kwri10s

Not to interrupt the love fest you two are having, we should not use "sound bite" numbers that the union threw out with the last contract. That 4-1 is just stupid for the union to say. When they open their mouths and spout that drivel it just shows they don't know what they are talking about. Yes, it might cost the company some multiple of what they are paying out IF they wait to fund each members retirement fund until the member is closer to retirement.

Funding an A fund is all about when the company designates monies into the fund and also how much they designate. The company can wait until a pilot reaches his 10th year and begin to fund against the pilot's retirement if they want. I have no idea of what the funding requirements would be if they started at the 10 year point, but the company will be required to fund more than if they started funding when the pilot was hired. Conversely if they wait to fund until the pilot reaches the 15 year point it will take more capital than if they started at 10 years of service.

For just fun and your own enjoyment (not you specifically, the collect you of those reading), take a simple spreadsheet and put in 1 Million dollars then do a simple rate of return of 4.5% (the rate FDX is paying on the last 4 Billion dollar bond they issued in order to fund the latest stock buyback). After 25 years the interest will easily fund your annual retirement without touching the capital. When you die, the company can then roll the remainder into the fund for the next new hire. Increase the rate of return and you need less at the initial funding to cover the retirement.

Now that's simple math. There are companies that manage risk and invest accordingly. A pretty simple process of early risk when the pilot is young in the career and less risk as he nears retirement would result in substantially higher rates of returns even if they never got near equities. A 6% rate of return earns you might have $180k in interest returns for your retirement, and 8% earns you $240k. 8% is probably out of the reasonable projections, but just FYI.

I'm not saying this is the solution, but it's a basic simple example of how to fund for future projected expenses that I can easily see. I'm sure the real solutions are much more complex and reasonable, but to keep telling us they can't afford to fund it, and us believing them, is dumb. The company just has to decide when they want to fund the A plan. They just don't want to have money sitting in our retirement fund when they could use that money to buy back stock or pay bonuses. Retirement funds are not sexy for investors so since the corporate mantra is all about the investors and screw you to the employees, that means they want to do away with having to set aside money for our retirement.

I know my marching orders to the MEC are: improve the A plan and increase the B fund (or increase the 401k match). Don't have two scales of pilot retirements. At some point in the future IF the company is less solvent and people no longer ship things and we are looking at ways to help the company (like UAL and AA), then maybe we could look at alternatives. But until that point, stop screwing with the A plan unless it is an improvement.