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Old 07-24-2017, 09:00 PM
  #106  
TonyC
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Originally Posted by DLax85 View Post

I wrote this....

"If we are successful in increasing the A fund FAE limit, I think we should tie it to other portions of our contract rates.

Perhaps, WB Capt or NB Capt x 1,000 hours --- then fill in the missing value with B fund enhancements

I don't think the company will agree to an A fund cap that captures our highest earners, and all the extra hours & various payments they may strive for in their final years --- that era won't return"



Then Tony responded with this...



So, assuming we were able to negotiate a raise to the cap, what should the limit be?

Should it be tied to a rate & set credit hours like suggested above?

Should it be retroactive?

Another approach would be to set the FAE cap at twice the IRS limit. The 50% retirement benefit (25 YOS x 2%/yr) would equal the IRS limit.

A still higher FAE cap might benefit an older pilot reaching retirement age before reaching 25 YOS. In other words, if a pilot never gets to 50%, but he's accumulated some really good years, he might be able to reach the IRS limit with a higher FAE cap. For example, if he gets 23 years in with an FAE of $280K, he could wring out a $128.8K benefit. That's close to what a guy can get with the current formula, current FAE cap, and 25 YOS. How many pilots do we have who would fit that niche, and how willing would we be to negotiate a niche benefit for them? I'm guessing it wouldn't be a priority, but it's an example of another thought process which might be used to establish a new FAE cap.



As with any negotiation, you don't start the bidding with what you really want to achieve -- you stretch, and compromise. Shoot for the stars, but I don't think we should be satisfied until everyone with 25 years of service can expect to replace 50% of their regular income (BLG at straight time) with the defined benefit. Any FAE cap that impairs that ability is too low.






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