Real life examples at Southwest:

Virtually every captain hits the 36.5k IRS max company contribution limit. Once they do, they effectively get 14.2% raise until the end of the year as they get the NEC contributions in cash now.

A junior FO example... I made 170k last year and I hit my personal 401k contribution limit. The sum of my 401k contributions and the company NEC contributions comes up to 41k for the year. When 2017 PS is announced, i need it to be at least 8% in order to hit all IRS limits. If it’s over 8%, anything past that figure in my case will come to me on my April 20 paycheck. So say it’s 12% PS... I’ll get 8% of my 2017 waves that will max out my retirement, and 4% of my 2017, I’ll get paid on my April 20 paycheck.

Make sense?


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