Originally Posted by
DirtyPurple
I found this presentation worth watching again. I know it's been posted here before, but percolating it back to the top of the stack. This is Cheiron's presentation to ALPA on the version of the plan from 2017-18 timeframe.
https://www.youtube.com/watch?v=LvjGtv6POFM
I struggle with my own limited understanding of the bells/whistles of finance. I watch his presentation, I can hang on to the logic, but at the end of it, I keep asking "what's the catch?" How can there literally be no downside?
So on one hand, I don't want pilots to manage the retirement investment decisions. This plan does that. But on the other hand, I have to totally trust Cheiron Inc to not go full Enron/Madoff with the millions of dollars at their fingertips. So what's my comfortable balance here? Currently searching for that answer.
So even if I do trust the math presented, is Cheiron a company worth trusting for the next 50 years? I'm not sure the risk there is worth it for me personally. I'm still an undecided voter WRT the PSPP. I'm in my early 40s, have saved my whole life and lived quite conservatively. My family's future will be totally fine with just the B Plan 9% plus what I do with personal investing. That doesn't mean I want to **** away any version of a defined benefit plan.
I just don't know what I don't know. From flight deck conversations I've had for the last several years, I'm finding there are more out there like me. Adamant anonymous internet opinions screamed at me with catch phrases and memes have zero effect. I seek data that will yield a brilliant hue of green in retirement. That's it.
If you haven’t done so, please go to my site fedexpilotretirement.wordpress.com - when creating a username, use your first four letters of last name and last four numbers of emp id- I can verify your info on our seniority list from that.
First, Cheiron:
- Cheiron is an actuarial firm and would not be part of handling money
- they sell ideas to companies
- their first “hybrid” variable rate plan went into effect in 2012
Plan:
- the catch is benefits CAN go down (variable)
- Greg states model has “no service cap”
—- would have to be negotiated
—- and why couldn’t we get that for current plan?
- he states estimated IRS cap limits (290,000 for 2021, btw)
—- Again, would need negotiated
—- but we don’t want ANY tie because IRS moved limit in 1994 from 230K to 150K (that would suck)
—- that is TONYC point regarding contract CAP (260), is not the IRS CAP
—- again, if 290 is good for modeler and negotiated by union, why can’t we negotiate 290 for contract cap?
- he states “investment managers”
—- most likely remain at FedEx in their pension plan assets
—- all needs negotiated
I have pages of notes about all the videos, I created my own “modeler,” but essentially, you COULD get less benefits.
- PBGC won’t guarantee any “new” plan for 5 years
- modeler uses 1,000 CH though Min BLG is 884
- modeler uses 50/50 S&P 500 & Bonds from 1999 to 2017, but did they put in average earnings from 4.a.2.b? (No)
- did modeler use seat locks for 5 years like some previous seat bids?
Company sheds investment (return) risk and transfers to individual. So BOTH your DC (B plan) AND DB (A plan) are your responsibility. Company pays an amount (negotiated percent) of pensionable earnings (definition negotiated).
Is it too good to be true? Considering most do not understand ALL the idiosyncrasies involved - they just trust the modeler (though we can’t access it anymore). You be the judge, but please perform due diligence and get access to my site. I can only show you the door, you have to walk through!
Cheers