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Too Young to Retire
Old 02-23-2010, 07:15 PM   #1
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Too Young to Retire

I am in the following situation:
I continue to be employed by the same company. I will be 67 in May, 2010.
I reached full retirement age in May, 2009 and I began taking reduced benefits in February of 2009. When I reached full retirement age in May of 2009 I began collecting full retirement benefits.
My employer has continued to withhold Social Security and Medicare and to pay their part.
Due to a class action suit (explained below) the company made a decision to place all employees into the company pension plan effective January 11, 2010.
I have the below listed concerns:
1.Social Security and IRS regulations mandate that my employer continues withholding social security and makes their contribution to social security. No Social Security is being withheld.
2.I have been forced into a pension program that I elected not to participate in. A deduction is taken from my wage each pay period for the pension program. (but not social security)
I see myself as being vulnerable to action from Social Security since I continue being employed and there is no contribution made on my employer’s behalf…or mine.
1.I am not currently in a position to increase my Social Security benefit since there is no contribution.
2.I am eligible to buy back time due to long term temporary employment by this company.
3.No one associated with my company has been able to explain the resolution or legality of my situation.
My concern is mine only however others in my company are in a similar situation.
My employer refused to allow me to participate in the company pension program when I was hired in 2003 due to “health circumstances”. I had high cholesterol and high blood pressure when I was hired. These conditions have been corrected; however I elected not to pursue participation in the pension program and to continue my contribution to Social Security. My employer now has 85 employees in my union who were in the same position as me. Overall the company has 205 employees in this “category”.
The company fears retribution due to class discrimination. This is their problem, I want to protect myself and my future benefits.

Thanks for any input.
Great forum, Keep it up
Larry
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Old 02-23-2010, 07:23 PM   #2
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67 and still working. Are you sure you want to post your questions to the Early Retirement forum?
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Retired in 2005 at age 58, no pension
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Old 02-23-2010, 07:33 PM   #3
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Thanks. I appreciate your response and totally understand why you acted. Apparently there are none in my peer group who have a clue...I have looked. If you could recommend a forum for someone who refuses to quit I would greatly appreciate it.
Larry
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Old 02-23-2010, 07:37 PM   #4
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Thanks. I appreciate your response and totally understand why you acted. Apparently there are none in my peer group who have a clue...I have looked. If you could recommend a forum for someone who refuses to quit I would greatly appreciate it.
Larry
Have you contacted your local Social Security office about the failure of your employer to pay SS taxes on your earnings? It would seem they would be very interested to know your employer isn't doing so. Regardless, I wouldn't think you would have to worry about any flak from SS towards you since it appears the problem is with your employer.
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Old 02-24-2010, 12:53 AM   #5
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I'm certainly no expert, but this does not seem right at all. Private pensions are all supposed to work in conjunction with Social Security, not outside of it. Government pension plans (and I think non-profits as well) are designed to stand alone.

I would go talk to someone at the union and ask them to explain it to you.
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Old 02-24-2010, 05:02 PM   #6
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Thanks for your comments. I have approached the pension program administrator with no success. They had not considered the impact on an employee who was already receiving benefits. Fortunately for me I cannot be forced to leave the company. My union is involved in this issue of "requiring" us to participate in the pension program; I am the steward for my group, however my situation is unique in that I am already receiving benefits, no others in this "class" are. Social Security has been contacted by electronic mail and responded with information I already had....the employer has to continue withholding my contribution and must contribute their part. The company has 2100 employees and the their objective is to disassociate with Social Security altogether. I am scheduling a face to face visit with Social Security. I will post as things progress. Thanks again
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Old 02-25-2010, 11:00 AM   #7
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67 and still working. Are you sure you want to post your questions to the Early Retirement forum?
Quote:
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If you could recommend a forum for someone who refuses to quit I would greatly appreciate it.
Larry
Oh, hey, that phrase leads straight to the answer: Bogleheads.org.

Seriously, though, there are a number of SS experts and financial advisers there who would be able to offer more resources.
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Old 02-26-2010, 10:00 AM   #8
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My employer now has 85 employees in my union who were in the same position as me.
This whole situation sounds a bit sketchy to me. Go to your union and let them carry the ball. That's why you pay all of those wonderful dues!
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Old 02-27-2010, 07:01 PM   #9
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What in the world does "health circumstances" have to do with a pension plan? I never heard of such a thing!

Why aren't you retired? Its the best thing; can't imagine working at age 67. But to each his own.
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Old 02-28-2010, 12:52 PM   #10
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I am pretty sure many railroad companies do not pay into SS.
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Old 02-28-2010, 01:19 PM   #11
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Its true railroads don't pay into SS, they have their own plan. My brother works for the RR out west. He gets full retirement at age 65 and when his wife gets to 65, she gets 50 percent of his amount. What a deal! That's like getting a 50-percent raise when your wife reaches 65. (In my brother's case, it will be 7 years.)
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Thanks for the suggestions
Old 03-03-2010, 07:30 AM   #12
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Thanks for the suggestions

My union (IBEW) is actively involved. These things do take time. There are 84 others in my union forced into this "Class" however I am the only one who is already drawing Social Security. It goes further, all hourly city workers including the police/sheriff/fire depts have members in this "Class"....I think about 250 personnel in all.

As for me continuing to work; Do you have a hobby that you are passionate about? I do,and it pays very well.

Thanks for your comments
Larry
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Old 03-03-2010, 10:02 AM   #13
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People who love what they do and get paid well are very lucky. I worked for over 44 years and never cared for my work.
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Old 03-03-2010, 11:30 AM   #14
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It goes further, all hourly city workers including the police/sheriff/fire depts have members in this "Class"....I think about 250 personnel in all.
You confused me a little with this statement. Do you work for a private company or a local government? If it is the latter they can be exempt from SS if they have a pension plan.
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Thanks for the comments
Old 03-03-2010, 07:29 PM   #15
Confused about dryer sheets
 
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Thanks for the comments

For clarification: I work for a city government, specifically for the municipal electric utility. We are represented by several labor unions. There are many other divisions, police and sheriff , fire, water & sewer, garbage, etc. We have a consolidated government where Jacksonville FL is in Duval County and the county was consolidated into one municipality about 30 years ago making Jacksonville the largest city in the United States in land mass. All employees were eligible for the pension program with exceptions. If they had certain medical conditions when hired such as high blood pressure or high cholesterol (both in my case) they were excluded unless a waiver was signed. The waiver acknowledged that if these conditions caused the death of the member then the pension program would not pay. Yes, this is stupid. Certain individuals recently contested the "medical exclusions" and the pension board panicked and a decision was made to include everyone. There are many issues. This goes back to the day of hiring. Everyone in the class must be offered the opportunity to "buy back" their time to the day of hiring. This is an accounting nightmare created by our employer.. As I stated earlier, 250 + employees in several unions are affected. I just happen to be the only one who is already drawing social security benefits. My selfish concern is that I expect my employer to continue Social Security contributions and that I am not penalized by Social Security so that I get my annual raises that are rolled into the 30 year formula of earnings..

Thanks all

Larry
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Old 03-04-2010, 12:00 AM   #16
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What a mess this is. After reading online a bit I kind of jotted down a synopsis of the big picture involving Jacksonville and its pensions:

Jacksonville has multiple defined benefit pensions plans. General Employees Pension Plan (GEPP), Corrections Officers Pension Plan (COPP), and the Police and Fire Pension (PFPF).

The COPP seems to be a more-recent creation brought on by the metropolitanization / unification of the city/county government structure. They are all jailers working at the Duvall County Jail.

Like way too many municipal pension plans, the Jacksonville plans were overly generous and, combined with conditions in the financial markets, find themselves seriously underfunded at the same time as revenues are decreasing.

Quite a bit of ruckus has been raised recently about the situation and it's a real mess. Name-calling, talk of tax increases, pay cuts, furloughs, lawsuits, etc.

It was recently discovered that the city had not only been screwing up the pension systems, but they were also screwing over a large number of their own employees. Contrary to provisions in the city charter, they were refusing to accept some employees into the pension fund for medical reasons. Anyone not passing the physical was outside the pension system and the city and the employee made SS contributions as part of FICA.

The dirty little secret came out a few months ago when, as part of an attempt to fix some of the problems, the city decided to offer a DC pension plan in addition to the DB plan. Somebody started digging and found that an incredibly high number of employees had been denied pension plan participation for medical reasons. 85% of them coming just within the current mayor's term. And the reasons for rejection were often bogus. The mayor was cutting his expenses by scheming to get most employees into SS (6.2% employer contribution vs 13.5% contribution for employees in a pension plan).

The union representing the corrections officers found rampant abuse of the medical rejection clause and filed a lawsuit. The city rolled over and begged for mercy quickly, it openly admitted that it had violated its own charter and no employee should have been excluded from participating in the appropriate pension plan. They intend to settle the lawsuit, but they don't know exactly how they are going to accomplish a fair settlement, or pay for it.

One decision that has been made is to put everybody into the pension system, which is where they all should have been in the first place. The only exceptions are about 200 employees who are appointees, and they have a choice to either go SS or pension.

The city recognizes that all of the employees who have been covered under Social Security should never have been outside the pension plan. They recognize that the courts are going to expect the city to make all of those people whole. Which means they are going to be reimbursed for all of their past Social Security contributions. The city would no doubt like to get all of its contributions back as well. Nobody has a clue how any of that will work out.

But they did agree that it made no sense to keep making Social Security contributions if the city was, in effect, retroactively withdrawing all of it's employees from Social Security and covering them under the pension plan.

Also, the employees being switched from Social Security to the City Pension will have to make some kind of payments into the system. That's a complicated mess because somebody has to figure out all of those retroactive contributions at the appropriate employee contribution rate (8% I think) at different salary rates for years and years. Then the question comes as to how to fairly get that money out of the employees.

This is a goat-rope of at least the second magnitude.

LarryBob - you are the Catch 22 in all of this because you're already receiving SS payments. However, as far as the city is concerned, you are just a pimple on the huge, hairy buttocks of ten-ton problem.

If I were in your shoes I would get my deer rifle and go to City Hall, no, seriously, what I would do after I got done being mad is go ahead and talk with the folks down at the SSA. But I wouldn't put much hope in some low-level customer service rep whipping out a rule book and saying "Aha! Here's the solution!" I would anticipate confusion on their part and then they'll either tell you something totally wrong or they'll kick it upstairs.

Secondly, I would start figuring out what my desired solution is. Right now you're happy with what you have been getting and want it to stay that way, but you need to start playing "what if?".

What if you wind up being removed from Social Security and retroactively placed in the pension system? Figure out what the pension would pay you when you retired and start working on a spreadsheet. You may find that the pension was a better deal, in which case you might be in favor of the change.

Even if you don't want it to happen, you need to prepare yourself for how to deal with it if it does happen. Should you be spending your SS checks on whiskey and women, or do you want to bank that money in case you have to give it back to Uncle Sam?

Lastly, and this one is a bit of a gamble, in the event you get to make a choice, you might want to make a decision as to which system you think will stay out of bankruptcy (if not both). The city plan obviously has some problems, and you won't have to do much online research to find plenty of material saying SS is bankrupt and won't last (that being a debatable point, of course).

Good luck with all of this.
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Leonidas, thanks for your summary of the facts
Old 03-04-2010, 07:14 AM   #17
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Leonidas, thanks for your summary of the facts

I do appreciate your time picking out the detail of the boondoggle. I also anticipate that a low level Social Security desk jocky will not have a genuine answer.

I am prepared to buy my time from the pension plan but I will not give up my social security. I am concerned as to the solvency of the pension program. I heard the mayor, just this morning, speak of layoffs and other buget cuts. He cannot touch anyone in my group but none of us want to see police,fire and other services cut.

I am saving your very good summary for my own reference and talking points to use when I discuss this with the pension and Social Security people.

Regards and thanks again

Larry
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