Originally Posted by
BoilerUP
The DC delta at the $285k 401(a)(17) annual compensation limit is $8550. At "only" $200k income, the 3% difference is $6k. I don't personally find that 'insignificant', but will concede its a matter of age, longevity and perspective...
Your point about defined benefit while retiring as a PFO is taken. No denying your 2% FAE provides greater life/schedule flexibility, however, as we have had a number of pilots who upgrade solely to punch their CA FDA retirement ticket and retire shortly thereafter. Our junior CA is an 8/15 hire, and our youngest CAs are 36; very very few will be 'forced' into retiring as a First Officer at UPS without an opportunity to lock in the FDA.
My post isn't meant to be a "ours is better than yours", but rather an academic compare-and-contrast of the differences between the entire retirement benefit we both receive as we both desire to further increase that benefit. There's really no 'wrong' way to go about doing that...
Let's throw some numbers in for comparison. Using $8550 from Year 1. Over 25 years that adds up to an extra $675,060 in Brown's B plan at an 8% return. At 6.5%, adds up to $536,216.
Using the final A plan FDA values, Brown's A plan value is $110,00 and $88,000 respectively.
If you use a 4% withdrawal rate, value comes in at $137k\$115k or $131.4k\109.4k.
Advantage for Brown is that more $$ will be in an individuals hands\inheritable. Smaller impact should the Pension be handed over to the PBGC (would submit to you that the odds of that happening are wicked low, probably about the same odds as my 50 year old ass throwing 95 mph fastballs)
The actual results depend a lot on Career earnings, and individual decisions to upgrade\not upgrade.
And this outlier, doesn't take into consideration that a fair number of FedEx pilots max out their disability accounts at some point in time and then have their annual sick leave deposited into their B plan or paid as cash over cap. Takes 10+ years to get there, but even a NB FO who starts using 30% of his sick leave banks another $10k.
The greater YOS one has at Brown, the better off you are. Period dot.