New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

USG Corporation Employees: Is the Russia-Ukraine War a Threat to the Global Economy?

'The global disruptions as a result of the Russia-Ukraine war will impact supply chains, energy prices, and inflation, and this will affect USG Corporation employees and retirees; it is important to stay informed and readjust your financial planning accordingly,' said Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'USG Corporation employees and retirees should be aware of the continuing impacts of the war in the food and energy markets and how it may affect their long-term retirement planning and budgeting,” advised Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. The effects of sanctions on Russia and its economy.

2. How supply shocks, especially in energy and food, affect global markets.

3. The consequences of the events on inflation and economic growth, and the lower-income populations in the world.

Just before Russia invaded Ukraine, most people thought that the economic ties that had been created through globalization would actually help to promote peace. But the war is putting that to the test and, at the same time, exposing the weaknesses in the supply chains that have been extended to the farthest corners of the world – weaknesses that had already been revealed by the pandemic and the recovery.

The United States, European Union (EU), United Kingdom (UK), and other members of their alliances are using financial sanctions to put massive pressure on Russia and its leaders to stop the war after the brutal invasion of Ukraine. But that is likely to come at a great cost to the world economy. This is something that concerns USG Corporation employees, retirees, and consumers all over the world.

Punishing Russia:

For the first time in history, Western nations have acted quickly to exclude Russia from the global financial system and trade. Some of Russia’s biggest banks have been kicked out of SWIFT, the system for international bank transfers. Germany has put on hold the launching of a new gas pipeline from Russia while the United States and the United Kingdom have clamped down on Russian oil imports. Hundreds of Western companies have closed shop or exited Russia, the world’s 11th largest economy, either to comply with sanctions or in protest of the war. Some of the rich oligarchs said to be close to the Kremlin have also had their assets frozen or seized.

The effects of the sanctions are clear in Russia where the central bank had to increase its policy rate to 20% and the Russian economy is expected to shrink as much as 10%. Although Russia was recently an integral part of the global community, cutting it off from supply chains and technology could be disastrous for Russian businesses and consumers. It is still unclear whether China will come in to fill the gap left by the West.

Supply Shocks:

Russia is a major supplier of food, energy, metals, and other raw materials, and prices of these commodities are often determined by the law of supply and demand in the global market. Therefore, price increases of some high-demand products have been observed due to supply shocks resulting from the war and sanctions. Russia is a major energy producer and exporter thus the crude oil and natural gas prices have risen since the conflict started mainly due to concerns on supply. The European Union gets about 40% of its natural gas and 25% of its oil from Russia. Thus, any reduction in energy exports from Russia would be impossible to replace and may lead to more shortages in the global market.

Russia is also a leading producer of metals like palladium (used in catalytic converters), platinum, aluminum, copper, and nickel (used in batteries). In addition, the world’s supply of neon gas used in making semiconductors was supplied by Ukrainian companies that have since been closed due to the conflict. Lack of sufficient production of neon elsewhere, shortages are likely to worsen the chip shortage that has been slowing down the generation of new cars, computers, phones, and other electronic products.

Russia and Ukraine are the leading suppliers of wheat to the world market, supplying 30%, corn supplying 17%, barley supplying 32%, and supplying sunflower seed oil 75%. Due to financial sanctions, Russia has been unable to export food, and the war has hindered Ukraine from exporting food. Russia is the world’s largest producer of fertilizer, which accounts for 15% of the global production. Thus, crop production in other parts of the world may be affected by a lack of fertilizer that has increased in price owing to the fact that natural gas is also a source of fertilizer.

Consequently, USG Corporation employees, retirees, and consumers across the globe will be able to pay more for their groceries. According to the United Nations, food prices, which are already at a record high, are expected to rise further by 22% due to the war. Egypt and other countries in North Africa, Middle East, and Asia are heavily dependent on grains from Russia and Ukraine. This results in food scarcity and high prices will lead to a significant rise in hunger globally.

Ripple Effects:

Despite the fact that Russia and Ukraine make up only about 2% of the world’s GDP, the war and the resulting high energy prices and supply shocks may affect the global economy, which has not yet recovered from the COVID-19 pandemic. The OECD predicts that in the first year of the war the world economic growth will be 1.1% lower and the prices will be 2.5% higher than without the invasion. The effects will be most pronounced in those countries that have closer trade and financial links with Russia and Ukraine. Accordingly, people with lower incomes will be affected more because food and energy are a higher portion of their spending.

The same OECD report points out that inflation is expected to rise by 2% in the euro area and 1.4% in the United States more than it would have without the war. The OECD expects that 2022 year's economic growth will be lowered by about 1.4% in the euro area and 0.9% in the United States. The humanitarian crisis and the economic disaster in Ukraine that has been caused by Russian aggression are almost impossible to quantify. More than 4 million people have been forced to flee Ukraine and many more could do so. Without external assistance, the burden of accepting the massive refugee influx is likely to place a strain on the financial resources of countries such as Hungary, Moldova, Poland, Romania, and Slovakia.

Featured Video

Articles you may find interesting:

In the American continent, however, Europe has closer ties to the Russia-Ukraine conflict, but both economies have seen their inflation rates climb to historical highs. In the coming months, the world’s key central banks will have the difficult task of hiking interest rates high enough to combat inflation without sparking a recession. There could also be long-term effects, including a reconfiguration of global supply chains and less integrated financial systems — something that USG Corporation employees and retirees should know about.

Sources:

1. Wikipedia contributors. 'Economic Impact of the Russian Invasion of Ukraine.' Wikipedia , 17 Feb. 2025, https://en.wikipedia.org/wiki/Economic_impact_of_the_Russian_invasion_of_Ukraine . Accessed 17 Feb. 2025.

2. 'Why's the War in Ukraine Still Impacting My Pension?' PensionBee , 24 May 2023, https://www.pensionbee.com/uk/blog/2023/may/ukraine-impact-on-pensions . Accessed 17 Feb. 2025.

3. 'Ukraine War Impacts Still Felt in Energy Markets, Pension Fund Returns.' Pensions & Investments , 24 Feb. 2023, https://www.pionline.com/markets/ukraine-war-impacts-still-felt-energy-markets-pension-fund-returns . Accessed 17 Feb. 2025.

4. 'Russia's Economic Gamble: The Hidden Costs of War-Driven Growth.' Carnegie Endowment for International Peace , 15 Dec. 2024, https://carnegieendowment.org/russia-eurasia/politika/2024/12/russia-economy-difficulties . Accessed 17 Feb. 2025.

5. 'Russia's Putin Announces 10% Hike in Pensions, Minimum Wage.' Reuters , 25 May 2022, https://www.reuters.com/world/europe/russias-putin-announces-10-hike-pensions-minimum-wage-2022-05-25 . Accessed 17 Feb. 2025.

How does the retirement plan structure at USG Corporation impact both final average earnings participants and cash balance participants, especially regarding their eligibility and benefits accrued over time? In what ways does the differentiation between these two categories influence the retirement outcomes for employees of USG Corporation?

Retirement Plan Structure: USG Corporation's retirement plan differentiates between Final Average Earnings Participants and Cash Balance Participants. Final Average Earnings participants, who joined before January 1, 2011, accrue benefits based on their final average earnings and years of service, which can result in higher benefits for longer-serving employees. Cash Balance participants, who joined after January 1, 2011, have their benefits calculated based on a cash balance account, which grows with contributions and interest credits. These differences affect retirement outcomes, as Final Average Earnings participants may see higher pension payments if they have longer service or higher wages, while Cash Balance participants have more predictable but potentially lower benefits based on their account balance(USG Corporation_Retirem…).

USG Corporation's Retirement Plan allows for different age-specific rules regarding early retirement. How do the "Rule of 90" and "Rule of 82" affect the financial planning of employees considering an early retirement option, and what should they consider regarding their long-term financial security?

Rule of 90 and Rule of 82: The "Rule of 90" allows employees to retire early without a reduction in benefits if their age plus years of service total 90, provided they retire at or after age 62. The "Rule of 82" permits early retirement with reduced benefits for those whose age and years of service total 82. Employees planning early retirement must consider these rules as they directly affect the amount of benefits they receive, making it important to assess how long-term financial security will be impacted, especially if they retire before age 62(USG Corporation_Retirem…).

Could you elaborate on the process through which employees at USG Corporation can change their beneficiaries within the retirement plan? What steps need to be taken, and what are the implications of these changes on the benefits received upon the participant's death?

Changing Beneficiaries: To change beneficiaries, USG Corporation employees must contact Your Benefits Resources™, where they can designate a primary and contingent beneficiary. If married, the spouse must provide notarized consent to name a different primary beneficiary. The process involves completing a form, and any changes affect who receives benefits upon the participant's death. Failing to update the beneficiary could result in benefits being paid to unintended individuals(USG Corporation_Retirem…).

As part of the retirement process at USG Corporation, how are pensionable earnings calculated? What factors are included in this determination, and how might they vary among different employees based on their roles within the organization?

Pensionable Earnings Calculation: Pensionable earnings at USG Corporation include regular pay, shift differentials, and bonuses but exclude items like nonqualified deferred compensation, severance, and stock awards. These earnings are used to calculate benefits based on formulas that take into account an employee’s service years and earnings over the 36 highest consecutive months of the last 15 years of participation(USG Corporation_Retirem…).

How does the automatic enrollment in the USG Corporation Retirement Plan work, and what options do employees have if they initially chose not to participate? What implications might this have for their retirement savings strategy?

Automatic Enrollment and Opting In: Employees at USG Corporation are automatically enrolled in the retirement plan unless they choose to opt out. If employees decide not to participate initially, they can enroll later by contacting Your Benefits Resources™. Failure to participate from the start could result in lower retirement savings due to fewer years of contributions(USG Corporation_Retirem…).

In the context of USG Corporation, what are the potential tax consequences for employees withdrawing their retirement benefits, especially regarding the mandatory withholdings? How might employees effectively manage these tax liabilities when planning for retirement?

Tax Consequences of Withdrawals: Employees withdrawing their retirement benefits from USG Corporation will face mandatory federal income tax withholdings, typically 20% for lump sum distributions, unless the distribution is rolled over into an IRA. Employees must plan for these taxes when withdrawing to avoid unexpected liabilities and ensure they maximize their after-tax retirement income(USG Corporation_Retirem…).

How do employees at USG Corporation access the necessary documents related to their retirement benefits, and what is the process for obtaining copies of these documents if needed? What are the responsibilities of the Plan Administrator in this process?

Accessing Retirement Documents: Employees can access documents related to their retirement benefits through Your Benefits Resources™ online or via phone. If additional copies are needed, employees can request them from the Plan Administrator for a small fee. The Plan Administrator oversees ensuring these documents are provided to participants as required by ERISA(USG Corporation_Retirem…).

What unique provisions exist for USG Corporation employees who experience a break in service? How do these provisions impact their accumulated benefit service and overall benefits upon reemployment?

Break in Service Provisions: USG Corporation allows employees who experience a break in service to retain their accumulated benefits if they are reemployed within one year. If reemployed after one year, their previous service may not count toward future benefits unless they were vested prior to termination. This can affect the total benefits an employee accrues if they leave and later return(USG Corporation_Retirem…).

What options do employees of USG Corporation have for managing their benefits if they return to work after retirement? How does this affect their pension benefits and the overall strategy for maximizing retirement income?

Returning to Work After Retirement: Employees returning to work after retirement at USG Corporation will have their pension payments suspended and recalculated based on additional years of service. This recalculation takes into account prior payments, meaning employees should consider the impact of returning to work on their long-term pension strategy(USG Corporation_Retirem…)(USG Corporation_Retirem…).

How can employees of USG Corporation contact their Benefits Resourcesâ„¢ for more information on their retirement plan options? Are there specific channels preferred for different types of inquiries, and what resources are available to assist them?

Contacting Benefits Resources™: Employees can contact Your Benefits Resources™ via the web or a toll-free number to inquire about retirement plan options. Different inquiries, such as changes to beneficiaries or requesting benefit estimates, can be handled through these channels. Resources such as detailed benefit estimates are available to help employees plan for retirement(USG Corporation_Retirem…).