For a 30-something hired a DC plan with an 18-20% (ala United/American post bk) might be attractive. Why? Accumulate enough in 20-25 years and can walk as desired…no requirement to wait until 60 or take a hit if you go at 55. Any DB plan, however faces some pretty serious risks too:

1. You have to make enough income to make that 18% mean something. Furloughs or LOAs (not mil) could cost you…

2. The Government's 415-c limits on retirement savings. Right now it is about 52k. There have been initiatives in the past to limit those to 20%/20k per year, which would put a major dent in any benefit those DC plans would accrue.

3. Interest/investment risk. Obviously--if you put your DC plan into an investment that fails, you lose big time.

IMHO, its # 2 that is the biggest unknown. With our disability plans and time on your side, I think 1 and 3 can be mitigated. 2 is just too murky….

Alaska and a few other places offered their pilots a rebalance option. If a pilot at FDX was lucky enough to get a high 5 early in his career (good timing, flex instructor, FEPP winner, etc) freezing your current pension (ala American or NW) and taking a much higher DC plan might make you more in the long run. It would certainly be more beneficial to your family if you pass away before you retire or shortly thereafter. I"m not an R&I guru but you can run your own calculations. The guy who is going to get his high 5 his last 6-7 years probably isn't interested. That guy who got hired at 32 in the mid 90s and has been a WB captain since 2001 just might.

In the past apparently FDX offered a rebalance, but the calculations showed it was worth about 25 cents on the dollar to the current plan. There probably is a formula to make a DC plan (B plan) worth what a DB plan (A plan) is currently worth, but I have no idea what the numbers are. Fortunately, its just math and someone can figure it out.

This is going to get interesting as the information of the positions comes out….