Originally Posted by
Sluggo_63
I may be understanding how this all works incorrectly, but here goes.
How is UPS getting past the $61,000 limit (2022 numbers)?
I get that a higher B-plan percentage gets more of UPS’s money into the pot rather than your own, but at a certain point you can’t put any more in over the IRS limit.
By my calculations (which may be wrong), for someone maxing out their B-plan, UPS pilots pay about $8,500/year less into it than we do, but at the end of the year both UPS and FedEx pilots have $61,000 in their respective B-plans. Add another $6,500 if they are eligible for catch-up contributions.
Sluggo, FedEx gets nowhere close to putting in the max amount of money allowed by IRS limits. Neither do the other airlines. I am not talking about money that you and I put into the plan, I am strictly talking about company contributions (money). For simplicity sake, let's use the current IRS earnings limit of $305K. Delta puts $48,800 into the B fund. UPS puts $36,600 into the B fund. FedEx puts $27,450 into the B fund. None of those plans reaches the IRS maximum contribution. The rest of that money comes out of our paychecks. When we talk about company provide retirement money, we should only include money that the company is paying, not our money. Even the money from your sick bank with a full disability bank is your money. If you had already reached the IRS maximum, the company gives you a check, it doesn't just go away.
So, the difference in money that UPS (the company) contributes to their pilot's B plan over a 25 year period has a very realistic potential of bridging the gap between their 25 year retirement and ours given the suggested 4% withdrawal from retirement savings. Now could they outlive that difference, sure. But 25 years is a long time after 60/65, so who knows.