Originally Posted by
kronan
B plan, Tony C is absolutely correct as it is simply a matter of perception.
FAE-we think FedEx can afford it. FedEx is adamant that they cannot. They refused to budge, or even consider a minor adjustment such as making it the IRS cap (want to say that's 265 now, but I could be completely mistaken). The ugly reality is that FedEx doesn't want the additional uncertainty even a minor adjustment results in. It's an open ended commitment dependent upon long term investment returns, and has mandated ERISA funding commitments.
If I was a new hire, the only reason I would even be considering a big B plan vice our current mix is if I was thinking the A plan would be handed over to the PBGCC prior\during my retirement. Barring some outstanding stock picking\investment returns, an 18 or 19% B plan doesn't come close to matching the value of a maxed out A plan. Even considering that fact that in 20 yrs, the max just won't have the same cash value it does today. Something that will hold just as true for the value of your B plan.
Personally, I think it is foolish to even consider voluntarily eliminating one of an individual's retirement components.
And for me, they can have my future FOs A plan when FedEx is verging on bankruptcy. Sucks for me, but I'm not willing to trade a future drinking bud's A plan for a bigger B plan for me.
We're all in this together
It is 265 this year, last year it was 260, the year before 255. It essentially goes up 5K a year. This is why FDX will not commit and that was my point. If they raised it to IRS limits this year everyone would moan that it has fallen behind next year. The IRS limit will be at least 300K by the amendable date in 2021. No one will be satisfied by a bump to 265.
As far as A Plan vs B Plan, different strokes for different folks. Were I a new hire looking at 30 years here I would take a 18% cash over Cap B Fund in a heart beat over a capped A Plan at 130K and 25 YOS. Regardless, the point is when we tried to have a conversation it was shut down. We should have listened and seen what we could get. Maybe the answer was 25%.