Originally Posted by
pinseeker
Notice in the video the forecast compensation limit based on the forecast IRS DC limit. The experts forecast that the limit in 2020 would be $290K when in fact it was $285K. They forecast the limits to increase from there to $295K and then $305K. In actuality, the limit went to $290K in 2021. We don't know what it will increase to in 2022 yet, but history has shown that it is more likely that the limit will be $295K, or stay $290K. It may increase to as high as $300K, but probably won't based on current history. So, the experts have the compensation limits off by $5000 currently and off by as much as $15000 next year. This was their conservative model and they have us being able to earn more than we can. This video was from early 2018, yet they overestimated the 2020 and 2021 earnings limit. So much for being overly conservative with their predictions.
Excellent observation, but ...
They also use very optimistic numbers to predict our annual salary increases, but ...
Regardless of how positive they are with their predictions of pay rates and IRS caps, the most important numbers to look at are the Final Salary and the Retirement Benefit. If the Retirement Benefit does not represent 50% of the active pilot's High Five, the plan does not represent an improvement over our original "A" Plan.
For example, in the above-linked video (around 10:45), a pilot who works from Age 25 to Age 65 should be pulling in $959,358 in annual salary (based on those optimistic predictions, but that's OK), but even after participating in the pancake plan for 40 years, his Retirement Benefit is only $357,959 per year. Now, they brag that that number is a 175% improvement over the current "A" Plan limit of $130,000, but they don't mention that it's only 37% of the active pilot salary!
Just for reference, a wide-body Captain retiring today with 25 years of service and a High-Five equal to 1000 times his current pay rate will receive a retirement benefit of $130,000, which is 38% of that High Five.
Maybe somebody can explain to me how THAT is an improvement.
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