FDX Retirement - DBP
Sirs:
I'm not sure I have a dog in this fight or not - I'm retired. What you need to consider is what YOU have to invest in the defined benefit plan to receive your $130,000 a year. NOTHING. Show up to work, do your job, it's there. There is no matching. There is no negative. You work, you get paid. FOREVER!
Depending on how you set up your SBP, this retirement might even take the place of an insurance plan. Find me a good term life plan that'll pay your spouse $6,000 a month forever and not terminate when either of you turn 85 and maybe you'll opt for it. I doubt it.
NOW, think about how much your 401K, B plan - what ever needs to be worth to draw an additional $130,000 per year forever. I'd say around $4,000,000 to draw the interest and not touch the principal. If FDX Corp is willing to deposit $4,000,000 into ALL crew members bank account, plus pay the tax obligation on that deposit, then and only then would I have considered eliminating or changing the 'A' plan.
If you have a financial advisor advocating eliminating the DBP, you might want to go shopping for a new one. Worst case, get a second opinion. If you have a pilot (MEC) advocating eliminating the DBP, same thing - you might want to go shopping for a new MEC. I was told years ago - do you know how to make a pilot a millionaire? Give him $7,000,000. We're pilots. Unless you've got a decree in accounting and/or finance, stick to what you know. If your DBP goes away, I can guarantee you'll be sorry.
V/R,
Nakazawa
Note: Tell the MEC to increase the multiple from 2% to 3%. The annual distribution will still be less than the IRS limit on a DBP.