Full pull

Can anybody decode this message about retirement?

Nightflyer

The union is finally going to do what they should have done prior to or during negotiations.

If this leads to an LOA, everyone needs to ask lots of questions prior to voting, and they need to understand exactly what all the details and nuances mean.

I don't see the company agreeing to anything unless it saves them money at our expense.

We had leverage, but we [apple pie and vanilla ice cream] it away. There is no incentive for the company to even entertain discussions, unless it is to their benefit.

Albief15

It means they want to look at what it "really" costs to fund an A plan.

Company said (paraphrased and second hand info) that it takes about 3 bucks to get a buck in benefits out of a A plan due to funding requirements.

The optimist says maybe there is a way to get another buck of benefits for the pilots, save the company a buck, and split the third buck for a win win. The pessimist says with past history the company will simply want two bucks and part of your third buck too.

To know what is really available, you need independent analysis. You get an appraisal before you buy a house, and it sounds like the union wants to objectively look at the numbers.

In the past, many unions--Alaska comes to mind--have offered the pilots a "rebalance" with a reduced or frozen pension in exchange for a higher B fund contribution. At one point apparently this discussion was going on, but a majority of MEC reps prohibited further discussions on a rebalance discussion. Not saying that was good or bad--just pointing that we ended up with no adjustment upwards in our A plan with a very modest bump to the B plan in our deal. Some want to see if there is room to improve that.

The pragmatic person will look at the numbers, and based on your seat, years left in service, etc run your own numbers and see what it would take an improved B plan to overtake and improve upon an A plan already in place. The A plan isn't going up, but even with that the less time you have left at FedEx, the harder your B plan would have to work to offset a "freeze" of an A plan benefit.

I ran numbers with about 13.5 years to go at 6% rate of return...not great but about what I have averaged. It wasn't close. Even with an 18% B plan (and I have no idea what numbers might be used but went based on other legacies) I am better off with the current plan. Of course, I have to live to retirement to reap the benefits, but I looked at numbers retiring at 62 and 65 and living until 85...

If there was a "bump" to the A plan....raising the cap to 300k or above...it might make catch up. If someone here is a stock genius and can get 12% a year...well...then you want a B plan as big as you can get. I haven't proven I can make money in real estate or stocks, however, so I am going to be more pragmatic.

A person with more years until retirement might reach a completely different conclusion. At other properties there were several options available and the pilot could choose the one they felt optimum for their situation.

Apparently in 2006 a rebalance was discussed here. Anecdotally I heard FedEx was wiling to pay about 25 cents on the dollar, and ALPA said "no thanks". There are guys who post here who were MEC or committee members during the period who probably have more accurate info.

My own strategy is ignore the noise and look strictly at numbers. Know what your retirement is currently worth. Do your own math. Then when and if options are presented, know what they are worth and go with an option that works best for you.

What I can say is that with only 57% voting for the last contract, and many holding their nose while doing it, any LOA would have to be very, very palatable and offer a solid benefit before it would be approved. If its not a clear winner for the pilots, it won't happen. Getting the contract meant no strike and a raise, albeit a much smaller one than most wanted. The cost for rejecting an LOA? Only the opportunity cost of any potential gains. I cannot see this pilot group passing anything that wasn't a clear winner for their families at this point.

Nightflyer

I hope you are right, but we have passed bad LOA's before.

We didn't even get cash over cap with our current B plan.

I think the last time we voted no was 1997 or 1998, the first FPA contract.

I am sure someone will be along to correct me if I am wrong.

USMCFDX

I am completely against reopening outside section six.

Huck

Risk has a cost as well.

You're counting on your pension checks not bouncing till you hit 85.....

pinseeker

Do you think FedEx is the one writing your pension checks the whole time?

busdriver12

For us to be willing to change our pension, there would have to be a significant benefit. Not, "The sky is falling, we can't afford it for you (but we can for top managers)". Or, "We know you are just dumba$$ pilots who like to fly, and we can talk you into anything".

Why would we renegotiate unless it was significantly better? An increased B plan, particularly one that is capped, will do nothing for many people. Nobody is going to agree to a frozen pension for a small B plan increase. You might think you have 15-20 years left, and something happens that grounds you. I would think they'd have to improve the A plan for those on the property for anyone to even consider it.

Nightflyer

I am sure someone will correct me if I am wrong, but I think when you retire, the company purchases an annuity, and then you are paid from that annuity.

I was told that by someone who had been to the retirement seminar.

Can anyone confirm?

Full pull

Please tell me I'm missing something. It sounds like we are hiring a consultant on retirement issues then we are going to ask to negotiate retirement. Shouldn't we have looked at this Billion dollar issue while we spent the last five years in contract talks.