Originally Posted by
golfandfly
If anyone could botch the contract language, that would be us. Make the floor $150k and you at least have my attention. It’s a ridiculously complex plan. We’ve got a great concept now, let’s just try and improve what we have. Add a cash over cap B fund, and/or a significantly higher percentage. Increased multiplier, higher FAE. Try to tie FAE with IRS limits (now $285k) as a sort of COLA. Look at a flat dollar pension. As I mentioned earlier, we did get some targeted A fund gains in 2006. We’ve really only failed badly in 2015. Make retirement THE cornerstone issue. Very, very focused negotiation.
Why reinvent the wheel? Ditch the pancakes and let’s use tried and true pension ideas.
The thing to remember is that it's Not simply Contractual language, but language that meets ERISA standards for Benefit Calculation. And Benefit calculations are, at their core, Math. 9% of definable earnings isn't debatable. Trip rig, or block override, isn't debatable.
What FAE is, isn't debatable.
And the IRS limit you're quoting isn't the A plan Pension limit, but rather the DC limit (401 (a)(17) if ya want to geek out)
The Defined Benefit plan limit per IRS\Department of Treasury cannot exceed the lesser of:
1. 100% of your average compensation for 3 consecutive years (at least it's the highest average)
2. $230, 000 for 2020
The Reason our Union pursued ways to reinvent the wheel is a desire to achieve improvement in our Defined Benefits. The actual accounting supports the company's intransigence towards improving our A plan, at all, during the last negotiations where it was THE Only issue SS pounded on the table during his tenure. Restoring our A plan income replacement level to that of 50% for our Intl WB Capts, because FedEx can afford it. We absolutely failed to achieve even a minimal improvement to our A plan, such as you've just suggested. In 2016 the DC limit was $265k, and I'm absolutely positive that the internet would've gone just as crazy if SL had "sold" that as an improvement to our A plan, with at least the prospect that it would increase over time. And the only reason we "know" that, is our Union signed an NDA to obtain the actuarial data and outsourced the validation of the math behind the rumors...and then, hired people to evaluate methods to achieve improving our Pensions.
And one of the components of our pancakes was tying compensation to that very DC limit you've proposed for our Traditional Pension.
As to why Management might be intransigent about improving our Traditional Pension, consider that our Pension Plans booked a $794M accounting loss last quarter. Thankfully, on the way to recovering as the quarter ended. But big swings in the value, along with the possibility of required funding is why pretty much every Pension plan has been terminated in the Private Sector.
Shoot, all you have to do is look at the evolution and eventual elimination of the Pension Plan for our non-contractual FedEx fellow employees over time. Or consider the big deal FedEx made a few years back to offload Pension Obligations in return for Pension assets. (Hint hint, FedEx can absolutely afford to provide Pensions to all of our employees, they just don't want to)
https://www.irs.gov/retirement-plans...benefit-limits