Originally Posted by
busdriver12
Ditching the A plan for newhires would make sense for very few of them. In order to replace 130K annual income at age 60, you'd need a lump sum of about 2.5 million, for something that got a mediocre return. Not going to get that unless you are a good investor, hired very young. As disappointing(but not surprising) that we were unable to get an A fund increase, I'd rather keep it for the new guys. Yes, it won't be worth near as much 20 years from now, but pension plans are going the way of the dinosaur, look around you. The equivalent of 2.5 million is still a lot of money, get your best revenge and live for a long time.
I would just like to see a good look at the numbers. We can all use a calculator and guess what inflation will be over 30 years, but I'd rather see an expert's numbers. Of course it will be a best guess. But what will 130k (minus survivor benefit if applicable) be worth in 2045? What would 16% times 30 years (at an average of 300k??) be worth? Of course the B fund rides the market (pilot determines risk), which could be really good or really bad depending on investment choices and market performance.
My take is that if we can't get an A fund improvement now (possibly the best time to negotiate a contract in the last decade), will we ever see an improvement?
I think most of us agree an A and B fund is the way to go. Sort of limits market risk and the A fund is a monthly check so you don't spend strictly from savings. But if the A fund isn't at least cost of living adjusted, what is it's real worth? I just think it's something to look at, that's all. I don't advocate throwing new hires under the bus, but will they see a better deal overall if they just have a higher paying B fund???