by trvr815
Hey guys, new to UP and railroad as a whole.
Since my short 5 months here, I have been trying to learn as much as I can. Specifically, I wanted to talk about the 401K and railroad retirement and how the two interact.
Our managers and supervisors have COMPANY CONTRIBUTED 401K match. We, as agreement, do not. The rumor is that we may not get a raise in our next contract but get the same type of 4o1K company match such as supervisors and managers have now. Here is the problem with that.
The 401K company matching part (i.e. .50 on the $ up to 6%) is coming out of our tier 2 at a dollar for dollar lose. Another way of saying this is the company is giving one money to invest in their 401K. But when time to collect on your RRR annuity the company matching part will be subtracted from your tier 2 dollar for dollar. No gain!!
Doesn't seem to make much sense right? Well, the managers pensions work in a lot of the same way.
Now if you contribute to your Vanguard or any other 401K currently with no company match this will not affect your RRR annuity (only company contribution amounts).
Am I missing anything? What are your experiences - knowledge on this subject ect. Are we borrowing the inital $ the company gives us to have it grown in ones 401K and then have our RRR reduced just at the inital dollars given by the company?
Since my short 5 months here, I have been trying to learn as much as I can. Specifically, I wanted to talk about the 401K and railroad retirement and how the two interact.
Our managers and supervisors have COMPANY CONTRIBUTED 401K match. We, as agreement, do not. The rumor is that we may not get a raise in our next contract but get the same type of 4o1K company match such as supervisors and managers have now. Here is the problem with that.
The 401K company matching part (i.e. .50 on the $ up to 6%) is coming out of our tier 2 at a dollar for dollar lose. Another way of saying this is the company is giving one money to invest in their 401K. But when time to collect on your RRR annuity the company matching part will be subtracted from your tier 2 dollar for dollar. No gain!!
Doesn't seem to make much sense right? Well, the managers pensions work in a lot of the same way.
Now if you contribute to your Vanguard or any other 401K currently with no company match this will not affect your RRR annuity (only company contribution amounts).
Am I missing anything? What are your experiences - knowledge on this subject ect. Are we borrowing the inital $ the company gives us to have it grown in ones 401K and then have our RRR reduced just at the inital dollars given by the company?