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A fork in the road, possibly, if we collectively choose to. Either way, change or not, the DB part of our retirement is slowly going to fade away. Inflation for sure, or a very negative event in the fortunes of Fedex. If we can't negotiate an improvement in the DB than something has to give.
If you stand in the middle of the road with a truck barring down on you, you have two options, move or get run over. Wishing the truck wasn't there or hoping it will turn away are not options a smart person would consider prudent. Fedex is forcing a change, at least consider the alternatives.
Let's talk accrued benefit: It's currently a function of Years of Service and 'current" High 5 earning.Originally Posted by dckozak
...If (federal) law prevents you from losing any accrued benefit, than the only "decision" you have to make is whether you choose to take the RI change or continue on the current path. If you are near retirement, it would appear not to matter what you do, you're likely to have our current (earned) benefit as you only meaningful retirement income.That makes this whole exercise mainly a question for younger Fedex pilots. A fork in the road, possibly, if we collectively choose to. Either way, change or not, the DB part of our retirement is slowly going to fade away. Inflation for sure, or a very negative event in the fortunes of Fedex. If we can't negotiate an improvement in the DB than something has to give.
If you stand in the middle of the road with a truck barring down on you, you have two options, move or get run over. Wishing the truck wasn't there or hoping it will turn away are not options a smart person would consider prudent. Fedex is forcing a change, at least consider the alternatives.
Lets take a pilot who's been on property 15 years and a high 5 of $200K
His current accrued benefit is 30% of $200K = $60K
With the freezing of the current DB and a switch to a VB will his YOS clock and high 5 start over?
I believe they will.
If so, regardless of the increased cap under a VB he will only accrue 10 years of service, which will yield 20% of his new VB high 5.
Let's assume, that's $300K. (...a $40K rise in the cap and he maximizes it).
20% of $300K = $60K
$60k (old DB) + $60K (new VB) = $120K combined
What would his benefit have been if he had the full 25 years of service under old DB?
$130K!!
I agree with you, the company doesn't want DB. They don't want to raise the cap. They want a pure DC like the pax carriers have.
If we end up at mediation, I believe they will point to the pax carriers and say see "we'd agree to that industry standard 16-18% B fund model" (in fact, that's where they wanted to go in our last negotiation)
Our only argument will be to point at the UPS model.
I think the truck is barreling down. I too think we should jump.
But we can choose to jump left or jump right.
I think many are suggesting it may be more prudent to "jump right" --- right towards an increased B fund with cash over cap provision.
Something in the neighborhood of 12-13%