Conference 7.286::digital

    Yeah, he alluded to the fact that people should not be taking time out
    for going away luncheons...do that after hours.  He was not happy about
    being scheduled to talk at Win Hindle's retirement party at 4:xx...it
    should have been after 6:00.
    
    He was also commented about people leaving the facility at 4:15 one 
    afternoon as he was entering the facililty.
    
    Draw your own conclusions.
    
    During the Q&A someone piped up that here in Digital we are known for
    flex time and many people who are here at 6:30 am will leave before
    5:00.
    
    He also did not know that LKG also housed Network SOFTWARE people.  So
    much for knowing who your audience is.
    
    -s
    

    He also mentioned we are about the only place where matching 401K funds
    are not vailable to the employee.
    
    Think we'll see a change in this "once we become profitable again"?
    
    I'll hold my breath.
    
    >8(
    
    -s
    

>>                      <<< Note 3374.2 by DELNI::DISMUKE >>>
>>
>>    He also mentioned we are about the only place where matching 401K funds
>>    are not vailable to the employee.

I think some SAVE changes are in the making.  I just got the annoucement
for the PLAN A interest rate and there was a comment that much of the
money was being moved to money market accounts in preparation for the
expected changes as more options are available in 1995.

Garry    

>>                      <<< Note 3374.2 by DELNI::DISMUKE >>>
>>
>>    He also mentioned we are about the only place where matching 401K funds
>>    are not vailable to the employee.

	Digital has a "defined benefit" retirement plan (the pension plan)
	-- a type of retirement plan that is increasingly uncommon. Most
	companies these days are going to matching 401(k) plans of some ilk
	instead of defined benefit plans.

	Which type is better depends on your age and the specifics of the
	plans themselves. But, I'd bet dollars to donuts that any matching
	funds for the SAVE plan will come only as a result of massive
	changes to Digital's retirement plans -- not as an additional
	benefit.

	Roy

    re: last few...
    
    y'er gonna have a might red face if you hold y'er breath 'till then!
    
    as for the SAVE changes... there HAVE to be some.  The law (can't quote
    it) requires a certain percentage of contributions be from us grunts as
    opposed to management.  
    
    so many of us have left (now *there's* a euphamism) that the
    percentages are bound to have become lopsided. 
    
    This usually results in the dollar amount which may be contributed by
    management being cut down.  
    
    we'll see what actually happens.
    
    t.

Re: .5

It's not "grunts" vs. "management" - it has to do with what your salary is.
A lot of us "grunts" were hit by the "temporary suspension" of contributions
when it happened in the past (a couple of times, at least).

Digital is indeed unusual in that it doesn't contribute ANYTHING to 
employees' 401K plans.

				Steve

>    I can find no reference to the "town meeting" in this notes file. Was
>    anything of note said there ?

  I guess it didn't make a big impression on a lot of people. He didn't say
anything earthshaking.
  I felt honored to be able to see and hear him in person. (I have seen him
in person several times before he became CEO, but few others here had seen
him in person before.)
  There were about 1000 people there. It was open to anyone who wanted to 
travel to LKG to attend, but didn't get much advance notice outside the Net-
works Business Unit.
  I thought Bob was quite frank about answering questions, more so than at the
first few DVN Q&A broadcasts he did.
  It was audiotaped but not videotaped.
  He said re the headquarters move to MSO, that it was not his idea to build
a special parking lot for the executives, a special entrances, etc. He didn't
say whether or not this will be done. He said he does not want a fancy office
and is pushing to hold down the costs of this renovation.

    
    	I did a quick survey thru some of my volumnous data files on the
    Fortunate 500 and Digital is the largest company in terms of both
    rank and sales with a no contribution 401(k). Nearly 50% of the
    above do not have a pension plan based on a percentage of salary like
    ours however. Of those 50%, contributions to 401(k) plans range from
    10% to 25% of employee contributions with all kinds of options (like
    different types of plans, $ contributions by plan, etc.).
    	Of the plans I was able to survey, Motorola's was superb. 25% of
    your contributions, no limitations, 13 different "buckets" to put
    money, unlimited movement with no time frames, etc. Of the others,
    we, unfortunately, are last. But we do have a pension plan that can
    only be described as generous in light of today's business environment.
    	My bet is that we will get "washed" if the real change is made to
    the SAVE program. Take from one hand, give to the other. Fortunately
    for all of us with over 5 years at DEC, we are protected by US law from
    a pension fund raid, so there may be a silver (did I hear gold) lining
    in this if changes are made.
    
    
    			the Greyhawk

I fear that like so many of our other benefits that when they "take from one
hand, give to the other" that we will end up with less in our hand.

Jim

    
    	Some people probably will. Those fully vested have inviolate rights
    to what is already in the pension fund. Any contribution to SAVE that
    is over the nominal in vogue today (read 10%) will be slightly behind.
    However, growth possibilities for those with over 15 years remaining
    until retirement are much, much better. Could easily push the yield to
    over 15% annually. And that is DOUBLE what the pension plan is earning.
    	Time will tell - but this could be the most interesting rumour of
    the fall campaign.
    
    			the Greyhawk

    
    I'm not a pension law expert, but Digital could buy out everyone's
    pension (is the pension fund overfunded?). They could then allow
    everyone to elect a new trustee for the money (if you take possession,
    there a mandatory 20% witholding), say your 401(k). In this way Digital
    could then do matching contributions. In this way, only people who are
    contributing to a 401(k) would cost Digital money. Right now, they are
    contributing for everybody and is doesn't come out of our paychecks.
    However, if they analyze how many people are 401(k) participants and
    this is cheaper than contributing to a pension plan for everybody, they
    may elect to go this route. In this way, they could increase/decrease
    the contribution percentage based on the health of the company. Right
    now with a defined benefit plan, they are on the hook. Maybe they want
    off the hook. Just a theory...

    Digital has a defined contribution plan.  It is over funded to the 
    point that Digital has not been required to put more money into it
    for several years.  
    
    If the company ends our current pension plan, the amount over funded 
    becomes non operating income and falls to the bottom line.  Digital cannot
    get at it without ending the current plan and buying everyone out. 
    After we all get the current value of our future benefits, Digital gets
    the rest. Of course, the interesting question is how to value
    future benefits.  Will it be real money or trinkets and beads?  The
    Federal government has lots of rules about ending pension plans, so
    we probably don't have a chance of figuring it out on our own.  
    
    Does anyone know how the present value of pension benefits are figured?
    
    Just the same, I'd rather hire my own money manager ( mutual fund )than 
    have a pension fund manager hired by Digital do it.  I'll have my best 
    interest in mind.  The pension fund manager's first goal is to keep the 
    Digital contract. My interests are secondary.
    
    If the pension plan is cancelled, I'd expect it to be replaced with a 
    defined contribution plan using the current 401K set up.  Its quick and
    simple.  Digital's contribution stays steady from year to year.  It 
    matches the way our competitors handle pensions and its another wood
    stake in the heart of Digital paternalism.  And most importantly,
    Digital books a bucket full of easy profits.  I assume we didn't do it
    last quarter, because the advantage on Wall St. would have been lost in
    the Q4 mega-loss.  We could see it happen in Q1 if the residual value
    of the pension fund is enough to offset any Q1 loss.
    
    Of course, all of the above applies only to vested employees and
    retirees in the U.S. part of the company.  Every country has their own
    set of rules.
    
    Oh-by-the-way.   A prior note mentioned a 20% withholding tax on a
    pension transfer.  It only applies if the beneficiary takes posession of
    the money.  If its transferred directly from one trustee (mutual fund)
    to another, there is no withholding tax.   
    
    Don't take the money yourself.  To avoid paying income tax and a 10% 
    penalty too, you'll have to make up the 20% from your household funds.  
    You won't get the money back from the Feds until you file your taxes 
    next year.    
    
    
    
    When Digital put the money into the pension plan, they 
    used pre-tax dollars.  If they take it out it is again taxable, but since 
    we have some $4 billion in tax losses, it's not much of a hit.  

    Interesting string!
    
    I remember calculating a while back how much I would walk away with,
    after being fully vested in the Digital retirement plan. The result
    was appallingly small, which is why I much prefer that Digital matches
    a 401K contribution.
    
    Would someone please submit an example of a "walk-away" retirement money, 
    using any gross salary as a sample, and 7 yr of service (ie fully
    vested employee)?
    
    BTW, what's the max 401K contribution (8%??). Is there a combination
    between the 401K and ESPP, something like the sum cannot exceed 12%??
    
    Thanks.
    
    

    There was a formula somewhere in here.  I just can't find it.  Pointers
    would be helpful...
    
    Jim Morton

The ESPP and 401K are independent (I'm in for both at 10%
and 8%, the maximums)

    re: .12
    
>>    Digital has a defined contribution plan.  It is over funded to the 
>>    point that Digital has not been required to put more money into it
>>    for several years.  
    
    I believe you meant to say "defined benefit plan".
    
    Dave

Perhaps the pension/401k topic deserves its own note...

Digital has a defined BENEFIT plan which is significantly different
from a defined CONTRIBUTION plan.   For example, I expect to get
3 times the pension from the last company I worked for (for only 5 years)
than I expect to get from my 15 years at Digital.  The reason is simple.
The defined benefit does not change with time, whereas the benefit derived
from a defined contribution does.  As another example, take two people who
work at Digital for 10 years for the same pay and one is now 35 and one
is 65.  If the older one retires he gets x dollars immediately.  If
the younger one leaves Digital, he gets the same x dollars BUT 30 years
later!

Periods of high inflation can decimate a defined benefit pension.

As another example,  if you work for Digital for 30 years you will
get something less than half of your AVERAGE pay as a pension (reduced
if you take your pension early, or want to leave something for your spouse...).
You can use your imagination (or a calculator) to determine if this
is something you would look forward to.  (To follow up on my earlier
example, it was not unusual for the folks that retired from my last company
to retire at MORE than their final salary!)

Federal law says that if you are "vested" you're entitled to something.
That something (at Digital) is defined by how long you worked at Digital,
and what your salary was (I believe it is roughly years * av salary * 1.5%).
It is independent of how well Digital "manages your pension money".

Federal law says that companies must (a) guarantee you will get a pension
after a reasonable period of time (5 years at Digital), and (b) guarantee
that there will be pension money available by either fully funding the
pension (Digital) or by buying federal insurance.  This is a VAST improvement
over earlier times when you would work for a company for 40 years, get
layed off at age 64 and get nothing, or have the company go bankrupt and
get nothing.

Regards,
Jean

    Back in '85 when I left the company, I was told that (after being full
    vested - 10 yrs) if my pension amount was less than some certain dollar
    value, I would receive a check, otherwise it would be held until my
    retirement.  Well, I received a check.
    
    Does anyone know if this is still a true statement and what that
    "certain dollar amount" might be today?
    
    -sandy
    

re: .18

It is either $3,000 or $3,500.

Bob

    Our HR rep said $3500 just a few weeks ago.
    
    ed, Rdb ...

>    Does anyone know if this is still a true statement and what that
>    "certain dollar amount" might be today?
    
$3,500

For official info, check out VTX BENEFITS_US
    

    According to my Exit Interview paperwork, you get a pension check if
    the
    pension is less than $3500
    
    
    
    Scott

    
    .... Okay - what are the parameters in place in order to
         walk-away with $3500? I know, it's only "reverse-
         engineering" if I have the formula!
    
    .... on the grand $3500 figure - this is why I much prefer that Digital 
         matches my 401K contribution - at least I have more options on how to
         grow the %$#% capital!