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Healthcare Provider Update: FedEx's healthcare provider is primarily Cigna, which partners with the company to offer health insurance solutions to its employees through a range of plans, including High Deductible Health Plans paired with Health Savings Accounts. In 2026, FedEx employees may face significant healthcare cost increases, mirroring a broader trend across the nation. With the expected elimination of enhanced ACA premium subsidies, some workers could see their out-of-pocket premium costs surge by over 75%. Coupled with the anticipated double-digit rate hikes from major insurers and rising medical expenses, the financial burden on employees is poised to escalate sharply, potentially impacting their overall healthcare affordability. Click here to learn more
For FedEx employees looking to stabilize their Retirement portfolio, U.S. Treasury bills can be a low-risk, highly liquid option that can help protect against market volatility and deliver steady returns over time, 'says Brent Wolf, of The Retirement Group, a division of Wealth Enhancement Group.
U.S. Treasury bills can be a safe, liquid investment - especially for FedEx employees looking to balance risk and security in their Retirement savings - says Kevin Landis, of The Retirement Group, a division of Wealth Enhancement Group.
In this article we will discuss:
1. Basic facts about US Treasury bills & their benefits.
2.Strengths & tradeoffs of investing in Treasury bills.
3.ow to buy Treasury bills and their tax considerations.
What Is It?
You need to know U.S. Treasury bills - their benefits - and how to use them in your financial planning as a FedEx employee. Those short-term debt securities are Treasury bills issued by the United States government to fund its operations. Typically T-bills mature one month to one year after issue. Like zero-coupon bonds, T-bills are sold at a discount and return to face value at maturity rather than paying periodic interest. The government is issuing T-bills starting at $100 and increasing by $100 increments.
Although the market is open to anyone, T-bills are typically traded by institutional investors like banks, insurance companies and mutual funds. Using mutual funds that invest in T-bills, like money market funds, is often easier for investors with moderate means. Some employees at FedEx might find that useful in deciding where to spend growth dollars and which of the following options best meets their needs.
Strengths
Safety
Because they are short-term and backed by all the faith and credit of the U.S. government, T-bills are among the safest investments. The short duration means they are among the first debt instruments to reflect changes in interest rates. Thus, T-bills are less prone to inflation and interest rate risk than longer-term investments. FedEx employees may want to consider T-bills when choosing an investment strategy that minimizes risk and puts asset security first.
Liquidity
Need cash? A bank or brokerage house will sell your T-bill on the secondary market (find a buyer) for you. This gives FedEx employees the right to recover their money and guarantees they will never be cashless.
State & Local Taxes Are Not Charged On Income.
These T-bills are especially handy for people with high state income taxes but low federal tax brackets. With their tax advantages, the after-tax return on T-bills may be greater than the after-tax return on equivalent taxable investments that pay the same interest rate.
Tradeoffs
Yield May Not Keep up with Inflation.
T-bills could pay more than passbook and money market accounts, but the yield may not keep pace with inflation.
Opportunity Cost
Riskier long-term investments than T-bills usually offer higher returns.
How to Buy T-Bills
Weekly or monthly Treasury bill auctions occur on the financial markets. Those T-bills can be purchased by FedEx employees for the average price of the winning competitive auction bids. FedEx employees wanting to buy T-bills can contact a brokerage agency. Or you could invest in a money market fund that invests in Treasury securities and include your investment in a pool of professionally managed assets. Yet some of the earnings would go towards covering the fund's management fee and other expenses.
Caution: Even if a money market mutual fund invests only in Treasury bills, its share price is not guaranteed or insured by the U.S. government like a T-bill is. A money market fund attempts to maintain a $1 per share value but you can lose money investing in one.
The Treasury also allows internet direct investments. First, open an account online at www.treasurydirect.gov . When that account is set up, you can use the website to buy securities and make charges to your bank account. The government does not issue a certificate of ownership when a FedEx employee purchases a T-bill directly from the government. Instead, book entries say you are the proprietor.
Tax Considerations
T-Bill Held to Maturity
Treasury bill interest is taxed as ordinary income. A taxpayer and FedEx employee with a T-bill to maturity recognizes no capital gain nor loss. In recovering interest income, proceeds above basis (the discounted amount) are taxed as ordinary income. Also known as interest income, the difference between the discounted purchase price and the face value at maturity is the difference between the discounted purchase price and must be reported when the T-bills mature. A cash-basis taxpayer could generate interest income deferral for one year by buying T-bills with maturity dates in the following year.
T-Bill Sold Before Maturity.
This is again treated as conventional income. When selling a T-bill before maturity, the difference between the purchase price and selling price may include some interest and some short-term capital gain or loss. You might want to think about this as a FedEx employee before you sell your T-bill.
Example(s): Assume John purchases $10,000 in T-bills at $9,760 100 days before maturity. Thirty days after that, he sells them for $9,850. And he has been taxed on a pro rata share of the discount as interest income while he held the securities: $72 = 30/100 x $10,000 - $9,760. The other $18 he got above the purchase price was a short-term capital gain.
Added Fact:
FedEx employees considering putting money into U.S. Treasury bills should consider benefits beyond safety and liquidity. Importantly, Treasury bills are low-correlated with the stock market and thus provide good diversification for retirement accounts. In a study published in October 2018 by the National Bureau of Economic Research (NBER), including Treasury bills in a retirement portfolio can boost its risk-adjusted return during periods of market volatility. This research finds Treasury bills may offer stability and downside protection to FedEx employees wanting to protect their wealth and generate steady retirement income.
Articles you may find interesting:
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
Added Analogy:
The investment in U.S. Treasury bills is like putting the foundation on your retirement house. Like a solid foundation gives your home stability and peace of mind, Treasury bills give FedEx employees a solid base for their retirement plans. These bills are your investment foundation - they give you security and liquidity. Just as a foundation supports the whole structure, Treasury bills anchor your retirement savings against market volatility. These provide a low-correlation asset that can weather economic storms with consistent returns. Like a well-designed foundation supports your dream house, including Treasury bills in your retirement strategy helps you achieve your long term financial goals - and you can enjoy a worry-free retirement.
Sources:
1. Investopedia Staff . 'Are Treasury Bills a Good Investment for Retirement Savings?' Investopedia , 1 Oct. 2014, https://www.investopedia.com/ask/answers/020515/are-treasury-bills-good-investment-retirement-savings.asp .
2. Investopedia Staff . 'How Are Treasury Bills (T-Bills) Taxed?' Investopedia , 30 Jan. 2015, https://www.investopedia.com/ask/answers/013015/how-are-treasury-bills-taxed.asp .
3. Experian . 'Are Treasury Bonds a Good Investment for Retirement?' Experian , 1 Nov. 2021, https://www.experian.com/blogs/ask-experian/are-treasury-bonds-good-investment-for-retirement .
4. Erin Bendig . 'Why Treasury Bills are a Good Bet.' Kiplinger , 17 Sept. 2024, https://www.kiplinger.com/personal-finance/why-treasury-bills-are-a-good-bet .
5. U.S. Department of the Treasury . 'Treasury Bills.' TreasuryDirect , https://treasurydirect.gov/marketable-securities/treasury-bills/ .
What are the implications of the Funding Target Attainment Percentage for FedEx Corporation employees, and how does it impact the security of the pension benefits offered by FedEx Corporation? This question seeks to explore the nuances of the funding target attainment percentage as reported in the annual funding notice, examining how this metric not only reflects the financial health of FedEx Corporation's pension plan but also how it affects employee confidence in future benefit payments and retirement planning.
Funding Target Attainment Percentage: The Funding Target Attainment Percentage for FedEx Corporation indicates the degree to which the pension plan is funded. A percentage of 101.33% for 2022 suggests that the plan has sufficient assets to cover its liabilities, providing security for employees' pension benefits. This high percentage likely increases employee confidence in the stability and reliability of their future pension payouts, essential for long-term retirement planning.
How does the merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan influence the benefits currently available to FedEx Corporation employees? This question aims to delve into the practical changes that may arise due to this merger, assessing whether it aligns with employee expectations regarding their pension benefits and how the transition process is managed by FedEx Corporation.
Merger of Pension Plans: The merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan appears to have been strategically managed to maintain benefit stability. Despite increasing liabilities by 5.3%, the merger was structured to ensure no negative impact on the benefit amounts payable to participants from either plan, preserving the expected pension benefits for all affected FedEx Corporation employees.
In terms of investment strategies, what measures does FedEx Corporation implement to ensure that its pension plan investments align with the long-term liabilities expected to be paid out to retirees? This question encourages an exploration of the investment policies in place, examining the asset allocations and risk management strategies that FedEx Corporation employs to ensure sustainable funding for its pension obligations, which could potentially include detailed analyses of stocks, debts, and alternative investments.
Investment Strategies: FedEx Corporation employs a diversified investment strategy across equities, fixed income, and alternative investments, aiming to meet long-term pension liabilities. This approach, which includes both active management strategies and the limited use of derivatives, is designed to generate returns that exceed market indices, thus ensuring adequate funding of pension obligations.
What options do employees of FedEx Corporation have for accessing their pension plan statements, and how frequently are these statements generated? The focus here is to understand the communication strategies employed by FedEx Corporation regarding pension benefit statements, including technological access points and the importance of these documents for employee financial planning.
Pension Plan Statements: FedEx Corporation provides annual pension plan statements through their Retirement Service Center, available electronically each fall. Employees can access their statements online or request them if notifications are not received, ensuring transparency and aiding in personal financial planning.
How are contributions to the FedEx Corporation Employees’ Pension Plan determined, and what role do excess contributions play in the plan's overall funding strategy? This question aims to educate employees about how the company balances mandatory contribution levels with potential excess contributions, exploring how these factors interact to influence the plan's solvency and employee benefits.
Contributions to the Pension Plan: Contributions to the FedEx Corporation Employees' Pension Plan are calculated to meet at least the minimum legal requirement and potentially include voluntary excess contributions. These excess contributions can help manage the plan's funding level and ensure its solvency, benefiting overall pension security for employees.
What types of benefits are guaranteed under the Pension Benefit Guaranty Corporation (PBGC) for FedEx Corporation employees, and what limitations exist that employees should be aware of? By focusing on the guaranteed benefits, this question prompts a discussion on the security of specific benefits provided by FedEx Corporation and highlights limitations, allowing employees to understand their rights fully.
PBGC Guarantee: The Pension Benefit Guaranty Corporation guarantees certain types of benefits for FedEx Corporation employees, such as pension benefits at normal retirement age and most early retirement benefits. However, there are limitations, such as exclusions for benefits without vested rights and recently increased benefits, which employees should be aware of to fully understand their pension security.
In what ways does the FedEx Corporation plan to adjust its pension funding strategy in light of changing federal laws that impact pension obligations? Employees are encouraged to consider how legislative changes influence corporate policies surrounding retirement benefits and the proactive strategies FedEx Corporation might take to remain compliant while ensuring the security of employee pensions.
Adjustments to Funding Strategy: FedEx Corporation is likely to adjust its pension funding strategy in response to legislative changes affecting pension obligations, such as those introduced by recent acts adjusting how pension liabilities are calculated. This proactive approach aims to ensure compliance with new laws while continuing to secure the financial health of the pension plan.
What are the steps that FedEx Corporation employees must take if they are considering retirement, particularly in how to navigate the pension plan and gain access to their benefits? This question aims to provide clarity on the retirement process, ensuring that employees are equipped with the necessary information regarding required documentation, timelines, and points of contact within FedEx Corporation.
Steps for Retirement Planning: Employees considering retirement should contact the FedEx Retirement Service Center to navigate their pension plan benefits. This process involves understanding necessary documentation, timelines, and available support, facilitating a smooth transition into retirement.
How does FedEx Corporation plan to manage potential funding shortfalls in the pension plan, and what mechanisms are in place for notifying plan participants should such an event occur? Employees would need to understand the proactive measures put in place by FedEx Corporation to address funding-related challenges while also knowing what this means for their benefits.
Managing Funding Shortfalls: In the event of potential funding shortfalls, FedEx Corporation has policies in place to manage such situations, including strategic contributions to mitigate shortfalls. The company maintains transparency with plan participants about funding levels and any significant changes affecting the pension plan.
For those seeking more information about their pensions and retirement options, how can FedEx Corporation employees contact relevant departments, and what resources are available for assistance? This question provides an opportunity for employees to familiarize themselves with contact points such as the FedEx Retirement Service Center, emphasizing the importance of open communication channels for addressing inquiries related to their pensions. Feel free to consult the provided document for more in-depth exploration of these topics.
Contacting for Pension Information: FedEx Corporation employees seeking more information about their pensions or retirement options can contact the FedEx Retirement Service Center. This center provides essential resources and support, ensuring employees have access to all necessary information regarding their retirement planning.
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