Originally Posted by
Profane Kahuna
United has the choice of cash or qualified retirement plan (tax deferred).
Delta has the choice and they even have a way to avoid taxes with their excess cash over $55k per year if they put it into their “Market Based Cash Balance Plan”.
American hasn’t turned a profit in so long nobody remembers how it works.
So I’m pretty sure it can be done, and the blame for why it isn’t done at SWA does not lie on the IRS boogeyman.
United has an option to contribute their profit sharing cash into their 401k plan via special election. Their Profit Sharing scheme itself is a contractual cash bonus plan. The plan itself is not a qualified retirement plan. Ours is.
Delta has the similar scheme for profit sharing, and again, it's a cash bonus plan. They also get 16% NEC on top of their profit sharing.
Yes, ours can be changed, but it would require switching from a qualified retirement plan to a cash bonus plan. That's a contractual change and would involve the IRS.
SWAPA had a nice presentation about this. I actually wouldn't mind exploring the change.