Long time, no see...

Pursuing the Stabilized Variable Plan is problematic for numerous reasons many of you have already mentioned - and negotiating the appropriate “hurdle rate” hasn’t even been mentioned

A typical DB fund is invested in 50% stocks & 50% bonds, because it must not only grow, but actually pay out benefits to current retirees.

Anyone seen the current yield on a 10 year treasury?

Anyone know the Feds current plan for interest rates?

Anyone know what happens to the value of bonds when rates eventually do rise?

(Please research & understand the return from bonds over the past 15 years won’t be replicated for quite some time)

Negotiating a stabilized VB plan with a “hurdle rate“ anywhere above 3% would be naive and irresponsible.

With that said, I propose...

Keep current A Fund structure (High 5 FAE, 25 years at 2%) with 2 changes:

Index current $260K cap to the 401(a)(17) limit.
(Currently $285K)

This limit is adjusted annually by Federal Govt using an inflation index similar to that used by Social Security and Military Retiremets. Not huge, but not zero and wouldn’t require renegotiation

Additionally, allow 1% increase for YOS between 26-30 years

So 30 year career pays (25 x 2% + 5 x 1%) = 55% of High 5 FAE

(Note: This alone is a 10% increase for guys who want to work longer),

And increase B fund from 9% to 12% over the life of the next contract

(Note: Our B fund has grown from 5% to 9% over the past 14 years)

And finally, Increase/remove B Fund limit paying out “Cash over Cap”

In this plan, there are reasonable increases for all pilots - immediately and in the future

In Unity,
DLax