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Date: 03/26/15 14:56
Amtrak cuts pension contributions, retiree medical plan
Author: GenePoon

From: Employee Communications
Sent: Thursday, March 26, 2015 2:59 PM
Subject: Special Employee Advisory - A Message from Joe Boardman -
Retirement Changes

March 26, 2015

RETIREMENT CHANGES

Dear Co-workers,

Amtrak faces high—and rapidly rising—costs to fund our pension and
retiree medical plans. These retirement benefits have historically
been generous, yet they have also positioned Amtrak as an outlier
compared to our competitors.

These facts have led us to the conclusion that our company can no
longer sustain the growing financial burden of our retirement
benefits.

Based on thorough analysis of current and projected costs to our
business, as well as ensuring Amtrak’s continued financial health, we
have identified some necessary actions. These changes will help
stabilize our rapidly rising benefit costs, help us re-invest in our
business and people and position us to more effectively compete for
(and win) new business. These changes are consistent with other
companies in our industry and other for-profit companies.

Even after these changes are implemented, Amtrak will still offer a
strong and attractive Total Rewards package to our employees.

The Amtrak Board of Directors recently approved the following changes
to Amtrak’s retirement program for non- agreement employees and
non-agreement retirees:

1. Amtrak Retirement Income Plan (Pension)

Amtrak will “freeze” benefit accruals in the Amtrak Retirement Income
Plan on June 30, 2015 for eligible, non- agreement employees.
Following this date, employees will not accrue additional benefits
under the plan, but they will not lose any benefit earned to date.
Benefits through the Railroad Retirement Board (RRB) will continue
unchanged.

2. Retirement Savings Plan – 401(k)

Amtrak will increase its maximum company match on employee
contributions. Beginning with the July 3, 2015 paycheck, Amtrak will
match employee contributions dollar for dollar, up to 7 percent – an
increase from the current 5 percent company match.

3. Retiree Medical

Amtrak will continue to provide access to comprehensive retiree
medical coverage for all retirees and most employees, but how this
coverage is provided and paid for will change:

* Post-age 65 Coverage – Beginning July 1, 2015, current eligible
post-age 65 retirees will no longer be enrolled in the existing
Amtrak medical plan options. Instead, Amtrak will provide an annual
subsidy to current eligible post- age 65 retirees and, upon
retirement, to eligible employees who were age 50 or older on July 1,
2015 to help them purchase post-age 65 coverage through a private
health insurance exchange. Medicare will continue to be the primary
source of medical benefits.


Annual Subsidy

Current Retirees (as of June 30, 2015)
$4,800/retiree and $4,800/spouse

Employees Age 50 and Over on July 1, 2015
$4,800/retiree and $2,400/spouse

Employees Under Age 50 on July 1, 2015
Access only – retiree pays the full cost

* Pre-age 65 Coverage – Amtrak will provide the same pre-age 65
medical coverage available today to retirees and, upon retirement, to
eligible employees age 50 and over on July 1, 2015. Amtrak retirees
will continue to share the cost for coverage. Employees under age 50
on July 1, 2015 will have access to pre-age 65 medical coverage, but
will pay the full cost for coverage.

* Eligibility – The eligibility for the retiree medical plan will
also change from age 55 with five years of service to age 55 with 10
years of service, or to age 60 with five years of service for those
who retire on or after July 1, 2015.

If you were hired or transferred from an agreement position to a
non-agreement position on or after April 1, 2013, you are not
eligible for the Amtrak Retirement Income Plan or the Retiree Medical
Plan. As a result, the changes to these plans do not impact you.
However, you will be eligible for the increased company match into
the Retirement Savings Plan – 401(k).

Amtrak will continue to make a substantial investment in our
retirement program—including Amtrak’s contributions to the Railroad
Retirement Board (RRB) benefits and the increased 401(k) match. These
changes provide us with a more predictable way of managing risk and
funding of our program while continuing to provide a competitive
retirement benefits program. Amtrak continually evaluates its benefit
offerings to ensure its competitive position and ability to attract
and retain talent, and reserves the right to modify its benefit
offerings at any time and for any reason.

What Happens Next

This letter is only a summary of the upcoming benefit changes. In the
coming weeks, we will provide additional information about online
tools, webinars, face-to-face meetings and one-on-one counseling to
help you evaluate your options and make decisions on planning for
your financial future.

Pension benefit statements will be mailed by the week of April 6,
2015 to non-agreement employees who are eligible to retire as of June
30, 2015. Generally, to be eligible to receive your Retirement Income
Plan benefit, you must meet the minimum age (55) and Amtrak service
(five years) requirements or be age 65.

Specially trained representatives are available to answer your
questions about the 2015 Amtrak Retirement Program Changes. If you
have any questions, please contact the Amtrak Benefit Service Center
at 800-481-4887 (Monday – Friday, except holidays, 8 a.m. – 6 p.m.,
Eastern Time).

Thank you for your support as we implement this critical change for
our business.


Sincerely,

Joe Boardman
President and CEO



Date: 03/26/15 15:08
Re: Amtrak cuts pension contributions, retiree medical plan
Author: joemvcnj

Really no different than what most large companies do nowadays.



Date: 03/26/15 15:12
Re: Amtrak cuts pension contributions, retiree medical plan
Author: me

joemvcnj Wrote:
-------------------------------------------------------
> Really no different than what most large companies
> do nowadays.

And that in itself is very unfortunate trend for us, as a supposed developed industrialized nation....



Date: 03/26/15 15:16
Re: Amtrak cuts pension contributions, retiree medical plan
Author: andersonb109

Better than cutting more and more passenger services that eventually will drive customers away from the trains resulting in fewer jobs. I have never understood why it's the job of the  employer to provide payment after employment is over. I thought that's what a 401K was for. With proper investment, it has been well proven over time that substantial growth will occur.



Date: 03/26/15 15:28
Re: Amtrak cuts pension contributions, retiree medical plan
Author: Fred

The 401(K) program on the railroads hasn't been around "that long" when you consider "most" railroaders have over 35+ years in when they retire. Also, the railroad I worked for did not offer to match what the employee was paying in. 



Date: 03/26/15 15:34
Re: Amtrak cuts pension contributions, retiree medical plan
Author: knotch8

I, too, have no problem with the changes.

Amtrak traditionally paid less to its managers than "regular" railroads or private enterprise did, typical of many Government agencies, or "private" companies subsidized by the Government.  But, as with Government agencies, it offered attractive benefits to counter the lower salaries.

In recent years, Amtrak has raised its management salaries, so it seems appropriate to reduce the benefits, as the vast majority of other companies have done.

Raising the 401K match to 7% is a big deal.  I don't know of many companies that match that well.  I think it's really generous.



Date: 03/26/15 15:40
Re: Amtrak cuts pension contributions, retiree medical plan
Author: webmaster

I think it is pretty crummy for those people who have been with the railroad for many years, only to have the rug pulled away and replaced with an extra 2% to a 401k.  Just because other corporations are doing it doesn't make it right.  Pension benefits increase substantially with the final years of employment and this is important to workers looking to retire in a few years.

Todd Clark
Canyon Country, CA
Trainorders.com



Date: 03/26/15 15:59
Re: Amtrak cuts pension contributions, retiree medical plan
Author: ctillnc

Retiree benefits other than 401(k) accounts are doomed. Game over. American companies that compete in global markets have to factor benefit costs for current and retired employees into their prices and margins. Most competitors overseas have no such burdens. Either the governments are funding the benefits or there are no benefits. Either way, it puts American exporters at a considerable disadvantage. 



Edited 1 time(s). Last edit at 03/26/15 16:00 by ctillnc.



Date: 03/26/15 18:03
Re: Amtrak cuts pension contributions, retiree medical plan
Author: ColdRainAndSnow

webmaster Wrote:
-------------------------------------------------------
> I think it is pretty crummy for those people who
> have been with the railroad for many years, only
> to have the rug pulled away and replaced with an
> extra 2% to a 401k. Just because other
> corporations are doing it doesn't make it right.

Can you think of a faction of Congress that likely pushed hard on Amtrak to do this? Could it be the same ones who constantly excoriate the NRPC for "not running more like a business?" 



Date: 03/26/15 18:14
Re: Amtrak cuts pension contributions, retiree medical plan
Author: webmaster

>
> Can you think of a faction of Congress that likely
> pushed hard on Amtrak to do this? Could it be the
> same ones who constantly excoriate the NRPC for
> "not running more like a business?" 

Please do not drag this into the gutter with a political war. Trainorders is not the place for it.

Todd Clark
Canyon Country, CA
Trainorders.com



Date: 03/26/15 18:18
Re: Amtrak cuts pension contributions, retiree medical plan
Author: ColdRainAndSnow

webmaster Wrote:
-------------------------------------------------------
> >
> > Can you think of a faction of Congress that
> likely
> > pushed hard on Amtrak to do this? Could it be
> the
> > same ones who constantly excoriate the NRPC for
> > "not running more like a business?" 
>
> Please do not drag this into the gutter with a
> political war. Trainorders is not the place for
> it.

Amtrak is just acting more like a business. As it has been repeatedly told to do so by its detractors. So we're not going blame Amtrak on this one. 



Date: 03/26/15 18:22
Re: Amtrak cuts pension contributions, retiree medical plan
Author: NSClevelandLine

knotch8 Wrote:
-------------------------------------------------------
> Raising the 401K match to 7% is a big deal.  I
> don't know of many companies that match that
> well.  I think it's really generous.


The company I'm with stops at 3%...

Posted from Android



Date: 03/26/15 18:26
Re: Amtrak cuts pension contributions, retiree medical plan
Author: ProAmtrak

Yeah but it be nice if Congress would quit having someone looking over their shoulder all the time!



Date: 03/26/15 18:58
Re: Amtrak cuts pension contributions, retiree medical plan
Author: MEKoch

After my wife retired, all medical benefits were ended.  They gave her a $10,000 buyout.

All GM managment people lost their medical benefits at retirement. 



Date: 03/26/15 19:33
Re: Amtrak cuts pension contributions, retiree medical plan
Author: AmHog

So basically if you a fortunate enough to put $300,000 in your 401K, Amtrak will contribute $21,000. 
   Not a lot to compensate for the loss of the pension.



Date: 03/26/15 19:57
Re: Amtrak cuts pension contributions, retiree medical plan
Author: bnsfbob

I think that in 10-15 years, there won't be any employer-provided health plans.

The company I was working for had a Canadian division. We would send work there because overall labor costs were lower in Canada vs. the U.S. because in Canada, the government pays the healthcare. I think it is very ironic that U.S. companies are so willing to push employees off of company-paid health care to Government provided or subsidized services (Medicare, Medicaid, Obamacare) while at the same time publically supporting the conservative politicians who are seeking to abolish such services. Nonetheless, a growing constituency for increasing Medicaid coverage and keeping the Affordable Health Care Act intact is the huge U.S. hospital industry and many major corporations.

Bob



Date: 03/26/15 19:58
Re: Amtrak cuts pension contributions, retiree medical plan
Author: DavidP

AmHog Wrote:
-------------------------------------------------------
> So basically if you a fortunate enough to put
> $300,000 in your 401K, Amtrak will contribute
> $21,000. 
>    Not a lot to compensate for the loss of the
> pension.

No....if you make $100K per year and contribute $7K of that to your 401K, Amtrak will also contribute $7K....so your 401K is growing by $14K per year before appreciation.

And no one is "losing" their pension.  Amtrak is simply not contributing more to the pension account.  If you've worked 30 years so far, the pension you'll get on retirement is based on 30 years service, even if you continue to work for another five years into the future.

Dave



Date: 03/26/15 20:20
Re: Amtrak cuts pension contributions, retiree medical plan
Author: EtoinShrdlu

This is the key phrase: "Amtrak’s retirement program for non- agreement employees". There will be no effects on employees who work under a union agreement because what Amtrak can and can't do re the medical and 401(k) stuff is covered by the agreements. Amtrak has never matched union-covered employee contributions to 401(k) plans.



Date: 03/26/15 22:40
Re: Amtrak cuts pension contributions, retiree medical plan
Author: kingman

If your over 65 or disabled your on  Medicare and for 9800 a year you can get a medicare supplemental plan or advantage for you and your spouse and have no problems, The issue would be for folks not yet on  Medicare who have to go to the exchanges assuming you live in a state that has one for you health insurance. Don't know what 7200 per couple can buy these days for a spouse +1 or a couple if they still have qualified dependents on their insurance. The Supreme court could screw all this up in a month or so if they disallow the federal Govt from being an exchange in place of the states.



Date: 03/26/15 23:13
Re: Amtrak cuts pension contributions, retiree medical plan
Author: mp51w

You could lose that 7% real quick in a 401K, if the economy goes bad again.



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