Originally Posted by
USMCFDX
5% over the hurdle rate?? YHGTBSM
Do you understand how the funds will be invested? It will be exactly how the retirement funds are currently invested.
Do you know what the historical return has been?
You will not be getting 18% returns try 5% to 6% if we are lucky.
This is one of the major problems with this sales job. Pilots do not understand what the investment profile will be and think we will have sky high returns.
The company's target in the pension fund is around 6%. I would suspect that ours will be similar - however there are outlier years where you make far more than the target...also years where you make far less. The model has gone through extensive Monte Carlo simulations so the "luck" is about the same as your current DB fund getting what it gets.
I 100% agree with you that pilots do not understand the plan. The conservative return targeted was explained well in every by the briefers - I've never heard anyone saying it would be targeted higher - in fact, it's very conservative (more than the Company's actually) and that gives me a decent amount of confidence. And even with that conservative targeting it still reaches the numbers in the calculator. Did you attend any of the small group meetings about the PSPP?