Originally Posted by
kwri10s
I think we are doing exactly that, splitting a pie. You will not get a percentage of your earnings, you will get a percentage of the total input from the company based on your earnings.
The companies portion of this plan is to allow for a FIXED amount they have every year. We are asking for a possible variable of a "floor" to earning where they might have an additional expense if our ROI doe not meet the floor return. If they never have a need to plus up for the floor earnings, then their cost per year is static. (perhaps there is an annual COL increase but the details are unknown)
IF you were getting a percentage of your earnings, then we would never use the term "pancake" to describe what you get. Instead, there would be a percentage being used as an example, with a max cap of earnings being shown. Never ever have I ever heard anyone explaining this say we get a percentage of our earnings. They've always said we get a percentage of the total or a pancake. In this video they say FedEx pays a percentage of payroll each year (5:45)
https://www.youtube.com/watch?v=mm_K3B_Xbws That percentage of payroll is what is then divided out based on how much you earn. So yes, the payroll percentage is the pie and you get a portion of the pie. If you earn more you earn it at the expense of those with less earnings.
Where to start?
First, the company costs aren't fixed or static, their costs increase every year that our pay increases. The company costs are a percentage of total payroll. If payroll goes up, costs go up. Their costs will be known, not static or fixed. If the plan doesn't meet the floor guarantee, then they will have to pony up more cash. Of course that all still has to be negotiated and no one really knows how that will work. I've asked what happens if the company says they can't meet the floor guarantee, and the answer was that they would have to, it's in the contract.
Second, your "pancake" is determined by taking 2% of your earnings and then figuring out how many "pancakes" you get by the cost of each "pancake." If you earned $250K this year, your benefit would be $5000. If the cost of a pancake at the end of the year is $10, you get 500 pancakes.