Originally Posted by
brakechatter
Excellent question. Min balance was expensive up to a point and then dropped off to nothing. It was an idea that provided a bridge of a brand new contractual benefit (MBCBP) with an unheard of increase to the DC, most of which benefit the most junior pilots on the list. Pilots late in their careers generally want to see the pay increases. The gap was bridged through the min balance, which actually applies to every pilot, but those with 5-7+ years would have seen a greater accrual from the increased DC benefit than those with less than that time. That was all pre-covid and where we are today is different. Polling will be different and the demographic have shifted.
Interesting take from today's NN is that not only has vacation value surpassed all passenger carriers -- see the last graphic published by ALPA, but accrual has been accelerated, meaning that junior pilots will get to more vacation faster. While the value has gone up for everyone, junior pilots certainly get more of a benefit in this particular part of the contract. The point: negotiators and the MEC are trying to find a balance for all pilots in negotiations. Demographics are affected differently, some more obviously than others.
The world did not begin the day any single pilot was hired.
Another way to explain this is:
Day one Min Balance in a MBCBP, $300,000
Day two, someone retires with $300,000 having contributed nothing - company pays all
15th of the month, after 401K is full, pilots' excess is routed into the MBCBP
Pilot retires the second year after the contract - they get $300,000 but $290,000 was funded by the company and $10,000 funded by the pilot's excess which is routed into the MBCBP
Pilot retires seven years from now. They get the $300,000 but it has been completely funded by their own excess, and so on, company contributes $0.
Easy to explain with a chart, but basically pilots retiring soonest gain the greatest benefit since they had no time to contribute their excess. In other words, they've been enjoying eating their cake and will get a cake too. Those who retire later get to bake their own cake and take it with them.
I would prefer not to ascribe motives to what the MEC is trying to do here. Obviously, the Min Balance only benefits those soon to retire. Any idea that junior pilots are "selfish" for not wanting to divert half a billion $ or so misses the mark. Any notion that senior pilots are "greedy" for wanting the security of more $ for an uncertain retirement also misses the mark. Assume everyone has unlimited greed. Also assume everyone is the head of a household with a family to support and nobody knows what this industry or the equities market (in whatever you invest in) is going to do.
It is beyond silly that some senior pilots are on here stating they negotiated DC for junior pilots, ha! They negotiated DC because it benefitted all pilots equally and at that time they were mid-seniority and mid-career, when EQUAL across the board seemed like a good idea.
My forecast is that After Thanksgiving when the decision makers are at the table the Negotiators will be given a bag of cash & the problem of how to allocate that cash across pay rates and min balance. They will take that problem to the MEC and get direction. The MEC will demand both. To get a deal done the thing will have to be allocated.
The company has no specific objection to a min balance, in fact, they likely don't care. They'll pull it from pay and let the MEC Reps fight it out.
Pay rates are better for the industry and for future pattern bargaining, JMHO.