Originally Posted by
FXDX
The guys who have 25 years of service and their high five have absolutely nothing to lose in their scenario of freezing the current A plan. They can only go up with adding another defined benefit plan to the current A plan. Guys who stand a lot to lose are those who were hired at a later stage in life and will never get 25 years of service or perhaps even a high five of $260. Pilots who are out on LTD could also be adversely affected in a similar fashion.
This effort is being led by pilots with nothing to lose and desperately trying to get some kind of bump in their retirement benefits before they hit 65. That would be ok if they also get real improvements for everybody else, but I'm not convinced that will happen.
Even if the company were shown these plans and they were able to save money and increase our benefits I'm not convinced they would do it. Either out of spite or for company morale. How could they justify increasing our defined benefit plans after freezing everybody else's just a few years ago? I think the fallout from such a maneuver is why the company refused to consider it in the last contract negotiation.
I'm also not sure this pilot group (57% of whom voted for the current contract) will have the fortitude to vote something new down that really doesn't increase every pilot's benefits. A lot of pilots are prejudiced against A plans because they or somebody they know lost theirs due to bankruptcy and that is a valid concern. They hear A plan and instinctively think it will never be there for them and will take any B plan bump to cast away the A plan.
We all know that its not possible to replace that $130K per year with B fund bumps under current IRS limits. I'll take the small risk of FedEx going bankrupt in the next 20-30 years over taking on all of the investment risk myself over that same time frame. I've got the B plan and my personal savings to put in the market to augment the A plan and that is enough personal risk for me.
Agree!! I was hired in my mid 40s. I can't max out the current A Plan because I don't have 25 years to give until I turn 65.
That said, I have done the math and I have a number that the A Plan will be worth to me. And, assuming FedEx does not go bankrupt, it is guaranteed...no market risk to me. It is my baseline to build upon. Then, of course, the B Plan builds upon it, along with other things.
Bottomline, any plan that does not GUARANTEE me at least the amount of our current A Plan for the rest of my life will equal a NO vote from me. Sure, I wish our A Plan could be improved but it still has tremendous value that I think we underestimate that sometimes. I am not in favor of freezing my current A Plan percentage in favor of any plan that puts more of the risk on me.
This "expert" hired by the union has worked with other companies to restructure their retirements. But, those companies had to restructure because they lost their pensions. How many companies has he worked with that just voluntarily froze their A Plan in favor of some other plan?
I have not done an exhaustive search but if this goes through, we may be the first employee group in history to voluntarily freeze their A Plan. And, you know how it usually turns out when we try to show everyone how much smarter we are than they are.