Originally Posted by
jetlaggy
The FDA is part of the A plan pension and has been since 2006 contract. It is not a separate entity; just a computation to figure out how much you are owed. The increases get negotiated with the new contracts. Increases are currently scheduled thru Jan 2024, when a new contract should be in place.
Ok. This is my fault for not explaining myself clearer and defining my terms all while typing in a hurry.
Let me try better.
UPS has an A-plan and a B-plan.
The A-plan has two parts. Let's call them the Defined Benefit (DB) part and the Fixed Dollar Amount (FDA) part.
The DB part is structured like a traditional pension, like ours, except with different numbers. They get 1% of FAE with a max of 30 years. This is the part they could not improve. UPS refused to budge on this issue due to the exact reasons we were given why we couldn't improve ours: new funding and accounting laws passed make it extremely cost prohibitive to do so (I'm sure the company can afford it, but are unwilling to do so). Even while we look towards the IPA as the paragon of pilot's unions with their cohesiveness, etc., they accepted that fact as true and went "outside the box" to improve their A-plan.
That's what brought on the FDA. It was a vehicle to give UPS pilots a larger A-plan in retirement outside the DC part, which, again, they were unable to get UPS to agree to. The FDA is based on seat position and years of service. As of Jan 2021 the numbers are $4,200 (Capt) and $3,360 (FO) with a max of 30 years TOS. The concern with the FDA is that it does expire with the CBA and will have to be renegotiated each subsequent CBA.
Just for comparison sake, lets take a FedEx and a UPS pilot who got hired at 40 years old and will have 25 years of service at retirement with a FAE of $450,000 as a Captain.
FedEx: $450,000 x 2% x 25 = $260,000 (cap) x 2% x 25 = $130,000/year
UPS (DB): $450,000 x 1% x 25 = $112,500/year
-or-
UPS (FD): $4,200 x 25 = $105,000/year
My preference would, of course, be to improve our DB plan, either by increasing the 2% or increasing/removing the 260 cap. That would be a coup. But, I'm a realist and after having the company not budge on the last few contract, I'm not optimistic that they'll be willing to here. So, if we want an increase in our A-plan, we're (IMO) going to have to look outside the box to better it. With that, I'm willing to listen to proposals. I'm not a "'No' no matter what" voter. I'm a "listen and make a decision" voter. I could see a UPS type arrangement working where we take our A-plan and convert it to variable pension plan, with an FDA of $5,200/year (or greater) provided by the company. That way we have the upside of being able to more than likely improve our DB, with the "floor" of the FDA of $130,000 being guaranteed by the company just like the IPA gets.
Or maybe it'll be something else. But I'm willing to listen.