Originally Posted by
FXLAX
Out of curiosity, what was UPS’ A plan before and after this increase?
In a nutshell:
No retirement DBP prior to 1998.
UPS 1% FAE max at 30 years first negotiated in 1998 contract, retroactive to all pilots on property.
However, each UPS/IPA contract since 2006 has another option, the contract by contract (like term insurance) "flat dollar benefit" DBP formula.
When your age group is covered in each successive contract, you will earn the higher retirement Defined Benefit Plan (DBP "A Plan") benefit of the two. 1% FAE or Flat dollar.
To expensive to comply with ERISA requirements to increase our FAE 1% formula, so IPA negotiated and uses the Flat Dollar Benefit formula contract by contract.
Timeline:
1998- 1% FAE
2006 -1% FAE all pilots, or, pilots turning 60 in range of years of current contract by birth year. Captains $3000 per year service. Max 30. (Max $90k per year)
FO's $2400 per year. (Max $72K per year)
Example 60 year old Captain earns a max benefit of 30 years x$3000/year =$90,000 annually to receive as desired by contract options (Survivor benefit, No survivor, level term payout, say 10 years, etc)
2016- 1% FAE all pilots, or pilots turning 60 in range of years (captures increasing age of pilots to gain flat dollar benefit option) Captains $4000, then 2020, Captains $4100, Then 2021, Captains $4200.
FO's $3200, then 2020, FO's $3280, then 2021, FO's $3360.
2020 TA: 1% FAE all pilots, increases flat dollar eligibility for pilots who will turn 60 during the proposed TA,
Captains Jan 2022 ; $4300 , then 2023, Captains $4400
FO's Jan 2022: $3440, then 2023, FO's $3520.
IPA pilots continuing to earn DBP increase year by year through 2021 current contract.
Max Captain flat dollar= 30x4200=$126,000
Max FO flat dollar =30x3360= $100,800
If TA is ratified, DBP increases continue through 2023.
Max Captain DBP benefit using flat dollar is 30x$4400= $132,000.
Max FO using flat dollar is 30x 3520=$105,600