability, and he is too young to retire. If he did retire it would not provide any significant income. At his level of pay and number of years of work, and penalty for early retirement it works out to about $300.00/ mo. to live on. The disability if declared permanent will finish his employment at Transit. He is now faced with a decisions, (he doesn’t control) that will alter his and his family’s lives permanently.
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Employment Phase 2
Once you have suffered a disabling injury like this your options quickly start to become very limited. One of the first things to happen is you enter a world of doctors, therapy, and paper work, probably all of which you not familiar with. You also step through the door of the world called Labor and Industries. As, your injury progresses toward wellness, or not, the “clock is ticking.” The first thing you exhaust is your sick leave, and then your vacation disappears. You soon reach the point if unable to return to work, that Transit will no longer be able to hold your position for you, and you will be terminated for non-availability for work. At this point you have now lost your income from work and will have to survive on savings, and any L and I payments you may qualify for.
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Employment Phase 3
Now that you have been let go, the options you have really become limited. You are faced with no income, no health insurance, and few prospects of employment. By now the chances are you are faced with the choice of cashing out any savings you may have in order to save your house, and put food on the table. If and when you receive a settlement from Land I or Transit, there is no guarantee how much, or how long it will last. One bright spot may be that you can be retrained into another career, but who’s going to hire someone that is permanently disabled. Think LTD is no big deal. It would have given this member $1600.00/mo. Tax free. Also he could have waited to take his PERS retirement, turning it into about $800.00/mo. Instead of $300.00.
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Do You Know?
1. Is PERS retirement based on earnings, or how much you save?
2. If Transit was to enter the Social Security System how long before you would be covered by disability again?
3. What is the % of return on the match for the money you put into deferred comp savings?
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Thank-You to all who voted, assisted, helped, and participated in the contract votes!
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Answers
1. If you said savings, you’re wrong it is based on the average of your highest five years of earnings!
2. It is keyed to your age, could take as long as ten years!
3. 100%!
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DEFERRED COMPENSATION?
What It Could Do?
Deferred compensation is a benefit that has been a long time coming. And, even though it is being raised it still needs to be at least the percentage that you would be paying for Social Security. This benefit could make the difference between being able to own and drive a car, or riding the bus for your retirement. It could make the difference between traveling in your retirement or staying home. Don’t get me wrong the riding bus and staying home are both wonderful options to have. Deferred compensation could help you to afford the necessities and niceties of retirement that you may want to have, or NEED. Also, let’s face it your retirement is your responsibility and the only one you can really depend on to provide for it, is YOU! As an officer of this local I urge you to sign up for the Deferred Compensation Plan. If you do not understand what or how to sign up please contact me ASAP, Lane Chase 297-9110. The point is don’t wait, do it while time is on your side, the clock keeps ticking toward your retirement whether you sign up or not. None of us know how
long we can or will be able to work, that money could have saved up and most likely made a difference in your life.
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What Should I Do?
Start saving as soon as you can, whether or not you get the match. Time can be your valuable $$$ ally. The more time you have until you retire the less you actually have to save to reach the goals you set for yourself. If you wait, the more, $$$$$$ you have to save, to make up for lost time and time becomes your enemy. Many times, (excuses, also your enemy) I have heard the response to my question, “Are you participating in the Deferred Compensation Plan?”
I plan too!
I was waiting for the match!
I can’t afford it!
I was waiting until I make more!
I don’t know what to do!
I don’t know what to pick!
I haven’t had the time!
I been meaning to!
All of these reasons are called procrastination and add up to lost time. Savings, None!!! The Figures at Right Would Double With the Deferred Compensation Match!!!!!
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What Can I Save?
The first idea to conquer is
that you have to save $$$$ save a lot or it wont make any difference. Any amount of $$$$ you save, can and will make more of a difference than no $$$$ saved. Working at Pierce Transit places you out of the Social Security System, so you really should be putting at least 6.5% of your pay into the deferred compensation plan. You really are not saving any $$$$ unless you put in more than 6.5%, if you are not, you are spending the money that would have gone to, Your Social Security. Take 3 examples:
1. Age 25 saving $15.00ppd
2. Age 35 saving $30.00ppd
3. Age 45 saving $45.00ppd
Who ends up with the most? Example assumes consistent
saving, no withdrawals, and 3.0% interest pr /yr, and retiring at 65. Ans. #2 with $37,641, #3 with $31,889, #1 with $29,828.
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Now, that our contract has passed, this coming January, our 3 percent 457 deferred compensation match goes into effect. If you have not started your 457 account previously, consider speaking to Human Resources for information. If you are not able to get all of your answers from HR, ask for the phone numbers of the represented deferred compensation mangers who visit Pierce Transit occasionally. By speaking to one of the representatives they might be able to guide you and help you decide which opportunity is best for your needs. Remember, this can be additional retirement money for you.
