Originally Posted by
TOGA LK
Making it easier to follow. If the company puts 15% into a 401k, you put in 20% up to the limit the net result after 20-30 years of market instability (assuming there is one in five) will land you well short of where the DB would put you, otherwise they would still be around. The DC is FAR cheaper than the DB ever could be, the 15% is a poor replacement at best. With a DB the company must ultimately infuse raw cash during downturns to fund it, this is not the case with a DC.
We never hit a real retirement wave with the old DB system, one can only imagine that the old system was at least $100k a year more costly to the company, all benefits considered.
Now what am I trying to say with all this? There isn't one solution. You have older and wealthier pilots who are already set in retirement, they likely desire a larger W-2 to better support a lifestyle while they are younger. Some pilots may be fine with current earnings and are looking ahead 20-30 years from a position of just finally starting off in life.
Like the post I quoted I would be very disappointed with a 23% raise (heavily taxed if without debt) and no increase to retirement. Personally, I'd rather see all of 2015s gains go into third party tax shelters. Perhaps it's time to split the contract because we have two generations of pilots and their wants are likely not aligned.
My last point and I will bow out for the night. In the 2000s pilots were retiring with several million. Here we are almost two decades later and out current set of retires won't really retire for another decade, that's almost 3 decades past the 1997-2000 group. $3m has nowhere near the buying power it did back then. And for those thinking I am on track to retire with several million in 2030-2045.... It is basically a couple hundred grand half a century later. Call BS on this? Look at fuel, food, and home prices (esp coastal) over a 50 year period.
Retiring with the dollar amount guys did half a century earlier is in my opinion, falling well short. We need SUBSTANTIAL increases into retirement.
^^^^^ THIS! ^^^^^
10 years ago when I was a 757 Capt, my DB plan was worth $1.4 Million. Today it would be worth over $3 Million.
At 15% DC funding at today's 777 Captain rates ($265/hr), it would take 35.2 years for the company to contribute $1.4 million!
The 2004 777 Capt. pay rate was $319/hr. If you flew 1000 hours/yr. for your final 3 years, using the old DB plan, which was 60% of your final 36mo. average earnings, that would put you at $191,400 per year, IN RETIREMENT, 10 years ago! I know some of you won't hold the 777, but the 2004 pay rate for the 757 was $265. That would net you about $159,000/yr . when you retired, for the rest of your life, no investing needed. Oh, and your wife kept getting most of it (60%?) if you died first, until her death.
THAT's why the company wanted to cram the DC plan down our throats! It is MUCH cheaper for them!
BTW, the American Pilots never lost a cent in their retirement plans in their bankruptcy. My friends there who have about the same time in there as I do here (29+ years), do have $3 Million in their retirement funds today.
When do you think Delta is going to make sure YOU do too, giving you 15% of 1998 pay rates?