Conference 7.286::digital

        If the tax law has changed as you suggest, then unless Digital
        was explicitly exempted ("grandfathered"), Digital will have
        to change.  It seems unlikely to me that Digital would have
        been exempted from such a law.
        
        I tried calling Corporate Compensation & Benefits to find out
        whether they are aware of changes (they'd probably know, after
        all), but after being forwarded a couple of times, I got put
        on "permanent hold".
        
        When a personnel policy (such as vesting in the retirement plan)
        changes, the Personnel Policies and Procedures manual gets
        updated.  I'll keep an eye out for the update. 
        
        Tom

    Re .0 (John):
    
    Just to put this nin perspective:
    
    It once was that one had to work ten years for Digital before being
    partly vested and one became fully vested after fifteen years.
    
    Cognizant of the fact my fifteenth year anniversary was at hand,
    Digital at about that date lopped 5 years off the vestment
    requirements. 
    
    Everything's relative, you see. ;-)
    
    Steve Kallis, Jr.

Follow-up to .2:

And now that I've just reached the 10-year mark, there's talk
of lopping even more years off the vesting requirements.
Now, speaking as a strictly unbiased observer, the 15-year
bit was too stiff, but 10 years sounds about right (:-)...

    Yes, Digital will also have to make a change to the vesting rules
    for Pension.  I believe something about it was sent out as a home
    mailing.  
    
    Digital will have the choice of 100% vesting after 5 years of
    service or, as previously mentioned, stagered vesting of 20%
    after 3 years of service....until 100% vested -at 7 years of service.
    A decision has not yet been made and the requirement is that
    each corporation make the decision by 1989.
    
    I believe the mailing that I saw said that Digital is LEANING
    toward the 7 year vesting plan, but no definite decision was
    yet made.
    
    Pension is a benefit to employees, so there will most likely be
    a BENEFITS UPDATE BULLETIN mailed out to each employees home.
    That is usually the communication route utilized for benefit
    changes.
    
    cj

 Suppose someone works for one company for 7 years and is fully vested and then
works for DEC for 7 years. Does that person get two pensions?

 DEC does say that "career planning is the employees responsibility"!

 -Tom

    It is quite possible to legitmately draw pensions from two
    different jobs. My father gets one penion from his former
    teaching position and a second from his job in industry. He
    or his company paid money into both programs and he is entitled
    to both. However, my guess is that you could get more money
    in the case mentioned inf .5 if you worked 14 years for one
    company and had the benefits of salary increases. 
    
    Bonnie

        Bonnie's answer is basically correct.  Often, when you've got
        partial vesting and you leave the company, you're offered a choice
        of a lump-sum payment or eventual pension payments. Once you're
        fully vested, you get 100% of the pension when the time comes, but
        the amount of the pension payments often depends on factors such
        as total number of years worked, total salary earned, total salary
        in last three years before retirement, or other things (like the
        phase of the moon).  You have to read the pension plan to find
        out just what the rule is (or rules are).
        
        If it reaches a point where continuing to work in the current job
        doesn't have any further effect on your eventual pension, and you
        really want to try something else, you probably should go do it.
        After all, you've already got the pension locked in.  This happens
        a lot with "career" military people; I believe the cutting point
        is at about 20 years of service (which, if you joined up at age
        21, makes you 41 years old, with enough time to get fully vested
        in a job in industry). 
        
        I haven't read DEC's pension plan carefully enough to be able to
        say if that ever happens at DEC. 
        
        Tom

DEC's plan is simple - it's a straight percentage of the your average salary
while at DEC. Therefore, as long as you continue to work for DEC, your pension
amount increases.

re: .-2

	Considering that a job change usually gives you a bigger raise than
	staying on, it's probably worth your while to change jobs as soon as
	you're fully vested...given pension plans of DEC's type.

eric

    
    
        I started with the company in 1979 at the age of 17. Since vesting
       doesn't start till your 25 will I be vested for only the time
       since I was 25 or will I be fully vested next year on my 10'th
       anniversary at dec.
    
                               I'd like to retire at 27....
    
                                         R~C

    The last time I read the stuff it was that you started accumulating
    vesting years from day 1, however pension funds would not start
    until you were age 25+.  Check with your PSA for the current policy.

    This may have been discussed before and I've just overlooked it,
    but could someone please explain to me why pension funds don't begin
    accumulating until age 25?  
    
    Pointers welcome.
    
-Andy, who started w/DEC at age 21.

re: 550.11 -< Isn't this a form of prejudice? >-

>    This may have been discussed before and I've just overlooked it,
>    but could someone please explain to me why pension funds don't begin
>    accumulating until age 25?  

I don't remember seeing a discussion either, but the answer is simple.  The 
current U.S. federal laws regulating pensions don't require companies to 
begin accumulating until age 25, and Digital currently sees no reason to go 
beyond these requirements.

>-Andy, who started w/DEC at age 21.

Ray_who_also_started_at_age_21

    Re: 550.11 & .12:
    
    Pardon my confusion, but, let me see if I have this straight:
    
    Let's use a hypothetical situation:  I started at DEC ten years
    ago when I was 20.  Now, under the current 10-year-fully-vested
    philosophy, I would be fully vested at age 30.  However, if I don't
    start 'vesting' [??] 'til age 25, that means I'd have to be at DEC
    'til I'm 35 before being fully vested?
    
    Is that correct? 
    
    And I *know* I should talk with my PSA; however, I'm just curious.
    I have no vital need for this information.  
    
    Thanks!
    

re: 550.13
    
>    Let's use a hypothetical situation:  I started at DEC ten years
>    ago when I was 20.  Now, under the current 10-year-fully-vested
>    philosophy, I would be fully vested at age 30.  However, if I don't
>    start 'vesting' [??] 'til age 25, that means I'd have to be at DEC
>    'til I'm 35 before being fully vested?
>    Is that correct? 

Not quite.  You started when you were 20.  When you were 25, you were 50% 
"vested", which means you are entitled to 50% of your accrued pension 
benefit upon retirement.  Since you haven't accrued any pension benefit 
(because you don't start accruing until you're 25), if you left DEC right
then, you would be entitled to 50% of nothing. 

Since you were then 25, you began to accrue pension benefit.  You are now 
30.  You are now 100% "vested", which means you are entitled to 100% of 
your accrued pension benefit upon retirement.

The difference between you and a person who started the same time you did, 
but was five years older, is that that person has five more years of 
accrued pension benefit than you do.  Note that you both are entitled to 
100% of it upon retirement if you both left today.

An interesting difference between you and that five-year-older person is 
that if that person quit DEC 5 years ago, that person would have been 
entitled to 50% of five years' worth of accrued pension benefits upon 
retirement, where, as noted above, if you had left, you'd be entitled to 
nothing.

>    And I *know* I should talk with my PSA; however, I'm just curious.
>    I have no vital need for this information.  

This is only my understanding.  Go to your PSA for an official answer.

Ray

    Using the previous example and assuming similar salaries for both,
    the person who accrued 10 years worth of pension benefits may get
    his pension at his retirement age where as you may get a check from
    DEC.  When terminating if you have accumulated less than $3000 (or
    is it $3500) you will get a check in the mail.  My advice to
    anyone thinking of terminating would be to find out what your
    accumulated pension benefit is.  If you really wanted your pension
    at retirement it would be a shame to have missed by a few dollars.

    
    It is now 1989.  Has anyone heard anything official on accelerated
    vesting?

    re: .16
    
    Last I heard, the new vesting rules will go into effect at the start
    of the fiscal year (this summer).
    
    I know of no official statement regarding the nature of the new
    rules at this time.
    
    -- Russ

The text below is copied from a message I received today.  The message 
originally came from someone in the Mill's corporate benefits group.  


On January 23, the Board of Directors approved the recommendation for a 
five year cliff vesting schedule.  This will be effective on July 1, 
1989.  Communications of this change will take place over the next 
couple of months.  The schedule of vesting is:


     		Current		New

Year  1-4	No Vesting	
Year  5		50%		100%
Year  6		60%		
Year  7		70%
Year  8		80%
Year  9		90%
Year 10		100%

This is a mandated change.  The effect is to accelerate from our current 
10 year graduated vesting to a 5 year cliff vesting schedule.

   What are the latest age requirements on this?

   I'm 22, but my five years are coming up pretty soon...


					-mjg

    There are no age requirements on vesting, the best I understand
    it.
    
    But there are requirements as to when the money becomes available
    to you.
    
    Jim
    

With the new 5-year vesting scheme (as described in .18), it's obviously
a boon to those who leave DEC with 5-9 years of experience; however, for
those of us (like myself) with over 10 years at DEC, it doesn't bring
any benefits, and I would think might even mean a reduction in benefits!

I know the plan doesn't say anything about reducing anyone's benefits.
However, if the pension "pie" stays the same, but now certain people
who formerly had a smaller "slice" of the pie (<100% vesting) now have
a bigger slice, how can that not mean that those who formerly enjoyed
the "biggest" slice will get their benefit scaled back at least a little?

Does DEC now plan to contribute more to the pension fund to accommodate
the fund's greater liability (i.e., the amount it must pay to beneficiaries)?
Or are we "old-timers" supposed to just hope that the fund's trustees are
skillful or lucky enough in their investments to have enough money to pay
all retirees their "full" benefits.  (What are other companies doing about
this, if anything?)

    re: .21
    
    I'm not sure how the change could cause a reduction in benefits
    for people with >10 years service.  I don't know the specifics about
    our plan, but most plans pay you some percentage of your average
    salary over some number of years prior to retirement.  About the
    only way you could get a reduction in benefits would be if Digital
    decided to reduce the percentage you would receive at retirement.
    I don't know if there are any legal restrictions on doing that or
    not.
    
    One of the reasons that the effective date of the law was delayed
    was to give employers time to determine the cost of the new rules
    and to make provisions for it in their funding.
    
    One of the reasons for the law was to prevent companies from
    implementing plans such as used by some of the regional phone
    companies.  You get 0% vesting in years 0 thru 9, and then 100%
    at year 10.  Companies that have traditionally high employee turnover
    are the ones that tend to have these kinds of vesting schedules.
    It keeps their pension costs low.  It is also amazing how many people
    get terminated in their 9th year of service at companies that have
    these types of plans.
    
    Bob

        RE: .21 -- if you really want an answer, you might consider
        mailing a copy of your note to the people in charge of the
        pension plans.  I suspect it's someone who reports to the
        Corporate Compensation and Benefits Manager in CFO2, so try
        calling DTN 251-1014.  Also, if you read "Your Benefits Book"
        you'll see (in section 7) a wealth of information on the pension
        plan, including a commitment to communicate any changes in
        a timely manner.  (Of course, I personally have seen nothing
        so far in the way of formal communication, but that doesn't
        really surprise me.  I trust someone is working on it as we
        write, and that it will be formally communicated in due time.)
        
        Tom

As a follow-up to my note in .21:  I exchanged mail messages and
talked with someone in Corporate Compensation and Benefits. He was
quite helpful and informative. I'll just summarize the important points
as far as my concerns go:

1. My own benefit will be the same as it would have been under the
   old vesting plan.
2. The pension fund will owe more money to beneficiaries with 5-9 years
   experience as a result of the vesting changes.
3. DEC will pay more into the fund to cover the increased liability. 

Thus, the only possible "loss" we 10+ year DECcies could incur would
be remote and indirect. That is, because DEC will have to contribute
more to the pension fund, it will undoubtedly have some impact on the
corporate "bottom line" (earnings), which might cause DEC to try to
cut some costs, which might mean smaller raises for some people someday...
(The preceding are my own inferences, not necessarily those of anyone in
Personnel or any other department.)

Incldentally, the person I spoke with encouraged people with questions
about the pension plan changes to ask your PSA. They talk with PSAs and
hold training sessions; and if PSAs know your questions, they can pass
them along and have the answers shared by PSAs all over the company.

    July 1, 1989 is about to happen. I haven't seen any more on this topic.
    Has anyone else heard what is/has happened re:this "cliff vesting"?
    
    

    Cliff vesting:
    
    Just received a mngt memo on that; all employees will be mailed a
    detailed brochure next week on the changes to pension plans.  From
    what I can tell, all those now between 50% and 90% vesting will
    be 100% vested July 2nd.  FY90 begins only on July 2nd.
    
    And, 100% vesting begins after five years with DEC.  So, everyone
    essentially will go from 0% to 100% vesting overnight, at their
    respective anniversaries.  Those already x% vested will now go to
    100%.

    Looks easy as falling off a cliff.
    
    ......... Suchindran