Originally Posted by
Kebert Xela
that makes sense to me to a certain extent. However I think about the back door roth and how (my assumption) a B plan will ‘keep up’ with inflation (cause Wall Street won’t want their money to be worth less) over 30 years versus a stagnate pension with no inherent increase. I’m not part of ALPA so haven’t see that comparison and not trying to argue. But wouldn’t a 30 year career of back door tax free money in retirement from a B plan actually be worth more?
caveats: back door roth is allowed for the next 30.
I do agree the shorter your career the more valuable a pension of any value is over a B plan.
Investing loop holes like the mega back door Roth and back door Roth IRA absolutely increase the value of what your investment grows into. However, neither result in an increased company contribution to your retirement. Which is the discussion topic. The legal max your company can contribute to a tax advantaged B plan retirement is $57k. The ONLY common way to increase your company’s contribution above this is to contractually require them to fund a pension. There are several flavors of pension that they could legally fund. The only two extant examples in our industry are Fred’s FAE based pension that has been effectively capped at $130,000/yr at 25 years for several contracts and Brown’s flat dollar benefit which would pay a few dollars less at 30 years but has grown the last few contracts. ALPA appears to be interested in exploring some other pension varieties since they know that they have effectively maxed out what a B plan can do. Unless ALPA can figure something out, B plan only ALPA pilots will find their company funded retirement benefits steadily shrinking relative to their rising pay rates. In other words, don’t expect the IRS cap on your B plan to rise as rapidly as your hourly compensation.