This is both my response to an invitation by James Johnson and his acknowledgement of receipt
From: "Johnson, James C" <james.c.johnson@boeing.com>
To: "'Donald Shuper'" <xxxx>
Subject: RE: Response re Understated Pension Benefits
Date: Tue, 4 Dec 2001 03:17:23 -0800
This will acknowledge receipt of you recent email
James C. Johnson
Vice President, Corporate Secretary
and Assistant General Counsel
-----Original Message-----
From: Donald Shuper [mailto:xxxx]
Sent: Monday, December 03, 2001 11:59 PM
To: james.c.johnson@boeing.com
Cc: Dagnon, James B; barbara.h.jetton@boeing.com; Norman Bartlett
(E-mail)
Subject: Response re Understated Pension Benefits
ACKNOWLEDGEMENT OF RECEIPT OF THIS MESSAGE VIA E-MAIL WOULD BE APPRECIATED.
TO : James C Johnson, Corporate Secretary and Assistant General
Counsel
CC: James Dagnon , Plan Administrator [Chairman of the
Employee Benefits Committee ], et. al.
Refs : 1) My E-mails of June 28, October 19, and October 31 to Jim Dagnon, et.al. as Chairman of the Employee Benefits Committee [ Plan Administrator ] 2) My Shareholder proposal submitted Nov 14 by FAX and e-mail to the Corporate Secretary [ J. Johnson ] 3) FAX of November 16 from J. Johnson inviting me to provide more information about" understated pension benefits on a yearly basis." [ from my October 19th e-mail ]
Dear Mr. Johnson
This e-mail is in response to your FAX of 16 November, apparently on behalf of the Employee Benefits Committee, which stated your [ their ?] position on the subjects of voting by State Street and my request for a copy of an ' analysis" of pension plan benefit comparisons between the Heritage Plans and the cash-balance plan [PVP].
I would appreciate clarification as to your position as to Plan Administrator.
1) Are you responding as a member of the committee [ Plan Administrator ] or at their direction ?
2) Who are the current members of the Committee ? 3) Is it possible to e-mail the " Plan Administrator " without first knowing who are members?
I ask the third question as it is easier for myself, and I'm sure most others, to use e-mail, especially if some form of automated acknowledgement such as used by congresspersons were to be provided, and in view of the anthrax problem. I can also accept FAX responses, but they are more difficult to transcribe for significant communications.
I wish to make it clear that my request for a copy of the "analysis" and my comments about understated pension benefit calculations are NOT a request for benefit recalculation. I also note that while I believe your reasons for not providing voting information from State Street or an "analysis " are not clearly supported by court action or administrative decisions, the matter at this time is moot as it relates to my shareholder proposal submitted on November 14, 2001.
You invited me to "to provide more information regarding your unsupported assertion that you have 'reason to believe that virtually all benefit calculations for heritage Boeing employees since 1989-1990 have understated vested pension benefits on a yearly basis." I note the above quote was from my e-mail of October 19, 2001 and not from my October 31 e-mail.
Note that in my proposal I stated only "We believe Boeing has periodically understated the vested benefits due employees during the last decade . . . ."
I believe the following explanation will adequately support
my assertion(s) as described in my e-mails and specifically support
my comments in my proposal.
The heritage plan since 1989 has used an " alternate benefit
formula " which is the most common formula applied to employees
and potential retirees. It is fully described in the SPD. Certain
multiplier factors have changed over the years, but the formula
has always used a value called "Covered Compensation "
[CC], which is the 35 year moving average of the Social Security
wage base. Every year this base amount increases approximately
1500 to 1700 dollars.
Since the CC is subtracted from a "final average earnings " value to determine the amount known as 'excess benefit ' the result is that the benefit calculated as of January every year is almost always less then the benefit calculated for a month earlier [December].
Until 1998-99, Boeing provided an annual benefit statement, describing the Plan calculations and the 'current vested value" as of January 1 for that year. Because of the annual increase in the CC value, the vested values shown were always less than the month before, and thus understated. Comparison calculations made in accordance with the described formula for each month over several years, when compared to the annual benefit statement and plotted, would show this effect clearly and resembles a 'sawtooth". Additionally, certain 'productivity" payments also influenced the disparity between actual vested benefits and those published.
Therefore, the period mentioned in my shareholder proposal is every year the benefit statements were published and/or every time a request is made for calculation of benefits as of January. I'm sure many of the committee members are aware of this characteristic, and will be able to easily verify it.
Should the above short explanation not suffice to provide background support of
the statement in my proposal, I will be happy to provide a more
detailed explanation with the understanding and agreement that
it will not preempt any further queries by myself or others or
impact my rights as a plan participant.
Thank you for your attention in this matter.
Donald W Shuper
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Don Shuper xxxx
Shareholder proposal http://home.att.net/~dprops/welcome.html
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