I was really hopeful to read a passable TA, given our superior leverage position relative to past negotiations, ("Drafting all seats" via FCIF and we had 2.5 more months of increased flights,with respect to peak, and with a static number of willing pilots = more encouragement from Fred to bargain in good faith).

I find it intriguing that the company when beset with higher costs due to legislation (Health care) the Company sees fit to shift these costs to their employees. Yet when they reap rewards from legislation or negotiations, those spoils are not shared with employee groups that contribute to the success of FDX.

Specifically, the age 65 legislation monetarily benefited the Company. Any pilot who began accruing retirement benefits prior to age 35 and works past age 60 reduces the cost of the Company in at least three meaningful ways.

1) The pilot hired at 35 y/o (or less) will have 25 yrs with the Company and can accrue no more percentage points, with respect to the A Plan. Therefore, any years he/she works past 25 years of service become cheaper and cheaper for the company to employ (a "savings" for the Company.

2) The more years that pilot works past age 60, the less A Fund monies the Company has to pay that pilot in retirement because his retirement period is shortened. (Another savings for the Company).

3) The longer a pilot works past 60, the less training costs with respect to "turn over" in employees.

I am not particularly close to retirement (12-17 yrs from now), however, the A Plan is the 800 LB gorilla eating our retirement saving approximately $608,400,000 over the next 28 years for the Company due to inflation. I performed the inflation erosion math that applies to my age demographic and how it relates to our A Plan retirement. I'm a 48 years old male, with an avg lifespan of 76. Statistically, I should die in year 2043. The A Plan limits were established in 1998 at $130,000 USD. (One should think of 1998 as the "anchor" year, and how it relates to inflation and the devaluation of the A Plan.) If I live till the avg of 76 y/o, I should die in year 2043. From the "Anchor year to 2043 = 45 yrs of inflation erosion to A Plan monies. I then consulted the CPI-U chart (referenced by our NC) to determine the average rate of inflation from Jan 1998 (the Anchor) to Sep 2015. Here's the site

CPI-U Calculator

The total inflation rate since '98 to now = 44.21%. The avg inflation rate during that period = 2.6% (it excludes the high inflation rates of the mid '70's and early 80's.) Then multiply 2.6% X 45 (years from 1998 - 2043 {when I should statistically die}) = 117%. Since the company refuses to increase the caps to adjust for inflation, the most accurate method to determine what the A Fund will equal in year 2043 is to relate it to 1998 dollars (isn't it easier to remember what things cost 17 yrs ago vice imagine what things will cost 28 years from now?).

For flow, the math calcs have been added below for those who wish to follow the math.

My Benefit in 2043 equals $59,907.83 in 1998 Dollars or less than half the $130,000.
For those that should live past 2043, every 5 years beyond 2043 are your benefit expectations

In year
2048 = $ 56,521.74
2053 = $ 53,497.94
2058 = $ 50,781.25
2063 = $ 48,327.14
2068 = $ 46,099.29

As one can clearly see, the younger one is, the greater the erosion affect of inflation. Some of the numbers are what pilots not on the property yet, are looking at. You can be sure they will be thinking, "FDX's B Fund is 9% (4.5 years from now) UPS is 12%, DAL is 15%, UAL is 16%, and AA is 16%? At most of those Carriers I can fly daytime? I get better FAR rest limits? I don't get stiffed on accepted fares? I get profit sharing? If I fly draft/volunteer I get 200%, the company rarely disrupts my schedule because Disruption Penalties are painful enough the company actually plans their schedule better?

It is my opinion the Company's offer in the A Fund is obviously concessionary. The paltry increases in the B Fund since 1998 thru the proposed amendment date is 3%. The erosion in A plan far out strips the TA's B Fund "enhancements". If this TA were approved, the company will have effectively shifted the burden of retirement onto us without the commensurate increase in compensation to "self fund" a retirement.

I am baffled why other solutions were not employed to return us to a semblance of "whole" in light of the A Plan. For example, a B Fund commensurate with Industry, higher compensation to self fund retirement, higher 401K matching contributions ($500 match?), FDX stock (there are other ways around the A Fund caps that could avoid accounting rules, yet keep us afloat with respect to inflation.

I'm not a single issue voter, but this issue permeates the other sections. Insurance with its cost increases is a push at best. Work Rules, while there are some modest improvements, there are give backs as well.

One "yes" voter commented, "do you think you are worth THAT much more than other pilots?" The correct retort is, I don't think I'm worth 54% less than a pilot who retired in 1998.

$130,000 divided by $282,100 ( A Plan inflation adjusted for year 2043) = 46% 100 - 46 = 54% less

Turn the oven back on, this TA is half baked.


The math explained.

Keep in mind, if the Company would agree to index our A Plan to the CPI-U inflation rate since 1998 (an increase of 44.21%) to arrive at this year's theoretical maximum limit, one would NOT multiply 130,000 X 44.21%. Remember years ago in math class, to easily find the answer to a percentage problem, you would move decimal points and add a "1.00" to the interest rate, which represents 100% of the original number. In this case $130,000. The inflation from 1998 to today is 44.21%. To calculate what our indexed A Plan max should be today, one would convert the 44.21% to .4421%. Then add .4421 to 1.00 (the 1.00 equals 100% of the principal) this equals 1.4421. Agreed, it's a bit confusing, so get your calculator and do the math. Multiply 1.4421 X $130,000 = $187,473. This SHOULD be the new maximum A Fund limit if we were keeping up with inflation as reported by the CPI-U.

However, since the Company refuses to abide by our theories of indexing to CPI-U. Therefore, to avoid not getting snookered again, we must determine what our "TA
A Fund retirement" will be worth in 1998 dollars during our retirement and the affects of inflation and how it relates to the $130,000 cap during our retirement years.

In my specific case, from the"Anchor year" (1998) till statistical death (2043) = 45 years.


45 years X 2.6 % inflation = 117% inflation will dramatically reduce the benefit by slightly more than 50%.

Remember, your math class and the previous example of the decimal points and adding a 1 prior to the decimal point to account for the original 100% ? Therefore, in this case 117% would be written 1.17% and then add a 1.00 to that number
( 1.17 + 1.00 = 2.17 ). Therefore, my inflation reduction number = 2.17%

To find out how much inflation has reduced the benefit, input into your calculator $130,000 divided by 2.17% = $59,907.83 USD

That's correct. The approximate value of my retirement in 2043 will equal roughly $60,000 in 1998 dollars once adjusted for inflation.

Does the math pass the smell test? 2.6% inflation X 45 yrs = 117%. If inflation is over 100%, doesn't that mean our $130,000 is roughly half, or $65,000? Wouldn't one need to subtract another 17% from the $65,000? That's how we've arrived at the A Fund benefit that's slightly below $60,000.

Anyone living longer than 76, or participating in the retirement program that allows passing this benefit on to a surviving spouse, or anyone younger than 48 years old, will have to increase the affects of erosion and accept a smaller A Plan benefit (saving the Company money).

I ran the numbers for every 5 years after 2043 those younger than I, for demonstration purposes.