Originally Posted by BoilerUP

FDX has basically three retirement plans:

401k, with a max of $500 company match

Defined Contribution “B-Plan” of 8%; basically 8% of your gross earnings (up to the are deposited into a brokerage account in your name up to IRS limits for annual compensation and defined contribution, which includes 401k. Often times referred to as a Money Purchase Pension.

Defined Benefit “A-Plan”; this is a traditional pension. FDX has a benefit of 2% final average earnings (“high 5” of last 10 years I think, not 100% sure) up to their contractual income limit of $260k, with a max years of service of 25 years.

What does this mean?

Lets assume you work 26 years at FDX, and average $320k in your “high 5” years.

Your defined benefit will be 2% of final average earnings (260k contractual limit), which is $5200/year of service. Max YOS toward the defined benefit is 25, so $5200 * 25 = $130k annual defined benefit.

Now lets say you work 18 years, with a “high five” of $240k. 240k * 2% = 4800/YOS * 18 YOS = $86,400 annual defined benefit.

Disclaimer: UPS guy, so hopefully I’m not off on anything. In case you care, we get no 401k match, a 12% defined contribution, and have a 1% FAE or (more lucrative) Flat Dollar Amount Defined Benefit that basically gives retiring Captains $4k per YOS (FOs get 80% CA amount) up to 30YOS. ERISA & IRS requirements make the flat dollar necessary to renew every contract negotiations.

Hope this helps...