Nowork the union video explains nothing about the mechanics of this plan or its protections and that is what concerns people on these forums and on the line. The video says that the real problem is pilots are resistant to change and that we all need to unify behind their plan. It says that we are too weak to negotiate with the company on current A fund improvements but in a strange twist of fate we are able to get a whole lot more money from the company if we choose this other plan that no other company in the history of the world has ever had.

Notable quotes:

"The PSPP remains nearly fully funded in all market conditions, which really addresses the Company's concern with regard to funding and accounting liability. So the ups and downs and the risk of volatility associated with the current pension plan is reduced quite substantially. And you know, while the investment risk is shifted to the pilot, the plan does provide a guaranteed floor benefit feature to address that investment risk." ...What happens when the huge stock market correction happens and our stabilization fund is depleted? The real answer is we take the hit in retirement income - that is the only way a pension fund can be fully funded in all market conditions! How is there investment risk but the payout can never go down? This thing is risk free!

"The plan design in and of itself mitigates those risks and reduces the probability of finding ourselves in an adverse situation, underfunded and things of that nature. So while there is risk involved, this particular defined benefit plan design, the plan design in and of itself mitigates or hedges against that risk." ...I read a bunch of "mitigates" but no mechanisms as to how this happens in a world where payouts never go down despite tanking markets. The plan design is not explained, unlike our current A fund, which is explained in full and available to be scrutinized down to the penny and share in every investment vehicle they use to fund it. I note another day has gone by and nobody has produced the name of a single company now or in recorded history that has a variable plan such as this that also has a guaranteed floor so we can scrutinize their plan details and protections. It simply does not exist anywhere but we have to have it now or we are dumb pilots who will be destroyed by inflation tomorrow. That is the real fear mongering in the video!

"One more thing to remember about the inflation protection that the PSPP provides is also that due to your ability to maintain your shares in the plan you're able to capture market gains and possibly increase the value of your benefit after you retire. So you're not stuck with a single value in retirement and you may have a hedge against inflation." This thing is all about the stock market and these guys are day trading gurus that do not understand risk. Our A fund should be predictable and stable like it is now and the company is on the hook to make that happen if the underlying investments underperform and they cannot get out of it. These day traders are about capturing market gains of equities which is B fund stuff and destroys the beauty of our diversified retirement system. They are smart because they know that dangling a few extra bucks in front of pilots will get them to approve the riskiest of plans.

I am absolutely convinced that anyone on this plan will have their standard of living negatively impacted by a market correction that reduces the VB/PSPP fund ability to payout. Read any of these pro articles about VB plans! All risk is on the employee because if the market corrects their retirement income goes down. If the company only has to pay the same amount into the plan per year regardless of fund performance, they'll never have to make up for a down year or two or decade. There is no way that a stabilization fund prevents this. What does the stab fund invest in and how does it never run dry???

https://corporatefinanceinstitute.co...-benefit-plan/
https://findley.com/wp-content/uploa...aper-Final.pdf


From the Congressional Research Service 2018 - "Alternative Plan Designs: Variable Benefit Plans ...As an alternative to stricter funding requirements, plans would not become underfunded if participants’ benefits fluctuated with the plan’s investment performance. For example, one plan design has a conservative assumed investment return (called a hurdle rate). Benefits are adjusted upwards if the investment returns are above the hurdle rate and benefits are reduced if the plan’s investment returns are below the hurdle rate. Employer contributions could be unchanged in either scenario. Although this plan structure is available under current law (and is referred to as a variable annuity benefit plan) they are not common among DB plans."

I also note another day has gone by and there is no information on what levels this plan would be covered by the PBGC. Would we get the max 65k per year if the plan terminates? Would it be less than that due to the variable nature of the plan and the risk we take on as employees? What exactly is the PBGC protection because that is a must know item that has yet to be revealed???

This plan could yield some very nasty surprises at age 72 in retirement, all for the possibility of a couple more bucks per month.

What we need are negotiators that use every tool at their disposal and fight to increase our A fund. The company says no, and we do things to make them say yes. That is how negotiations work with successful employee groups. Day traders will not improve our A fund and may very well destroy it. Hope you have a huge B fund from a previous employer or a doctor spouse or some investment properties if this thing passes.

Why would I volunteer at the union to be told shut up and get onboard with this subpar and risky plan???

Serious question nowork - are you a union sme or somehow assigned to apc to sway opinion or even just monitor things here? I ask because you seem to have a mission here beyond informal debating and vetting of this disaster. If so, please get our opinion about how we want to improve the A fund rather than try to give us our opinion. Dr K