Originally Posted by
Noworkallplay
We have bids every 1-1.5 years. Because they are so big means quicker movement in a lot of cases just do to the scale of the bid. I don't think this stifles peoples career movement like you insinuate. Just because companies have bids every 3 months doesn't mean they will have vacancies. Having more bids doesn't directly correlate to faster movement.
They are big and last a year or more because it’s a way for the company to plan for at least a year. In essence, it’s a two step bidding process when all others do internal planning and just put bids out as needed. One issue with our scheme is that you are locked into it until the next bid. If instead they just released bids every three months, then those who are certain at that time would bid. As it’s stands now, we have to plan a year or more in advance. It’s not the biggest issue but it is an issue.
Originally Posted by
kwri10s
Another thing to remember with the VBP; is the main selling point to the company is that they can "fix" their costs as much as possible for their projections. In order to do that, the company will be "investing" a set amount each year. Now while the pro-PBS folks like to say that amount will be negotiated. The big problem is that it is a SET amount. You do not get a retirement pancake based on the amount that you earn that year, rather you get a pancake based upon the percentage of the total that you earned. It will not be a "set" amount that you earn. For example, if you earn $200k this year and $300k the next you will not get 1.5 more pancakes this year than last year. You do not earn one pancake for every $XXX. If a FO in HKG earns 8 times what you earn, then he/she gets 8 times the pancakes that you do. It's is all about your earnings compared to everyone else. Unlike everything else we do now, where you earn a percentage of your earnings towards your retirement. I hate to use this year as an example since we'll never see this again. IF we had this plan in 2015, then your pancakes this year would be based upon your total earnings with the "same" amount contributed towards the plan by the company as last year. So everyone flying AVA/Draft will out pancake those that are not doing Draft/AVA, since it's a percentage. So they are taking your pancakes. The total number of pancakes available to be divided up each year remains mostly constant.
If you are a BLG flyer and the average pilot (including training flex/instructors, management, ALPA buy up, etc) is BLG plus 30% then the BLG flyer will get credit for 30% less towards his/her retirement. You will not earn the "estimated", "example", "forecast" or "proposed" credit that you modeled for. The modeler cannot take that into account. The modeler only assumes everyone earns average BLG and then you input how much you say you will make. There's just no way to model forward projections of over earners. Ask yourself based on your day in, day out conversations with others; are you an average earnings pilot or above or below. If the average is 6 months of carryover and you do zero than you are a huge below average, so you will get fewer pancakes. In our current system, your earning compared to others do not matter. You either get a good year or not and you get 9% on what you earn. You either hit your max contribution limit or not. But it's all about what you earn, not what you earn compared to others. Right now, you decide your quality of life vs monetary income and you don't really worry about your retirement being funded other than your B fund and 401k. But they are your decisions, not based upon what someone else decided to make. That's what makes it a Variable Benefit Plan, your benefit varies from year to year, otherwise it would just be a group B fund.
Im trying to follow you here. I’m not sure I necessarily agree in your concept. The current A plan is calculated from your FAE with a cap of $260k. This new proposed plan wouldn’t have a cap. So wouldn’t it be a percentage of all pensionable earnings versus a capped earnings? In other words, won’t the pie be a lot bigger? It’s not the $260k pie being decided depending on career earnings. It’s actually a much much larger pie divided up. Do you know for certain that despite the larger pie, the pensions we would supposedly be competing with other pilots will be smaller if your only fly BLG?
Originally Posted by
Nightflyer
Traditionally at our company, FO's stayed in their seats long past the time they could have upgraded to Captain.
This allows more junior people to upgrade to Captain sooner.
If "every dollar counts", then expect a paradigm shift. More people will upgrade to the left seat at 100%, because their retirement depends on it.
This is another hidden ramification of the pancake plan.
It will take junior people longer before they can upgrade to Captain.
I'll bet you a stack of pancakes my prediction will come true.
Here is one other aspect I haven’t Hearn day one mention. If we tie total career earnings to our pension, wouldn’t that put downward pressure on our pay rates? Right now, obviously management wants to keep pay rates as low as possible. But when you also tie that into a total career earning pension scheme, won’t they make it more difficult for us to negotiate higher pay rates each contract cycle?
Originally Posted by
DLax85
The company's inability to meet their assumed rate-of-return is a primary reason they deem the A fund too expensive. It's not just new accounting rules. Yes, the A fund cap has not increased, but that does not mean it's "present value" hasn't increased.
We can Improve our Total Retirement by increasing B fund contributions and making some minor adjustments to the current A fund.
Doesn’t inflation decrease the value over time? What do you mean when you say that it does not mean it’s present value has not increased?