Originally Posted by
CompetentFool
So evidently FedEx owes our pension a couple billion dollars to meet this requirement in 2018. It's cheaper for the company to hand off the plan to ALPA and then allow ALPA to administer the plan outside of the PPA 2006 funding requirements. Thus the VAPP. FedEx continues to make monthly funding payments to ALPA but avoid the 2 billion cash payment due next year.
[/FONT]
Why is that our problem? The company negotiated the contract knowing the payment was coming due. By the way, where did you get that number?
The company wanted and got higher medical payments from the pilots because ObamaCare was going to cost more. They offered and got 50 cents on the dollar for not using sick leave. They offered 60 cents on the dollar to freeze the DB plan, but we rejected that idea.
Based on the 5% rate of return mentioned by Blitzstein, our current DB plan is worth a little over $30,000 per year if you retire with 25 years and are age 60 or older and the floor benefit being $130,000/year, matching our current DB benefit.