Originally Posted by
pinseeker
Well, since you are offering, I'll take the 1 cent doubled every day for a month.
If you look at the annuity calculator that Lag posted several month ago, it will show you that at 6.5% ROI, it will take about $2.2 million to buy a $130K/year for life retirement for a 60 year old male. It will take a $2.7 million annuity for the same male for a $160K/ year retirement.
Just when I thought there was hope, that you truly understand some of the math thanks to your, correct, choice of a Geometric Progression...you have to trot that out.
Displaying you truly, have a serious fail in how Pensions work.
Not disputing the Value of what it would take for an Individual to accumulate\purchase an Annuity.
But Pensions are a Group Function.
If our Pension simply purchased an Annuity for a pilot at Retirement...then there wouldn't be any emphasis on the funding level\how many are retired and collecting benefits-etc.
There Wouldn't be Any Benefit for FedEx to offload Pension assets to someone like Metlife (I know-confusing isn't it, but Google FedEx Offloads Pension to Metlife)
Here's the thing, just as is true with Health Care, it's Cheaper for 4500 people to have X dollars of Pension liability than it is for a single person. Why you might ask? (BTW-For Health Care the Insurance bet is More People will be healthy than average)
This might sound shocking, but people die. They die all the time. Car accidents, airplane crashes, fall off of roofs, shot by jealous husbands...you get the idea.
Statistically, something like 1/3 to 2/5 of us are going to die within 10 years of retirement. Maybe 1/10 of us are going to die before retiring. And it is the untimely death of oh, so many of us, that helps support the Pensions of those of us lucky enough to make it to 90. Or unlucky enough to make it to 129 (if you believe that news story).
The Big Huge Reason our Union is pursuing this, is because they promised to. Most people totally failed to notice, but there were a Lot and I mean A LOT of people who were disappointed that the 2015 TA achieved 0% of Improvement in our A plan after 2+ years of SS ramping up the support\emotions to try and get it back to the 50% Income Replacement value it was pre CBA2011. So much disappointment that SL achieved nada that our Union promised to try and find a way to improve our A plan.
This is the result of all that effort.
IMO-order of Value.
Current A Plan
VB Plan
High 5 A Plan with at least a 25% fixed Income limit (ie 325sh)
High 5 A Plan with a Floating Cap
What, if anything we will achieve pre S6 is TBD.
What we will achieve in S6 is also TBD, as is the timing involved.
I'm fine anyway it shapes out, and once negotiations hit that year mark--I'll be changing my field draft answer to No, and simply flying my line.
For as long as it takes