Originally Posted by
Fdxlag2
They would have. They aren’t concerned with paying the pilot who already has 25 years a pension of 160k, that is chump change. It is the 1000 pilots they have added in the two years since the pension was overfunded that is the real money.
Originally Posted by
Fdxlag2
And they make bigger contributions for a new hire through 10 years. And if the pension were uncapped they would make much much much bigger contributions for a new hire through ten years.
The real point is you and I don’t know how they fund our pensions. The union does and we should.
Now the pension is uncapped? I was referring to your statement that it cost the company big money for a new hire vs a 25 YOS guy to raise the cap to $160k per year.
So, here's the math.
Based on the annuity calculator that you linked, it takes about $2.4 million to get $130K for life and about $2.8 million to get $160k for life. That's a difference of $400k.
Over the last 2 year, about 600 pilots have retired. $400k X 600 equals $240 million dollars. That is what it would cost the company to fully fund the A plan for those pilots.
Now, 1000 new hires need to get to that magic number. If the company has a ROR of about 6%, and they made a one time contribution the first year for the new hire, it would cost the company about $600K to get to $2.4 million and about $700k to get to $2.8 million in 25 years. That's a difference of $100K. $100K X 1000 equals $100 million. $100 million is less than the $240 million it would cost for the last 2 years of retirees.
If the company made yearly contributions, that contribution would be $42k to $48k based on the same ROR. Thats a difference of $6k per year per pilot. $6k X 1000 equals $6 million. $6 million X 25 equals $150 million. $150 million is less than $240 million.
Your 10 year contribution would fall somewhere in between the two examples.